Profit From Retirement

A coastal or beachside retirement residence with resort facilities need not be the exclusive domain of the wealthy retiree in Australia.

“Downsizing” to provide surplus cash for leisure activities and/or travel can be achieved in many ways.

We will not repeat here the continuing publicity and statistics surrounding the forthcoming changes in population demographics in Australia, via the “baby boomer”phenomenum, involving the exodus from capital cities and regional areas to more leisure oriented locations. This provides opportunities for the investor and investee.

Despite the publicity about the wealth of impending “baby boomer” retirees, there are a large number who do not fit this category, and will “outlive” their superannuation provisions.

There are several options available to those wishing to downsize and convert equity to cash:-

1. Retirement Village
2. Residential Parks
3. Downsizing
4. Sale & Leaseback
5. Reverse Mortgage

We discuss these separately as below.

A. RETIREMENT VILLAGES
These offer a variety of options with different types of tenures, conditions, resale requirements etc. The conditions of purchase and sale can be quite detailed and sometimes complicated, requiring the assistance of Solicitors familiar with this type of property. We have experienced contacts in this field.

B. RESIDENTIAL PARKS (as opposed to a Caravan Park)
These range from converted caravan parks or older established villages typically offering transportable homes from $0 to "up market" resort style facilities with new homes up to $300,000. The latter are very attractive and contain the more conventional permanent appearance type homes which are built largely on site. Facilities include all types of sporting facilities, central clubhouse, library, indoor pool and gym, boat and caravan storage areas.

From the individual house owners point of view, whilst they rent the site covering rates and maintenance etc., they enjoy a sense of community in a security controlled environment, with resort facilities and a location that cannot be otherwise achieved for such a low outlay.

Recent legislation offers security of tenure and eliminates the possibility of termination of tenancy that existed before.

We have good information on these properties.

Investors and Developers
Purchase of these totally developed residential parks are being keenly contested for several reasons. They are showing good rate of return, plus capital growth.

Apart from this higher than normal residential investment return, the tenancy risk is extremely low. There is no vacancy on the sites with houses, and there is a guaranteed minimum rental increase based on CPI.

C. DOWNSIZING
This involves say selling the family home in Sydney for say $900,000 and buying a similar standard of home and location, at Lake Macquarie for $450,000 and accessing the balance of the funds.

We can provide valuation advice on a suburb offering the above, adjacent to major infrastructure and medical facilities in Newcastle - only one and a half hours from Sydney, plus a level walk or ride to:-

• Beach
• Lake
• Club
• Shops and Hotel
• Marina
• Restaurants
• Golf Course

D. SALE AND LEASEBACK
This option involves selling the existing home to intended beneficiaries and leasing it back under a lifetime tenancy, to access or free up capital.

This can be in the same location or downsizing to a new location, on a leaseback arrangement. Providing sufficient deposit to the beneficiaries to assist purchase, may be an option. The surplus cash generated from the sale of the original family home, when invested, should pay the rent and provide surplus for living and travel. The original cash surplus deposit can be gradually utilised as time goes by.

This gives the beneficiaries a tax deductable investment without any vacancy. We can introduce you to experienced Solicitors to overview this process.

E. REVERSE MORTGAGE
This means borrowing against the home, with no repayments until sale or demise.

We can arrange such finance.