Thinking about moving into a retirement village?
Living in a retirement village can be a†fantastic†experience - great company, security and support, and homes that are designed for easy living and low maintenance.
Unfortunately, buying your retirement home in Australia can be a confusing business due to the sheer variety and complexity of the different purchase arrangements Ė Freehold, Lease/Loan, Deferred Management Fees, Entry Fees, Exit Fees, Village Fees, share of capital gains.
There are also many traps and hidden fees for the unwary and uninformed buyer!
Making a bad decision on your retirement home purchase can have a significantly adverse effect on your savings if you find you have to move out of the community you are living in.†As a retiree, you need to make you nest egg last as long as possible to fund your living needs into the future. You may also want to leave something for your family.
Why move into a retirement village?
People contemplate moving into a retirement home for a variety of reasons. This may include downsizing the family home to free-up cash or simply the company of like-minded people... or perhaps there are more important and enjoyable things to do with your time than maintaining a large house and garden?
When contemplating your purchase of a retirement home, you might be surprised at the complexities you face in deciding which option best suits your particular needs. Not only do you have consider where you want to live, but also what style of house or apartment is most appropriate to your lifestyle.
As daunting as these decisions can be, it is usually the easy part!
The financial and contractual arrangements for purchasing your retirement home can be complex and confusing. From simple freehold property title through to sophisticated Deferred Fee schemes and everything in between, it can be hard to understand and almost impossible to compare "apples with apples".
These are just some of the challenges potential buyers need to understand, not to mention the physical and cost considerations of having to travel extensively to inspect all of the options available.
Many of these issues you simply will not think of at the time and keen sales representatives are naturally going to emphasise the positives of their particular establishments, often skimming over important issues such as Body Corporate Fees and exit costs, which in the long term can cost you many thousands of dollars.