Understanding the cost of Retirement Living
Moving to a retirement village is just as much a lifestyle decision as it is a major financial one. Before committing to a Retirement Village, it’s important to consider your budget, including ingoing and outgoing costs.
Our residents said that when they began to consider downsizing, they considered options such as staying in their own home, selling their home to move into a smaller home or strata titled apartment block, or considered Retirement Village living.
The cost of entering and living in a Retirement Village do vary, depending on the type of property, the facilities and services offered. Here are some costs you will need to consider:
The costs of entering a Retirement Village vary depending on the type of property and services offered. At Bethanie, many of our villages are available to purchase through a lease for life arrangement.
As a new resident, this means you’ll pay an upfront entry fee. This is in the form of a 60-year lease agreement and gives you the exclusive right to occupy your home and use the village common facilities until you decide to leave. And best of all, you don’t pay government stamp duty which is a significant saving.
As many of the lifestyle amenities are also included in the village, you won’t have to worry about budgeting for lawn bowls, swimming pool access, men’s sheds, social clubs and transport costs to and from your home. In addition to the entry fee, you’ll need to pay a small fee for the preparation and execution of your lease agreement.
During your stay, you’ll pay a weekly village levy to help cover the maintenance and running costs of the village. This is similar to the costs you would be required to pay in a strata titled apartment or villa. Depending on the age of your current home, the levy may be less than the costs of maintaining your home.
The levy includes use of all the facilities, maintenance of the common facilities, ongoing repairs, cleaning and gardening, building insurance for your property, shire and water rates, security and your personal emergency alarm system.
You’ll also need to consider your personal living costs including utilities, contents insurance, telephone and internet, groceries as well as extra lifestyle expenses like travel.
When it’s time to leave your home, there are costs associated with selling the property to a new resident. As with all property sales, you’ll have selling fees and marketing charges. The value your home is sold for is determined by market forces and you’ll receive the balance minus your exit costs.
There is the Deferred Management Fee (DMF), which is a cost payable to the operator of the village for putting in all the facilities you have enjoyed whilst living in there and is also used for other projects and possible developments.
In addition to the DMF, a contribution is made to the Reserve Fund which is set aside for major capital repairs in the village. Unlike in a strata titled villa or apartment where unexpected major repairs might be a significant and unmanageable cost to your budget, the Reserve Fund provides you with absolute peace of mind during your time in the village. All major repairs are funded from the Reserve Fund.
Both the DMF and Reserve Fund are usually calculated as a percentage each year you stay in the village, however, they are only paid from the sale proceeds of your home when you leave the village.
You’ll also need to consider restoration works to your home prior to it being sold to ensure it is in a similar condition to when you first moved in. These costs may include painting, new flooring and other minor items and are similar to what you would ordinarily spend when preparing a house for sale.