When you start looking for a retirement property, the road ahead can seem challenging. You’re choosing a home that meets not only your present needs but also your future needs - which may become more complex as you age. Retirement properties come in various types and sizes, each with its own unique list of pros and cons. The CSi Property Group has simplified the process of choosing your retirement home by creating this comprehensive guide to every aspect of your decision.
Life rights VS full ownership
The difference between life rights and full ownership boils down to two elements: what you legally own and what happens when you pass away or choose to leave.
When you buy life rights, you buy the right to live in a specific unit for the rest of your life, but you do not own the property. You have a contractual right of occupation, but no title deed is registered in your name. When you leave or pass away, the unit returns to the retirement village operator, and your estate is likely to receive a refund of the original purchase price minus deductions.
Life rights can be ideal for you if estate planning simplicity is important to you, if you are not concerned with capital growth, or if you have limited funds available to secure your retirement home. This type of property acquisition comes with lower upfront costs than outright ownership, but you will still need to pay monthly levies.
When you buy a sectional title retirement home, you own the unit outright. This adds a real, transferable asset to your estate, and after your passing, the unit may be sold by your estate, and your beneficiaries will gain from the capital appreciation. The challenge in buying your retirement home outright could potentially lie in a higher upfront purchase price.
Renting or buying: which is better?
Should you buy your retirement home or should you rent it? There are pros and cons to both options and there’s no one-size-fits-all correct answer.
Buying your home makes your future expenses more predictable, because you won’t be subject to sudden rent hikes in the future. Owning your home also means that it will become part of the legacy left to your beneficiaries after your passing. The flip side of the coin is that buying property requires a significant upfront investment.
The advantages of renting a retirement home include flexibility, which can be important if you’re not 100% sure where you want your long-term retirement home to be. Renting gives you the opportunity to experience life in a particular retirement village and decide whether or not it meets your needs. The downsides of renting can include rent escalations that outpace inflation and the fact that rental payments do not build equity. Being a tenant also means that you may have to move again at a later stage if your lease is not renewed.
Factors to be mindful of when choosing a retirement home
There are plenty of great retirement villages to choose from in Gauteng, and here are six of the top factors that you should bear in mind when choosing which one to make your home.
- Think about your hobbies and interests and whether you’ll be able to pursue them from your new home. If you enjoy fishing, for example, look for a retirement village with on-site dams.
- How close will you be to your family, church and other social activities that mean a lot to you? A retirement village in Pretoria may not be ideal for you if your loved ones live on the East Rand.
- Will you be close to shopping centres, restaurants, hospitals and other amenities that you regularly make use of?
- Safety is a top priority. Look for a retirement village with controlled vehicle and pedestrian access as well as CCTV and 24/7 patrols.
- Think about your future health needs. Does the retirement village you’re considering making your home offer frail care and assisted living?
- Last but not least, if you have pets, does the retirement village you’re interested in allow them to come with you?
If you’re looking for a retirement home in any corner of Gauteng, get in touch with the CSi Property Group. Our property practitioners have years of experience in helping people find the ideal home to enjoy their golden years in.
