Research Your Chosen Retirement Village
Research your chosen Retirement Village well as with buying any home you should make sure it really suits you because entry and exit costs can be expensive.
Retirement Villages, Lifestyle Homes, Over 55s whatever the current label is, these are homes that are owner-occupied (you can’t rent it out) and usually everyone in the Village is over 55.
Once upon a time these Villages were all single-level and spread out across a series of ‘roads and laneways’. Nowadays, Villages are vertical as well.
Staying in your neighbourhood or moving closer to the City to get the best of the sport and arts without the travel or parking. Vertical doesn’t mean that you skip out on facilities or the size of home.
I was fascinated to read about The Grace on Albert Rd in South Melbourne. Their tag line of “where luxury, lifestyle, and location meet”
https://www.thegracealbertparklake.com.au/
RETIREMENT VILLAGES ACT
Research your chosen retirement village including understanding or at least knowing about any relevant laws. There is special legislation in place for Retirement Living – aptly known as Retirement Villages Act. There are numerous noticeable differences than the Sale of Land Act which determines legislation for the sale and subdivision of land that you were probably more accustomed to when you sold or bought your last home in Victoria.
Each year there are a whole heap of Open Days where you can go and check out different villages, meet some residents and feel the vibe. I would highly recommend meeting the Village manager, getting a copy of the previous AGM minutes and having a good open talk with residents.
Research further than the glossy brochures and sales speels. Are they leasehold or Strata? Do they have a fund that will allow for maintenance or capital improvements? If something does go wrong, think flooding etc, then who pays for repairs and what happens to you during those repairs. Similar to buying in an apartment complex, find out what you can before you commit.
ASK THE RIGHT PEOPLE FOR HELP
There are a number of people and organisations who can assist you when you research your chosen retirement village.
Consumer Affairs Victoria covers important information about buying in a Retirement Village. Do your research. Ask questions. Villages are far more transparent these days.
Vitally important is getting the right advice from a specialist solicitor to review the Contracts and Management Agreement. Many solicitors cover a broad range of matters, some have large teams that specialise in various legal aspects. It’s like a one-stop shop for Wills and Estates, Conveyancing, Family Law and Retirement Villages.
High on my recommendation list of advisors is to consult with your financial planner and accountant. Wherever you go there will be annual or quarterly costs and you need to be sure you can afford them for your length of tenure. Usually, there is no mortgage applicable on your purchase and if you have a reverse mortgage on your home or other debts these will all need to be taken into account. It can be financially crippling if you need to leave the Village earlier than anticipated because of a bad investment decision and you can no longer afford to stay.
I speak with experience with this exact situation in both a retirement village and a residential home, the home didn’t have to take into account the deferred management fee that needed to be paid on exit however it did leave the owners having to move to a lesser home which also incurred stamp duty.
When you speak with your financial planner, ask about stamp duty on your new home as there are options for reduced amounts if this is your last home and other concessions. If a deposit is payable on your next home also ask whether you can have access to part of your superannuation.
It’s all about research and having the right people on your side. It’s far better to have done the work, completing your research on your chosen retirement village or next home before you commit irrevocably.
