Buying a retirement unit

Most of us fail to properly plan for our retirements. Then one day, we realize that our currents homes are no longer suitable and then start looking in a panicked state for something suitable to buy. Start planning today and hopefully this article may assist you with your decisions.

There are two types of retirement ownership.

Usually the cheaper option if to purchase the “life right” in a unit. This is not ownership and the right to occupy lapses on the death of the purchaser. This option merely enables a person to occupy a property during his/her lifetime and cannot be bequeathed to heirs.

The second type is traditional property ownership (either sectional- or full title). Obviously these units are more expensive, but are much more sought-after. Ownership does not lapse on the death of the owner and have in the recent past proofed to be excellent investment opportunities.

Issues to consider when choosing a a retirement unit:

• Will you be able to raise a loan?

Generally speaking, once you reach sixty years of age, it becomes more difficult to raise a bank loan and if a loan is granted, the repayment term is usually significantly reduced to 10 years or less. Cash therefore is king and saving well in advance is advisable.

• Position Position Position

As with any other property, position is of tantamount importance. Is the property easily accessible, is it close to hospitals, shopping centres etc

• Amenities such a frail care unit, sport facilities

The more useful and senior-friendly facilities a retirement complex has, the more demand is created for it which increases price.

• Financial well-being of the body corporate

As for certified copies of the latest financial statements and if necessary, let an accountant have a look at them.  A well-managed complex will have sound financial statements.

• Running costs

Determine what the monthly levy is and how often and with what percentage it is increased. Also find out what the municipal rates are and what the average consumption charges are.

• Security

Some retirement complexes are simply safer than others. Do your homework and buy in a safe environment.