Whether you’re retiring now or only some years hence, it’s good to think about the property you’re going to settle into, because it have a major impact on your quality of life.
Type of retirement property
There are a few different options when it comes to buying retirement property:
Life rights fall under the Housing Development Scheme for Retired Persons Act, and they give you the right to occupy a particular home for the rest of your life. There are no legal costs involved with life rights, but the property never becomes an asset so you can’t leave it to an heir.
Sectional titles, like apartment blocks, entail registering a unit through the Deeds Office. Legal costs include transfer duties and conveyancing costs.
Share block lets the owners of shares in a company occupy specific sections of a building. Minimal costs are involved.
You need to consider your choices carefully, and consult with a financial planner or real estate consultant about the nuances of each one.
Factors for choosing property
There are a few points to bear in mind when deciding where to retire.
Location – The case used to be that retirees always flocked to the coast. However, we now see many opt to rather stay close to family and support.
Facilities – The infrastructure and amenities you’ll want to live close to depends from person to person. Bear in mind what kind of care you’ll need in your later years. Also consider what your hobbies and interests are. Retirement is the time you can leisurely spend doing just what you want to do.
Price – The price of retirement varies, and can be anywhere from R600 000 to the upper millions. When determining your budget, think carefully about what you’ll need in your old age. Use a bond affordability calculator to help you make the right decision. Remember that there are often additional costs like rates and taxes.
Before you sign
There a few things to do before you sign, to make sure you remain happy with your choice in the years ahead.
Do some research about the developer or controlling body, because you want to make sure it is financially strong and healthy.
Take your time in reading all the documentation before signing. Preferably, speak to a lawyer or financial advisor about anything you’re unsure about it. If the property agreement is only being signed by either you or your partner, find out what will happen to the surviving partner in the event of death.
Finally, make sure you’re clear on the date of occupation, and whether there are additional costs on signature like administration fees and deposits.