To Rightsize To A Strata Apartment Or Retirement Village?

Deciding on a strata apartment or moving to a retirement village involves research, weighing up the pros and cons, and financial advice.

© Danielle Robertson Consulting Pty Ltd t/as DR Care Solutions

Lurking in the back of the minds of many senior Australians is the thought of selling the family home. They may be prompted by the burden of home maintenance and loneliness.

Once the decision is made, selling is a relatively straight forward exercise in an Australian property market that currently continues to rise^[1], and if you follow our Spring Clean Rightsize Guide^[2]! The catch is deciding where to move next.

Strata apartment or retirement village?

The decision as to whether to rightsize to a strata apartment or retirement village is very much a personal one, and one influenced by personal finances.

You may be drawn to one choice over the other because you have friends living there or family living close by. Understandably these personal reasons may see you jump to an immediate decision.

To help the undecided, we’ve listed some pros and cons we commonly come across when providing clients with care solutions.

Strata apartment pros and cons

The pros

• You own it and, in the future, can sell it to the open market, capital appreciation is all yours.

• There are no additional fees in purchasing and selling the apartment, other than standard conveyancing and stamp duty fees. The ongoing maintenance and insurance fees are straightforward, with you paying your share through a quarterly strata levy.

• A wide range of choices are available, with you choosing whether you wish to buy into a building with a pool, gym and other amenities, all of which you will have to pay to maintain through your quarterly strata levy.

• There’s the opportunity to enjoy intergenerational living with people of all age groups living in the apartment building.

• If there’s good in-home care providers with capacity in the area, you may comfortably remain in your apartment and receive in-home care assistance. You can also fit out the apartment with devices that can monitor your safety^[3] and undertake other modifications (rails, renovate the bathroom to remove the hob etc) as required.

The cons

• If your health is deteriorating rapidly, it may be wise to consider more supported living in a retirement village situation which is co-located with residential aged care.

• Unless you already know people living in the building or have family living close by, there is no guarantee that your loneliness will be resolved. Younger people and families are busy.

• Intergenerational living brings with it noise – young people and their parties and families with crying babies and teenagers. There’s no guarantee of peace and quiet.

Retirement living pros and cons

The pros

• With a concentration of people of similar age with time on their hands, there’s a good chance of finding like-minded people to share adventures and cups of tea. The issue of long, lonely days is likely to be resolved.

• A 24/7 emergency call system is available in all apartments.

• The apartment or villa is purpose built for older people with easy and safe access, and personal security, considered in all design elements within the living space and common areas.

• Some retirement villages are co-located with nursing and residential care facilities onsite.

The cons

• It is a little more complicated to buy into a retirement village with you buying the freehold (much like a strata apartment), leasehold, or licence. There are extra fees involved such as exit fees (Deferred Management Fees), on top of property maintenance, improvement, and insurance fees. Each Australian State and Territory has its own laws relating to the operation of retirement villages.^[4]

• You pay for all the amenities (pool, gym, sauna, cinema, bowling green etc), whether you use them or not.

• When you sell the freehold or transfer the leasehold, you do so to a more limited demographic – retirees interested in entering a retirement village.

• You may find yourself surrounded by people dealing with deteriorating health and absorbed in the topic of health issues.

• Most retirement communities don’t supply care or support services so consider the move carefully otherwise you may have to move twice.

Importance of planning

When you call on us to discuss your care needs, now and into the future, we discuss these pros and cons when drawing up your personalised Life Plan™. In addition to talking through the options, we will do the research for you on living options and introduce you to financial advisers specialised in the field of retirement living.

In the meantime, if you are thinking of selling up and rightsizing, rely on our tips in our recently released Spring Clean Rightsize Guide; download it here.

NOTE: The information in this blog is given as guidance and is not to be considered legal or financial advice.

The Spring Clean Rightsize Guide

DR Care Solutions and SPACE Property Advocates collaborated to create The Spring Clean Rightsize Guide to help you 'rightsize' for your stage in life. We are pleased to offer this Guide to you as a free downloadable. 

Simply fill out the form below and we'll send it right out to your email address. 

The Spring Clean Rightsize Guide How to 'rightsize' to a living space that meets your needs. Get your downloadable by filling out the form below.

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Need help caring for a loved one? Please feel free to call me, Danielle Robertson, at any time for an initial discussion on how to set up the right care, support and assistance at the right time and in the right place.

Resources

^[1] Forbes Advisor: Australian Property Market - 'Bank Of Mum And Dad' Gifting Deposits 
^[2] DR Care Solutions: Your Guide To Spring Cleaning & Rightsizing 2023
^[3] DR Care Solutions: The Australian Making 24/7 In-Home Care Possible
^[4] For example, the laws of NSW - NSW Government Fair Trading: Moving Into A Retirement Village