This is the downsizing lifestyle!
When you think of retirement and lifestyle villages, do you think of fun social events in hotel-like surrounds – maybe with a light gym session followed by a drink beside the pool – backed up by CCTV security and 24/7 access to medical assistance?
Well you should, because that’s the modern face of retirement in Australia these days. And it’s pretty lush!
More and more over-55s are choosing retirement villages, and it’s super easy to see why. In addition to the fantastic modern facilities and the many opportunities to socialise with people of a similar age, it also means taking a heap of the stress out of maintaining a larger family home. As a downsizing option, it has lots to recommend it.
But should you rent or buy your way into this new village lifestyle?
Depending where you’re looking to live, you’ll no doubt notice that different villages are run in different ways. If you’ve got your heart set on a specific village, you might not have a choice: not every retirement village offers renting as an option.
If you’re downsizing, though, you might have a little bit of extra cash to play with after you’ve sold the bigger place. And for value for money, a retirement village turns out to be a great place to splash that cash. As you’re about to see, owning a unit in a retirement village isn’t exactly like owning a house, so you might be surprised just what you can get for your money.
Different ways to ‘buy’
There are two main ways to buy into a retirement village. First let’s look at leasehold estates or long term leases. As it sounds, you lay down a big chunk of change in return for an extended fixed term lease (e.g. 50 years or more). Usually, you’ll then have a monthly maintenance fee as well, to keep the grounds looking good and the pool nice and clean.
Also common is strata title, which is basically the same as it is with a block of units outside a village. You know the drill: you buy the property and become a member of the owners’ corporation. The only difference is that you first need to be approved by the owner of the village, so dress up and act nice.
There are other ways to buy in too, which are less common and more complicated. Company titles and unit trusts means you’re not buying an apartment, but rather shares in the company (or a unit in a trust) that owns the village. Down the track when you sell, you’re selling shares, not property. Might be a good time to talk to a financial adviser if you’re considering these sorts of investment-style deals.
So is renting an option?
Yeah, nah. Sort of.
Licences to occupy and periodic tenancies are basically open-ended leases. Retirement villages offering these types of rental deals are usually run by religious or community groups, or local councils, although some private sector development is happening too. Typically, you won’t find the same level of facilities as you’ll get if you buy.
Like rentals anywhere, there are usually restrictions on what you can do to the property and garden, and you might need to pay a bond up-front that you get back later if there’s no damage done. Want to keep hosting wild parties? Need to remove a wall to fit in your André Rieu DVD collection? Then renting mightn’t be for you.
So if retirement village life is your downsize option of choice, your best bet – if the piggy bank allows – is to buy in, relax, and lap up the good life.