Retirement home vs. leasehold apartment: what is the better option?

Summary:

The factors to consider are, how much care you are needing? If a comfortable lifestyle is desired? And if you are wanting to free up capital to enjoy the latter years of your life? Read on in the bio for more information or watch the bio.

What is the better option for my retirement? Leasehold is great for lifestyle and means you can have a fantastic life. The annual fees can be quite affordable and it is more desirable than buying a retirement home or apartment.

Leasehold apartments can be a better option as the properties are usually on the waterfront in a stunning apartment with a beautiful view. It allows you to free up capital to use for external care if needed or to enjoy the latter part of your life with travel, adventures and so on.

With the purchase of either a retirement home or apartment your cost is much higher as you are paying for the facilities and staff involved. These are often in areas that are not as desirable as Leasehold apartment areas and when it comes to selling you are only entitled to get back 75% of what you pad.

As I am not yet in that demographic I can’t be accurate in what is the correct choice but I can suggest that the Leasehold option shows more desirable attributes than being in a retirement village or apartment complex.

TRANSCRIPTION:

Good day, Andrew Murray here from The Apartment Specialists, and today we'll be talking about a retirement home and leasehold apartments. Now, I've recently just taken an elderly couple through a lovely penthouse which would have been probably worth about a million and a half if it was freehold, and obviously it was going for a fraction of the price, being leasehold. Now, leasehold is great for lifestyle. Of course, you  have those outgoings, and all the numbers worked for them and it was great.

But that's not what really got me thinking, because what they did is, they actually talked to me about their other option. And that was going into a retirement home or retirement apartment and the costs involved. I checked this all out, and what they said was 100% true. Basically, their other option was to go and purchase an apartment in a retirement sort of village complex. They're purchasing at freehold prices, and there's not enough of them so the prices are very, very expensive.

Yet when they choose to sell that apartment, for whatever reason - if it's because they've passed away. They suddenly change their mind for whatever reasons, and they only get back 75% of what they paid, even if the market had doubled. Whether that was at 1 year; or 5 years; or 20 years down the track. Then on top of that, they had to pay for the renovation of the apartment to get it ready for sale. On top of this, there were all these costs involved of having people on call 24/7.

This got me thinking. Leasehold is about lifestyle, it's about freeing up capital to be able to use in other areas to create more income. It's just simply to enjoy your lifestyle because you're asset rich, cash poor. But it made me start thinking about - is this actually or could it be an option that's better than this retirement option seems to be? It shocked me, and the reason why I'm thinking that is the lifestyle is clearly - you're on the waterfront.

You're living in a apartment that is stunning. It's only the last couple of years where you really need the care, in my opinion. Now, please take it that I can't talk for the demographic that's actually involved here, because I'm a younger male and I don't have the authority to do so. So, this is more about just getting people to consider or ask questions. But if you could organise a private firm to come and be on call 24/7 in your huge apartment on the waterfront, at the push of a button.

You've got all this capital to go on cruises or holidays, which is actually the better option? And as I said, I don't know because I'm not in that demographic, because there's so many other things to consider. But from a financial and lifestyle point of view, it seems like a no-brainer to  all those people who are in that demographic, it's something to think about.

Check out the  numbers on both sides, and the lifestyle, and what you need. I'll be really interested to hear from you on what your thoughts are. Anyway, Andrew Murray, Apartment Specialists.

You can email me at [email protected] or call +6421 424 892 and I’ll be happy to hear your opinions.

Cheers!