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You’re deep into the empty nest syndrome, with two, three or maybe even four empty bedrooms in your big house, and you want to move somewhere smaller, more manageable.
A retirement estate is the obvious choice, but there are so many options. If you decide to buy into an estate, you need to decide between life rights and sectional title. But is buying the best option, anyway?
Whether you buy a life right or sectional title, buying a retirement unit has – much like buying a home – the advantage of security of tenure. You know you have a place to live for the rest of your life. And you will have access to all the facilities you may need if your health and mobility deteriorate as you age.
One of the disadvantages of buying a retirement unit is that – especially if you have bought a life right – you are pretty much committed to staying in the same place. You can buy out of a life right after a few years, but it might not be the best financial decision, as you do not profit from the capital gains. If you’ve bought in a sectional title scheme, you could profit from the capital growth, if the scheme is managed well and levies are paid by all members.
SO WHAT ARE THE OPTIONS?
Many people buy units in retirement estates as investments at as young an age as 30, so they are up for rental for a good couple of decades before the owners may decide to move in – if ever. Some savvy youngsters even buy one or two investment units in a retirement estate, and then – rather than purchasing a home – rent where it suits them. What this means is that there is a huge pool of rental properties available in a range of retirement estates.
There are also retirement estates, or retirement complexes, that are designed purely for rental. Take, for example, Riverside Retirement Village in Hout Bay.
With 14 five-star luxury hotel-style suites, Riverside offers full-board starting at R25,000 per month for a single and R29,000 for a double room. Now, if you have a fully paid-for family home in a nice leafy suburb, you could probably rent it out for that – or more. That way you can keep the family home, perhaps for one of your children to move into later. And, even if they don’t, you will benefit from the increased value of the property.
FREEDOM TO MOVE
The huge advantage of this option is the flexibility. Hmmm – summer in Cape Town, autumn on the Garden Route somewhere, and winter on the KZN North Coast. Or do the swallow thing – summer in Cape Town, and summer again in Europe or the USA.
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Renting rather than buying a retirement unit is another option if, for example, you have sold up your family home, but prefer to invest offshore. That way, you can stay here as long as you like, benefit from the exchange rate, and join your family should they relocate overseas or semigrate to another part of the country.
