How to choose the right retirement village
Wednesday, 15 December 2010 5:46 PM
Long-time industry expert Roger Southam explains what to look for (and what to avoid) when deciding which retirement village to invest in.
As we zoom towards old age, we assume it will be a time of peace and harmony. After all our years toiling we expect respect and an ability to reflect without trouble.
Unfortunately for some unwitting investors, though, buying a flat or house in a retirement village can present some of life’s toughest challenges. But while there is an awful lot documented on the pitfalls, the scams and the problems that have been experienced by the unlucky few, I felt it appropriate to think about what makes a good retirement village.
What are the elements you should look for? What would give you the ability to sit in a rocking chair and reminisce without strife or worry? Well, the most important starting point is the quality of the development and the reputation of the developer. The boom of the Noughties saw some of the worst constructed developments imaginable. If you are buying second-hand, then check out expenditure on repairs by the managing agent – always a good clue as to a property's condition.
The lease terms outline how you have to repay costs, the standards you can expect to live by, and the penalties for moving on. A good lease would be clear, have no penalty payments to be made to the managing agent or freeholder, no escalating ground rent and clarity on responsibilities for maintenance and repair. Make sure you get your lawyer to look your lease over and explain what you're getting into.
Of course, all properties in a development will be similar and therefore if the flat you want is not in an acceptable condition you would need to look at another site.
The vital cog in the running and managing of the development is the managing agent. Be it retirement flats or mainstream blocks, the managers can represent the good, the bad and the indifferent! So how do you know who is who? Get their name and check out what is being said about them online. Watch out for those who change their name to hide the past. This is usually catalogued by the commentators, so you just need to do your homework.
At the end of the day, any lifestyle change is a major decision and should be approached with eyes wide open. It's easy to say but never be afraid to ask questions, find out what you do not know, and if anything looks wrong or suspicious, seek an explanation. You can make the right choice if you invest the time and energy. Donald Rumsfeld hit the nail on the head when he said, “We have unknown knowns.” Get everything known! Then hopefully you can sleep peacefully and dream of days gone by...
Roger Southam is the chairman of residential development management company Chainbow.
