Celebrities Turn Real Estate Tycoons

From left, Park Chan-ho, Ko So-young and Ryu Si-won

Many celebrities and sports stars are turning a profit with their investment in real estate. One of them is Moon Hee-jun, of the now-disbanded boy band H.O.T., who has revealed that one house he bought for W120 million is now worth W1 billion (US$1=W1,129). Moon owns several properties.

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◆ Real Estate Tycoons

Pitcher Park Chan-ho, who recently joined the Orix Buffaloes in Osaka, Japan, is one of the most successful celebrity real estate investors. He built the Park's Sports Group Building in Sinsa-dong, southern Seoul in 2005, a 13-story structure with four basement levels worth around W20 billion. The price has doubled over five years.

A seven-story building built by Actor Ryu Si-won in Daechi-dong has grown in value to W10 billion. Actress Ko So-young built a five-story building in Cheongdam-dong in 2007 which is now appraised at around W11.6 billion. And slugger Lee Seung-yop owns a building in Seongsu-dong worth W30 billion.

◆ Reliable Assets and Tax Benefits

Ko Jun-seok of Shinhan Bank says investing in real estate is one of the most reliable ways to keep windfall profits. "Owning several homes means you have to pay a lot of tax, but you don't have to pay as much on a commercial building", says property developer Park Won-gab.

Financial security is another main reason. Park Sang-eon of U&R Consulting Group says property is not subject to fluctuation like stocks and shares. Another advantage is that investors can keep a low profile. "Stock investments must be declared publicly, but real estate ownership can be kept confidential", said Ko of Shinhan Bank.

◆ Looking Out for Opportunities

The rules of thumb are to make use of court auctions and to invest in properties downtown. Basketball player Seo Jang-hoon and TV personality No Hong-chul both made profits from repossessed properties. Seo acquired a seven-story building in Yangjae-dong at 2.8 billion in 2000, and has made profits of over W10 billion. No purchased an 160 sq.m apartment in Apgujeong-dong at W2.2 billion, 20 percent below market price.

But footballer Park Ji-sung and figure skating queen Kim Yu-na were not so lucky in their investments. Their respective investment in a building in Yongin, Gyeonggi Province and Songdo, Incheon did not bring major profits. "Those two places are emerging business areas that have yet to be fully developed", says Seon Jong-pil of consulting company Sangga News Radar.