Prime Real Estate
Today, several new options are available to suit almost any lifestyle and budget. The only difficulty is choosing the right option for you.
Mature lifestyle preferences
Though they go by various names there are really three broad options to choose from: Multigenerational lifestyle estates where anyone can live and where opt-in care or facilities are available; retirement estates or villages limited to residents of a certain age; and retirement homes where the focus is on providing care for those who are either semi-independent or completely dependent. Each has its pros and cons, and your choice is entirely dependent on your needs.
The biggest differences are in the level of healthcare and the design of the buildings. Retirement homes focus on assisted living and healthcare, retirement estates offer healthcare to all residents as needed, while multigenerational estates have opt-in care. Retirement villages are often less costly than assisted care in other settings, says Bruwer de Jager, national sales manager at Devmark Property Group.
At a minimum, people should ensure that their choice includes at least primary healthcare and emergency health alerts and services, says Miguel Rodrigues, director at Rabie Property Group. “Even if the development does not have its own frail care facility, you must be able to have optional home care should you need it.”
Design will also differ between the three options. “Lifestyle estates usually have larger units, often double-storey unit designs, while retirement villages have smaller units and are mostly limited to single storeys,” explains De Jager.
Lastly, of course, both retirement estates and homes are limited to certain age groups, while a multigenerational lifestyle estate or a retirement estate within another development offers the opportunity to remain part of a larger community of differing ages and lifestyles, adds Rodrigues.
There are, however, several differences that depend on the development rather than the age group it’s aimed at. Hayden Giger, head of growth at FNB Private Bank Lending, says when making your choice you should consider:
Your dependants: Certain retirement options will not allow dependants younger than a certain age.
Your pets: Certain estates don’t allow pets.
Your hobbies: Does the development offer recreational activities, sports, or transport to such facilities?
The management: Is there good security? Are there strict rules residents must follow, and recourse for noisy neighbours, for example?
The setting: Do you prefer an urban, suburban or rural lifestyle? And how far is the development from medical facilities, shopping complexes, and more?
Sound financial choices
Housing costs will be part of your budget, whether you rent or own, says Wikus Lategan, CEO of property developers Calgro M3. The decision to buy or rent will depend on your age, lifestyle, budget and requirements. “Though homes can be valuable assets to own and offer perks like stability, tax benefits and equity, they can be costly. Fluctuations in market value, unexpected maintenance expenses, and insurance deductibles can all increase ownership costs.”
There are several pros and cons to consider when making your decision.
Renting: Renting provides more flexibility and liquidity, and you’ll spend less money and time on maintenance – leaving you more money to enjoy life, says Lategan. The cost of holding the property (levies, taxes and maintenance of the superstructure) remains the responsibility of the property owner. Giger says you should keep in mind, however, that renting could become very expensive over a longer period as the landlord increases the rent amount year on year.
Full title ownership: Giger says full title ownership offers perks such as more privacy and leeway to remodel (within estate limits). “But consider that you will also be responsible for maintenance, insurance, capital growth on investment, tax, and other costs.” Buying property later in life will mean that the property will form part of the estate and will be inherited by beneficiaries, adds Mmule Lebeloane, a director at Projectprop (developers of Leloko Eco Estate near Hartbeespoort). As such, says De Jager, buying a unit at age 50 makes much more sense than buying a unit at age 80. “If you invest in a stable property market with good capital appreciation, it can also produce good rental yield for investors.”
Sectional title ownership: With a sectional title, the management, maintenance and insurance of the property is managed by the body corporate, says Giger, and you should have capital growth on your investment to boot. But sectional title units have limitations, cautions Lebeloane. “What you buy is what you will live in — you won’t be able to make major structural changes. These units are usually attached or semi-attached, so you’ll likely be aware of neighbours’ movements and sounds. This type of living requires neighbourly patience and tolerance, but also gives a sense of community since residents are likely to see each other often.”
Life rights: Despite reference to the buying and selling of a unit, there is no purchase of real estate here. Rather, you would purchase the right to live in a unit while the developer retains ownership. The purchase price will be a pre-determined amount, which is often viewed as a lifetime of rental paid in advance. The unit won’t form part of a deceased estate — it will be sold, and your heirs may only receive a percentage of the purchase price, the remainder of which is placed in a stabilisation fund, explains Lategan. As such, it’s not an investment vehicle, but it does offer some perks, says Rodrigues. “You will be protected by the Housing Development Scheme for Retired Persons Act. This means that you are assured of a home for the rest of your life, which is not the case when renting. Your levies will also be kept stable with no special levies, which allows you to plan more accurately.”
Making your choice
Research is key when making your decision, says De Jager. “Firstly, location is incredibly important. Whether you choose an urban or rural setting, identify safe areas within established, stable markets and where municipalities are in good shape. And when you’ve decided on an estate or village, make sure the developer is registered under the Retired Persons Act 65 of 1988, which protects you as a client from any capital risk during the development period — essentially preventing the developer from running away with your money.”
Now, set a realistic financial budget and consult a financial adviser if necessary, says Lategan. Know exactly what you can afford — now and in the future — before you even start looking at properties. To fine-tune your decision, make a list of your physical, medical and emotional needs and look for options that meet those needs. Schedule a tour and see if it speaks to you and your needs.
Of course, finding the absolute perfect place at the perfect price is like finding a needle in a haystack, so it could be a good idea to split your list of needs into three, says Lebeloane: features you absolutely cannot do without, features that would be nice to have, and features you don’t need.
Lastly, urges Lategan, read the housing contract very carefully and review it with a lawyer if you’re unsure of anything. It’s a big decision, but do it right, and you could spend your retirement years living the lifestyle you’ve always wanted.