There can be several financial benefits to moving into a retirement village. These include shared maintenance costs, potentially no need for building insurance, no council rates, and the potential for cheaper electricity expenses. There are also the lower ingoing fees compared with similar sized homes in the same area. However, the overall situation depends on your unique circumstances.

With various options of retirement homes and villages available, each with different costs and fee structures, it is important that you fully understand the relevant contract that you would be required to enter into and the related fees and other items that you would remain responsible for. If you have parents moving into a retirement village, you may also be concerned about the potential return on investment when they vacate the property, and it is resold.

When assessing whether a retirement home is a good investment, it’s also important to consider that the primary value of a retirement village is not only financial. The value of a retirement community is often in the enhanced quality of life, care services, and social opportunities it provides for residents.

For family, it means peace of mind and reduced financial and physical burden, with the knowledge that parents are enjoying their golden years within a community of people in similar situations and with ready access to appropriate support networks.

Is a retirement village a good financial investment?

Whether a retirement village is a good financial investment depends on your individual circumstances, as well as the retirement village itself. This includes things such as the village location, current property prices, and market value, as well as the existing value in the family home. It is much like buying a normal home and external factors that impact property prices are going to have a similar impact on the value of a home in a lifestyle retirement village.

However, there are some additional benefits of buying into a retirement village, as well as some additional costs to be considered if your parents are planning on moving into one.

Some of the financial benefits of buying into a retirement village include;

Low incoming fees vs. house prices:

The price to move into a retirement village is normally significantly lower than similar property prices in similar locations. According to the 2021 PwC / Property Council Retirement Census, the average sale price for one- and two-bedroom independent living units was 55% of the median house price in the same postcode. Generally, the family home is sold at a higher price than it costs to live in a lifestyle village. This can free up funds at the start of the tenancy, making a good retirement more affordable.

Cheaper than downsizing independently:

Purchasing into a lifestyle village means better bargaining power when pooled with your fellow resident’s expenses. This can help reduce the costs for bills for things like water usage and rates, electricity, gas, council rates, and potentially household contents insurance.

Maintenance-Free Living:

Owning a home comes with a range of responsibilities, from property upkeep to household repairs. In a retirement village, seniors can bid farewell to the burdens of home maintenance. This enables them to focus on enjoying their hobbies, spending time with friends, and pursuing activities they are passionate about, without the stress of managing a property. Home maintenance, repairs or renovations, and garden upkeep are normally covered by the village fees.

Professional Care and Support:

Retirement villages are equipped with specialized staff trained to cater to the unique needs of senior citizens. From medication management to assistance with daily activities, retirees can receive the support they require to maintain their health and independence. Trained medical professionals and caregivers are available around the clock, ensuring that any emergencies are attended to promptly, providing families with peace of mind.

Many retirement villages are also strategically located near medical facilities, ensuring that residents have swift access to healthcare services when needed. Additionally, some villages offer on-site healthcare facilities or partnerships with nearby clinics, simplifying the process of obtaining medical care and check-ups.

Therefore, village fees should be weighed against the likely costs for access to medical practitioners, physiotherapists, and other professional services as well as, transport to and from appointments.

Access to amenities:

Keeping fit and active is important in retirement. Gym memberships, club and sports memberships, personal trainers, and transport to and from appointments can cost thousands of dollars annually. However, many retirement villages offer these as part of their ongoing fees so it is important to include these costs in your comparisons.

Retirement villages like Mount Gilead Estate offer exclusive access to premium facilities like a golf course, indoor heated pool, outdoor pool, gym, clubhouse, lawn bowls green, games room, and more. These facilities encourage an active and healthy lifestyle, promoting physical activity and mental engagement.

Financial certainty:

Transitioning to a retirement village can streamline financial planning for seniors. Monthly fees often cover a range of expenses, including utilities, maintenance, amenities, and in some cases, even healthcare services. This predictable cost structure can help seniors and their families better manage their finances, eliminating the uncertainty of unexpected expenses.

The downsides of retirement village costs

There are different pricing structures across all retirement villages so it is important to understand the contract before signing up to move into your own retirement home. There are going to be incoming fees and potentially a deferred management fee which is paid at the end of the contract, as well as ongoing monthly charges. What is included in these fees and charges will impact the return on the sale of the property at the end of the agreement.

Many villages require a capped deferred management fee at the end of the lease agreement as well as a large portion of the capital appreciation of the property. Unfortunately, it is common to expect some villages to take up to 40% or more of the resale price, with some taking capital gains on top.

At Mount Gilead Estate we are completely transparent with our fees and pricing. You can find more information about what it costs to live at Mount Gilead Estate here. This includes some of the lowest ongoing fees compared to similar villages and housing options and a capped deferred management fee based on a sliding scale that will never exceed 30% of the sale price. See how competitive our fees are for you.

Are retirement villages worth it?

Retirement villages are a lifestyle investment. That is, they can offer retirees a lifestyle they may otherwise not be able to afford in their own homes.

Retirement villages often offer a comprehensive package of care, community, convenience, and security that can greatly enhance the quality of life for aging parents. These communities provide tailored support, foster social connections, and promote overall well-being, making them a superior choice for the later stages of life. By considering the unique needs of your parents and exploring the retirement village options available, you can ensure they enjoy their retirement years to the fullest.

Safety and Security:

Think about your parent’s safety and security needs. Retirement villages often provide a secure environment with staff available around the clock. If your parent has concerns about living alone or needs assistance in case of emergencies, a retirement village’s safety features can offer reassurance.

Social Engagements:

One of the most significant benefits of retirement villages is the built-in social community they offer. Seniors often face feelings of loneliness and isolation when living alone at home. Retirement villages, on the other hand, provide a vibrant atmosphere where residents can engage in a variety of activities, clubs, and events tailored to their interests. This social interaction helps combat feelings of solitude and enhances mental and emotional well-being.

Flexibility and Freedom:

Choosing a retirement village for your parents allows you the flexibility to visit and spend time with them without the constant pressure of providing round-the-clock care. You can enjoy your visits and focus on enjoying shared activities.

Future Planning:

Consider your parent’s long-term needs. While they might be relatively independent now, it’s important to think ahead. Some retirement villages offer a continuum of care, allowing residents to transition to higher levels of assistance as their needs change over time.

How living in a retirement village impacts the family:

The decision to move into a retirement village is a personal one. How it impacts the family will depend on the family’s current circumstances. It will also depend on where the retirement village is in relation to other family members, any medical or physical care needs, and the financial position of the parent(s) considering moving into a retirement home.

However, it is common for families to feel a sense of peace with the understanding that their parents are living in a community that will offer better safety and security as well as access to visiting medical staff that they wouldn’t be able to get in their own homes.

Additionally, opting for a retirement village can significantly ease the caregiving burden experienced by family members while enhancing the overall quality of life. When the caregiver role is shared with professionals in a retirement village, interactions between family members can shift from being solely focused on care to more meaningful quality time together.

In the end, there’s no one-size-fits-all answer to whether a retirement village is the right choice for your parents. When considering the needs of your parents and the increasing challenges that come with aging, as well as the difficulty in maintaining the family home, it is easy to see the true value that retirement villages can offer.

It is important to evaluate your parents’ financial situation against their likely support and lifestyle needs both now and into the future. Research fee structures of various villages and compare options to find the one that aligns with your parents’ financial capabilities.

It might be helpful to visit different retirement villages, talk to current residents and staff, and gather as much information as possible before deciding. Consulting with healthcare professionals, and financial advisors, and considering your parents’ preferences can all contribute to making an informed choice that best suits their well-being and lifestyle.

For more information about Mount Gilead Estate retirement homes please get in touch with us. complete the contact us form here or give us a call at 1300 686 122.