If you still have 35 or 25 years before retiring, should you be planning to buy a retirement home? According to a USA Today survey, 33 % of people within the age of 45-65 plan to relocate once they retire. Moreover, 24% of people in the same age group are not certain about what they want to do. This shows that most Americans consider the house factor when planning for life after retirement.
Demand for retirement homes has been on the rise in the recent years with many people shopping for homes they can spend the last years of their lives in probably with cash acquired from the sale of the old family house. Movoto.com and other property listing platforms are also getting more traffic, especially people seeking reliable retirement properties.
Retirement homes feature excellent amenities, for example, cafes, on-site salons and swimming pools. Older people like to live in such places because it offers independence and support. The home is yours, and also you are surrounded by people whom you share interests with. Also, there is a future safety net and easy access to care. But because of these attractive benefits, there are several things you need to note so that you are not caught unawares or left bankrupt.
- Find out the Exit Fees
Very often, landlords will require you to pay an exit fee upon the sale of a retirement house, and it is usually a percentage of the selling price. In 2015, Associated Retirement Community Operators launched a consumer code that requires exit fees to be explained transparently. However, it is essential to always find out about such fees to ensure you don’t get an unwelcome surprise.
- Know the Restrictions
In most retirement homes, there is a restriction on who can live in that property, and this is usually people between the age of 55 years and 60 years on the lower limit. Even though most people relocating to retirement home are of that age, the restriction means a grandchild or a child wouldn’t move in when the older people are gone. Moreover, in some properties, you cannot have pets. So it is important to find out when shopping for a retirement home.
- Know More about the Management Company
Most retirement homes are under the management of particular real estate companies and before you put your money there, it is necessary you research about the company and their reputation. You may find the company has had bad reviews. This is something to scare away potential buyers.
You also need to find out whether the company is a member of a known trade body. An example of such organizations is The Association of Retirement Housing Managers which is tasked with the responsibility of managing 100,000 retirement properties across the United Kingdom and endeavors to improve standards in the sector by ensuring ethics and best practices are upheld by companies managing retirement properties.
- Know the Service Charges
Besides ground rent, you will be required to pay a regular service fee in most retirement homes. This fee is paid to the managing company or the landlord, and it is used to take care of services like exterior walls maintenance, maintaining the gardens and cleaning of communal areas. Know how much is the service fee and what it covers.
- Know the Amount of Ground Rent you Will Need to Pay
In recent years, ground rents have been on the headlines after property owners added clauses in the leasehold agreement stating that ground rents increased almost to double in a decade.
Since the issue was publicized, the government has made a resolve to minimize ground rents in the future to zero financial value. But it’s possible existing retirement homes won’t be affected, and that is why you need to find out ground rent amounts and if they will go up in future.
- Check the Lease
Many retirement homes are leased and not sold permanently. Typically the lease should last for 999 years if the home you are buying is new. But most retirement homes are sold for 99 years lease.
The length of these leases reduces overtime if not extended, which is potentially costly. Moreover, short term leases make houses unattractive to buyers when reselling.
Looking for a retirement home is a great idea. These developments come with excellent amenities like shopping centers, swimming pools, cafes and restaurants, on-site care and salons. They also bring you closer to people of like minds while you are still the homeowner.
But there are several issues associated with retirement properties and which you need to take into consideration to ensure your life after retirement is smooth. It is also worth it to consult several people before investing your money to ensure you don’t spend in unexpected charges.
Once you do that, you are now ready to go ahead and buy your desired retirement home. If not, it’s time to get to work and save to ensure a smooth process.