Apart from the investment risk, resale conditions,
and the different levies,
the following factors should also play a part in your
final decision when choosing a retirement village
When you consider buying into a retirement village, certain factors should be thoroughly analysed during your research to assist in making the best possible decision to the benefit of you and your pocket. Apart from the investment risk, resale conditions, and the different levies, the following factors should also play a part in your final decision.
The management of a retirement village can often make or break a pleasant life at the retirement village of your choice. Find out how management is appointed, what experience members of the management team have, who answers to whom, how much say will you have as a resident, and how often meetings are held with the residents. Finding out the exact responsibilities of management, such as the maintenance of the communal buildings, electricity, the plumbing of the units, the exteriors and interiors of the units, the gardens, security, and the insurance of the buildings are all necessary during your fact-finding mission.
Once you have this information, double-check it with current residents and compare it with the provisions of your levy agreement. Usually, management fees are included in your levy but don’t assume this to be the case without checking the facts and getting everything in writing.
As a rule, management will often attempt to hold onto maximum control of such things as the annual and longer-term budgets, as well as restricting the input of residents and owners to a consultative level. When possible, check the service-level agreements and other contract documents to take account of any conflicts of interest between the managers, the developer, and any other party. Try to learn what processes are used to resolve conflicts and read the minutes of annual general meetings (AGMs) to help identify problems and solutions from the past.
The financial well-being of the retirement village is essential to help protect your risk, so check up on that. Take note of the amount of money in the budget that is spent on upgrades or renovations and whether there is sufficient money available to meet the costs. It could mean there will be a one-off charge against the residents or owners.
Contracts differ and by carefully studying and comparing them, you should find the necessary details of which services you can enjoy, especially on the issue of healthcare. If you do not understand any aspect of the contract, please get your lawyer to go through the contract with you before you sign it. Remember, you can negotiate changes to a contract if you are not happy with it. Always keep a copy with the signed agreement in a safe place and ensure that any alterations or promises are given to you in writing.
The village lifestyle and general atmosphere are important to consider before you buy. Visit the village a couple of times and ask residents about the security, restrictions on facilities, any past problems, the standards of meals where applicable, the maintenance of units and communal facilities, care if you should fall ill, and the relationships in the village between residents themselves and between them and the staff and management.
Inspect the accommodation and compare the different units. Not only the one you are considering buying, but also others in the same village and other villages. Make sure it meets your needs, both for now and in the future when you may become frail. If the accommodation is to be shared, meet the other residents to ensure that you will get along with them.
Finally, and most importantly, verify the condition, quality, and standards of the healthcare facilities available. A retirement village that includes frail- and semi-frail-care facilities must be registered with the Department of Social Development and will also be subject to the Older Persons Act. There are various issues you must consider, for instance, the level of service and cost for frail care, preventative care, and home care, which could vary.
The range of services can also differ substantially and sometimes services for people suffering from dementia, schizophrenia or manic depression are not included. At the same time, the service providers should also be checked out. Find out about the doctors, dentists, nurses, and other healthcare professionals available and whether there are regular visits by a panel of medical professionals to assess the standards of the facility. Find out if carers are available to provide in-home care and if so, what are the costs involved.
Frail care, if required, will add to your expenses but please don’t opt for frail-care centres that seem cheap. Some complexes will allow you a certain number of free days a year in their frail-care facility or you may pay a one-off amount as part of your initial purchase price that covers frail care whether you need it or not. Also, check whether you are guaranteed a place in a frail-care facility when you require it.
Finally, look at some of the extra features that might be included in a retirement village such as parking for residents and visitors, social and recreation facilities, communal buildings like dining facilities, covered walkways, a transport service, a laundry service, library, and social clubs. In the end, you should have a clear idea of all your commitments and the costs involved before signing on the dotted line.
As always, it is imperative you seek the advice of your trusted financial advisor and property expert. A certified financial planner and a tax-qualified advisor will be your best help during this last stretch. To get a broad idea of everything you have to consider prior to retirement, have a look at our best-selling book, The Ultimate Guide to Retirement in South Africa, and visit www.retirementplanning.co.za.
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