Are you ready to start downsizing and live your best life?
If you’re over 50, an empty nester who is free of family financial commitments, and looking for fewer home and garden maintenance obligations, you’ve no doubt started looking at options and retirement villages have popped up on your radar.
But how do you choose a retirement village that ticks all the boxes?
And is a retirement village even the right choice for you? And if not, what are the alternatives?
In this article, we examine the factors to take into consideration before you decide where to start the next phase of your life.
4 Questions to Ask When Choosing a Retirement Village?
Does the idea of a retirement village conjure up images of a dull, boring, and staid community of people at the end of their lives, instead of the beginning of an exciting new adventure?
You’re not alone. Your new home should give you the opportunity to do more of what you want to do. That might be the peace of mind to safely lock-up-and-leave to go travelling, spending more time on favourite sports and hobbies, or simply relaxing and socialising with old friends and new.
It should also make financial sense too – and that’s where things get a little complicated.
1. What Contract Type Suits You?
Unlike purchasing a house, retirement village contracts are quite different and can be quite complex.
We recommend that you seek professional financial and legal advice to help you understand all the implications before signing.
Let’s take a look at some of the contract types you might encounter.
Strata Title
A strata retirement village is where residents own a strata title in their unit or apartment and a share in the common property of the village. Residents typically pay a range of fees to cover the costs of running the village, including building insurance, maintenance and repairs, gardening, and other services. The fees can vary depending on the size and type of the unit or apartment, and the facilities and services provided.
Loan License
A loan license retirement village is one in which residents enter into a loan agreement with the village operator to purchase a right to occupy a unit or apartment within the village.
Residents may also be subject to a range of fees and charges, including entry fees, ongoing fees, and exit fees, which can vary depending on the village and the specific loan agreement.
Learn more about retirement village costs here.
Land Lease
Land lease communities (LLCs) are residential communities where residents own their home but lease the land on which their home sits. This style of over-50s living is becoming increasingly popular with Australians looking for alternatives to retirement villages. There are only two contracts, one for the purchase of the home and the second for the site rental.
2. Can You Afford Entry and Exit Fees?
It might come as a shock to discover the number and nature of fees that become part and parcel of retirement village living.
Let’s take a quick look:
- Entry fees: You’ll be paying anything between several hundred thousand dollars up to over a million dollars just to move in. And if you’ve signed a loan and licence agreement, you don’t actually own your own home – just the right to occupy.
- Exit fees and deferred management fees: These are charged by the retirement village operator when you decide to sell. This can be up to 35 percent of the sale price.
- Capital gains fees: You may also be obliged to share anywhere between 37.5 to 50 percent of the capital gains with the resort operator.
- Maintenance fees: Retirement villages charge on average between $600 and $700 per month to operate and maintain the resorts.
- Refurbishment fees: Again, depending on the operator, you may be obliged to refurbish your unit before it can go on the market.
Learn more about deferred management fees and exit fees in retirement villages here.
3. What Kind of Lifestyle Do You Want to Lead?
Retirement from work doesn’t mean retiring from life. Far from it! Your retirement living options should really reflect the lifestyle you want to live. And it’s important to understand how retirement villages work vs. what kind of lifestyle you envision for yourself.
It should open the doors to new possibilities rather than leaving you feel hemmed in with pet guidelines and restrictions, feeling like you can’t enjoy spending a few days with the grandchildren or hosting family gatherings.
What about travel? Is the retirement option you’re considering give you the opportunity to store your caravan or motorhome safely. What about gated security and homes with individual alarms to give you peace of mind when taking longer travel adventures?
Still, there’s no place like home. So, does the place you’re considering look like a high-end holiday resort with well-maintained facilities?
Retirement villages and lifestyle resorts should have well-equipped gyms, heated pools, sporting facilities such as tennis and pickleball courts, bowling greens as well as a golf simulator. A club room with pool and table tennis should be standard as well as ten-pin bowling lanes, a luxury cinema along with a bar, café facilities and a grand ballroom.
There should also be spaces for you to indulge your creativity with art studios and well-equipped workshops and plenty of opportunities to make new friends with like-minded people.
Learn different ideas to spend time with grandkids here.
What About Location?
Rightsizing to a new home is more than just a place to live. It means moving away from familiar neighbourhoods and communities. That means location and lifestyle should be major considerations in your decision.
Being Close to Family and Friends
There are fewer things more important than keeping great connections through activities with family and friends so look for a retirement location that puts you close to great transport links to make those family visits easier.
Make a Sea Change
If you’re yearning to feel the sand between your toes close to home, then a sea change may be one that is right for you. Ideally the best location puts you only a short distance away from the shore but also has local shops and services close at hand.
Country Life
The relaxed rural vibe that brings you close to nature is the main reason why people want to make an escape to the country. Just as important is being part of a community where you can get to know the townsfolk and feel like a local.
Learn more about what a Tree Change is here.
4. Is a Retirement Village Right for You?
The good news is that there is an alternative to retirement villages with all their fees, charges and restrictions.
Land lease community lifestyle resorts are increasing in popularity – especially for active over-50s who prefer transparent, easy to understand contracts, holiday resort-style facilities as well as modern homes with luxury inclusions. We like to call it “rightsizing”.
Unlike retirement villages, land lease communities (LLC) don’t charge entry, exit or deferred management fees. There are no capital gains charges or refurbishment fees to pay either.
Under this model, you own the home and lease the land it is on. This comes with advantages including:
- No stamp duty to pay on the purchase of the home because you are renting the land.
- Eligible Australian Pension and Department of Veterans’ Affairs card holders receive rental assistance that further reduces the site rental fee making LLCs even more affordable.
Land lease communities like GemLife also offer outstanding resort facilities as well as rightsized homes that are designed and built to be inexpensive to run. In fact, GemLife homes are connected to an industry-leading Virtual Power Plant program that greatly reduces power bills. In fact, some homeowners report zero-dollar bills.
Learn more about retirement villages vs. lifestyle villages here.
Explore the GemLife Difference
Choosing the right retirement community for you requires planning, and committed research to ensure your next move is the right one. We recommend that you keep an open mind and look at all the retirement community options before you decide.
At GemLife, we listen to our residents and ensure our retirement living option ticks all the boxes – financial, location, lifestyle, and resort quality.
See the difference for yourself and check out the many locations GemLife has around Australia.
We welcome you to check out the many resort locations GemLife has around Australia and see the difference for yourself.
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