Why Retirement Villages Are No Longer Old Age Homes
Historically, retirement villages have garnered quite a prosaic reputation. Consequently, many people tend to not invest in their future as a result. There is always a hope that one can just stay on your current home until you need full time care one day (at the very end of your life).
Sure, one’s retirement is meant to be for travelling, exploring and spending time with loved ones, but more often than not the opportunity to invest wisely, at a retirement village of your choice, is gone. Health has the tendency to change overnight and that’s why it’s so critical to plan ahead and make sure that your future good surroundings, comfortable living and, more importantly, peace of mind are taken care of earlier rather than later.
The “downsizing” term is something we deal with daily – often the perception is small, dark and dingy, but that is why we have applied our innovative learnings in our layouts – to keep the open space and allow for open-plan living and flow. The design function is to have stairless living arrangements with the convenience of healthcare on your doorstep if or when you need it.
Once again, you cannot put a price on either security or healthcare!
Various Retirement options remain available for the prospective buyer/investor.
Through-out the world Retirement Estate “buying” is offered as –
- Full Title
In a full title property, the buyer takes ownership of the land and everything which is built on it. To explain more fully, a freehold or full title property is usually a free-standing house or a cluster home in a development or estate and will have its own erf number, registered at the Deeds Office.
- Sectional Title
“Sectional title on the other hand, describes separate ownership of units or sections within a complex or development. When you buy into a sectional title complex, you purchase a section or sections and an undivided share of the common property. These are collectively known as units.
- “Life Right”
Occupancy right (“Life Right”) is an ownership style suited to retired people, who typically seek a hassle-free lifestyle with secured access to accommodation and certain services like nursing. Because you do not take private ownership of the unit, you are relieved of the burdens of responsibility traditionally associated with property ownership e.g. building maintenance, management of rates and taxes, dealing with Eskom queries etc.
Research reveals that people over the age of 50 are still very active, health-conscious and are looking for a retirement home that will help them maintain their independence. Furthermore, retirees are looking for security, single-level layouts and pet-friendly living arrangements with the added advantage of a clubhouse and onsite Care Centre.
All this adds to the investment attraction. Knowing that all your needs will be taken care of in the comfort of your own, beautifully designed home is the perfectly packaged deal.
“Security not only provides peace of mind for our residents, but more importantly, maintains the capital growth of buying into a gated estate.”(Murray Collins – Owner, Collins Residential)
Safety within the retirement village
The estate’s impeccable security track record is thanks to the professional and dedicated services provided by security partner, Enforce Security, who allow residents to put their safety concerns out of mind.
· 24-hour state-of-the-art security
· Onsite facilities within the estate
· Electrified perimeter fencing
· Strategically placed CCTV surveillance cameras
· Controlled boom gates
· Constant gate monitoring & perimeter patrol
· Guard dogs
Community lifestyle endorses neighbourly values
One of the key motivators for people contemplating a move into a retirement village is the prospect of good security – but this would not materialise unless all residents in the complex were prepared to do their bit.
Our wholesome community lifestyle means that neighbours are easily identified, with a tacit understanding that community members will look out for one another. Further enhancing this hassle-free lifestyle are the services that accompany estate living. All the maintenance of facilities enjoyed by residents – such as the swimming pool – is taken care of by the estate, meaning no concerns with hiring pool services when you’re away. Garden maintenance is also taken care of, thus freeing up residents for other activities. So, when the urge to travel hits, it’s simply a matter of – lock up and go knowing your home and your possessions are secure within your retirement village.
Help is always on hand with 24 hour on-call assistance & security
Security is central to safe and comfortable living in a retirement village. Living in an environment where you know that your neighbours will watch out for you and having dedicated staff available to assist, at all times all day, every day, provides security in the minds of residents and their families. Retirement villages understand that it’s important for residents to feel and be safe and secure in their own homes. And it’s also just as important for their families to have peace of mind that their loved ones are in safe hands.
That’s why most retirement villages provide 24 hour security and emergency response systems in their villages. At the press of a button, help is available 24 hours a day, seven days a week, whenever required.
Residents are instantly connected to a friendly and qualified person who will organise the assistance they need, whether that means calling a family member, friend, neighbour or an emergency response service such as an ambulance or the police.
“It’s like having your own personal alarm system – so residents will have the confidence to enjoy an independent lifestyle, safe in the knowledge that emergency assistance is available at the simple touch of a button.” (Dave Cameron – Retirement Specialist, Collins Residential)
Take the stress out of retirement
There are many elements that can cause stress in your life. One of the biggest contributing causes towards stress is the home environment.
Retirement Estates must be designed to upgrade the mental and physical wellbeing of all our it’s residents.
Tips Before Transitioning to Retirement
Retirement is officially defined as “the act of leaving your job and stopping work, usually because you’re old.” Ouch. With a definition like that, it’s little wonder then that the issue is generally regarded in negative terms. We’ve all heard the stories about the high-powered corporate executive who led a stressful life, retired with the intention of relaxing and taking it easy, only to end up with an ulcer and depression less than six months later!.
“The problem is that some people often misinterpret the concept of retirement or a retirement village. . And, if they get that part wrong, they may fail to plan accordingly or could develop unrealistic expectations.”
Common concerns about the retirement lifestyle include:
· I will no longer have a stable income
· I would have lost my identity or sense of purpose
· It’s going to be boring
· I’m going to be so lonely
Retirement is a lifestyle transition
Retirement is a lifestyle transition that is about change and, as we are all well aware, change is an inevitable and often unpredictable fact of life. But the benefits of retirement mean that you:
Have more choices in your daily living
· Can be free from work stress
· Have more flexible use of your time
· Can finally socialise with family and friends
· Can focus on leisure or passion projects
· Are able to commit to practicing a healthy lifestyle.
Questions to be asked before committing to buy within a Retirement Estate
Retirement can be life re-imagined if planned and managed properly; and in order facilitate a smooth transition into retirement, it’s beneficial to answer the following important questions about you:
· Where do I get fulfillment?
· What are my current activities?
· What gives me a sense of purpose?
It’s likely that your answers may relate to your current lifestyle, which revolves around your job and related responsibilities. This is where you draw your sense of identity and subsequent self-esteem, so suffice to say that a sudden loss of identity could result in stress and anxiety.
A great many pre-retirees look forward to the day that they can engage in their favourite leisure activities, as they should, but forget that there is difference between fulfilling and time-filling activities.
Often, the abrupt transition from being extremely busy or engaging in full-time employment to suddenly being left with a lot of time on your hands, can prove to be disruptive and and a difficult adjustment.
Firstly it’s important to realize that retirement involves planning and preparation.
New roles for the retiree
The Baby Boomer generation is fortunate in that, due to increased longevity and better health care, people are living far more active, social and enriching lives during their retirement years.
Gone are the days of checking into the local nursing home where one’s life revolved around sedentary entertainment, bland food and the occasional visit from the family.
“Retirees now live independent lives and have an array of choices and freedom when it comes to deciding what retirement means to them.”
Retirees can and do reinvent themselves by adopting new roles based on their psychological retirement profile. Some of these new retirement roles include:
The Continuer
Not content with giving up work entirely? Well neither does The Continuer, who modifies their lifestyle so that they can continue working. This can mean cutting back on work hours or level of responsibilities at the office. Some Continuers negotiate working on an ad-hoc or contractual basis with their employers. And with the current digital environment booming, there’s no reason why you can’t work from home.
The Adventurer
The Adventurer is intent on fulfilling something brave and new that will elevate their sense of well being. They may decide to engage in a new business venture that is completely different to their previous line of work or commit to a personal goal like competing in a sporting event like the Comrades Marathon. Retirement no longer means that you’ve been put out to pasture or are beyond your prime. Rather, it’s finally the opportunity you need to put a long-held dream or aspiration into reality.
The Searcher
The Searcher is someone who is set on personal development through introspection. They could take a number of self-help classes or enrichment programmes like cooking or meditation, or make a personal pilgrimage overseas to a country of interest. They may even go back to school and earn that PhD.
The Easy glider
The Easy Glider is all set for the go-with-the-flow lifestyle. That is – they’re set to tackle things as they come: one day at a time. This could mean chilling-out at the beach or on the golf course and keeping responsibilities to a minimum. The Easy Gliders are often greater socialisers, so can focus on entertaining and catching-up with friends. Book clubs, bird watching, and other forums where they can find easy-going stimulation, are perfect outlets for them.
The Involved Spectator
The Involved Spectator likes to keep busy. They often use their wealth of skills, knowledge and expertise to help and assist others without the expectation of receiving anything in return. This can mean teaching others their skill-set or volunteering their time with charities, organisations or associations.
Your psychological profile
Which retiree role suits you? Are you a clear-cut member of a particular pillar or are you a combination of two or three? Once you have a clear vision of what it is you want to achieve during your retirement, you can go about putting a plan into action. The five P’s can help your transition into the retirement lifestyle.
The five P’s for retirement success
· Purpose
Make sure that you have a fulfilling sense of purpose planned. This will aid in your personal development and give you a sense of identity. Ensure that your intentions are realistic and achievable. Commit to specific goals and deadlines as this will provide you with both direction and motivation.
· Place
Decide where you should retire based on your specific needs. Do you need the area to be cost-effective, close to medical facilities or to your family? Location is key so do your homework and be certain that your retirement home can fulfill all your requirements. Estate living has become a great way to facilitate the modern retirement lifestyle due to the fact that it’s safe and secure and offers the retiree plenty of amenities.
· People
Retirement is about nurturing relationships with those we love. Take the time to connect and socialise with your partner, family, friends, neighbours or colleagues. Don’t isolate yourself as this could lead to a reclusive lifestyle, which is how a person can become bored or depressed.
· Physical
It’s important to take care of one’s physical health during retirement. Make sure that you get plenty of exercise, follow a nutritious diet and make responsible lifestyle choices (like no smoking) that will see you keeping active and healthy.
· Prosperity
Finance is an integral part of retirement, so plan ahead by consulting with a financial advisor regarding your retirement portfolio. In this way you can reap the benefits later in life.
Further broader explanation about “LIFE RIGHT” RETIREMENT UNITS
What exactly are ‘life rights’? Get the facts
30 Mar 2017
Those contemplating moving to an attractive retirement village are well advised to review the different purchasing options other than sectional title that can offer concrete lifestyle advantages and safeguards to the retiree.
“The life rights proposition is a well-established concept, contained in the Housing Development Schemes for Retired Persons Act No 65 of 1988 (HRP Act), which provides safeguards for both the purchaser and the developer," says Power.
”This is according to Power Developments marketing Director, Gary Power, who says that an option gaining traction is ‘Life Rights’ schemes.
“An example of this kind of scheme is the one in place at Featherwood Retirement Village in Pretoria East, a joint development backed by the Old Mutual Retirement Accommodation Fund, Power Developments, and Retire 24, specialists in retirement developments,” says Power.
“The life rights proposition is a well-established concept, contained in the Housing Development Schemes for Retired Persons Act No 65 of 1988 (HRP Act), which provides safeguards for both the purchaser and the developer.”
However, Power says the concept of life rights is not particularly well understood where, on the face of it, the purchaser provides an interest-free loan to the developer in return for the right to occupation of the housing unit for the rest of their and their spouse’s life.
“But that’s just part of the scheme. Life Rights is a widely-practised and requested retirement model worldwide. The USA is the world market leader for retirement villages, and the most common type of sale is here based on the ‘Life Plan’ model, the same as the South African Life Rights system,” says Power.
“In Australia and New Zealand the most widely-accepted model is the ‘License to Occupy’ (life right) scheme, where 80% of residents in a retirement village have a Licence to Occupy agreement.”
Power says the UK is facing a shift towards private retirement villages where developers generally use the ‘Life Time Lease’ model, while in Europe, the ‘Apartments for Life’ ('lewensloopbestendige' units), sold on a life rights basis are increasingly popular.
“While a monthly levy is involved, in terms of the Act the developer must provide a draft levy budget for the first three years of occupation, so there are no hidden costs of which the purchaser is unaware. Insurance, interior and exterior building maintenance and general village upkeep are covered by the monthly levy,” says Power.
“Life rights is hence a widely-practised and well-recognised retirement scheme worldwide,” says Power.
He says depending on the structure of the contract, there may be a substantial price advantage under a life rights contract of the ‘purchase price’ between sectional title and life rights.
“There are also important financial and logistical advantages to consider with the life rights proposition. Special protection measures in the HRP Act were drafted with life rights in mind and how life right amounts to a statutory real right that is comparable to ownership,” says Power.
“The developer and purchaser conclude an agreement in terms of which the developer makes the housing unit available to the retired person to use, occupy and enjoy for the duration of his life or until the he elects to sell and move on. The retired person also becomes entitled to use the communal facilities in the scheme.”
As consideration for the right of occupation, Power says the retired person makes an interest-free loan to the developer, this being the ‘purchase price’ for the life right. When the life right terminates, a typical agreement makes provision for a refund of the original interest-free loan upon the ‘resale’ of the unit to the next investor.
Power says the advantage to the developer in selling life rights is that it retains the underlying capital asset, while the benefit to the purchaser is that there are no transfer fees or VAT involved, unlike freehold or sectional title, share block schemes, making the initial purchase more affordable.
“While a similar monthly levy is involved, in terms of the Act the developer must provide a draft levy budget for the first three years of occupation, so there are no hidden costs of which the purchaser is unaware. Insurance, interior and exterior building maintenance and general village upkeep are covered by the monthly levy,” says Power.
Gavin Wolmarans, Fund Manager of the Old Mutual Retirement Accommodation Fund (OMRAF) within Old Mutual Alternative Investments (OMAI), the largest private alternative investment manager in Africa, says perhaps the most important advantage of a life rights scheme is the administration and management of the retirement village.
“Our experience indicates that individuals are retiring older than expected, and are more demanding in the lifestyle benefits, assistance and care services they require,” says Wolmerans.
In addition, he says purchasers have an appetite for performing and stable villages which have been set up with the appropriate long-term retirement accommodation management structures.”
“The life right model offers purchasers peace of mind in the knowledge that the developer is there for the long haul providing the skills and expertise required to effectively run and maintain all aspects of the retirement village,” says Wolmerans.
“This is a major benefit to both us as investors and to the residents as the professional management and upkeep of the village has been seen to enhance the village ‘brand’ and marketability - not least their reputation and profitability - so as to present an attractive proposition to future buyers when a unit becomes available.”
When it comes to any potential disadvantages from life rights schemes, Power says some might argue that the purchaser may forfeit the capital appreciation which he/she would generally enjoy in the case of freehold title schemes.
“But this is offset by the lack of transfer fees, VAT payments and the potential of Capital Gains Tax when a unit is sold on,” says Power.
“There are different life rights models available that share a portion of the profit/appreciation with the life right holder. In all other aspects the costs are similar, but the big advantage is that the developer is ever present to maintain the promised lifestyle.”
Thanks to
- Mount Edgecombe Retirement Village for some info used
- Article by Gary Power from Power Developments
Available developments –
1) FEATHERWOOD RETIREMENT ESTATE
§ Life Right
§ Sectional Title
2) THE RETREAT RETIREMENT ESTATE
§ Sectional Title
? Single Level Simplexes
§ 2/3bed units
§ Phase 7 available around 2020/2021
? Apartments
§ 1/2bed units
§ Only 24 units available
§ Occupation mid-2020
