The ultimate “How To” guide for researching retirement villages.
Start with location
Arguably the most important decision is where to move. I go into the location decision in more detail HERE, but essentially most people choose a retirement village that is already within their local area. This makes a ton of sense, as you already have an established network of friends, health practitioners and favourite cafes.
However, some people choose a location outside of their local area. They usually do so for the following reasons:
- Move closer to kids/family;
- Geo-arbitrage (more on this fancy term below); or
- Change of climate/lifestyle.
Move closer to kids/family
Many people wish to live closer to kids/family, who may have moved away for reasons of career or love. It is a compelling argument to want to be closer to kids/grandkids and be a part of their lives. It is also reassuring to know that there is family nearby to support your ageing journey.
A word of warning though! Younger generations are significantly more mobile than the previous workforce and will consider relocating for career opportunities. If you are moving to be closer to family, do think about the likelihood and consequences of the family you have relocated to be closer to, moving away on a permanent basis.
Geo-arbitrage
Geo-arbitrage (geographic arbitrage) is a fancy, all-encapsulating word to describe moving from a high-cost location to a low-cost location. The “high cost” component could be used to describe the high cost of living in a particular location, such as Australia, and replacing that high-cost location with a low-cost location, such as Vietnam or Thailand. Although retiring overseas dreamed about and reported in the media, the reality is that few retirees ever actually move overseas.
The geo-arbitrage more relevant to Australian retirees is related to housing, that is, moving from an expensive house/location to a cheaper house/location. More specifically, moving from a standard family home in an expensive area like Sydney or Melbourne, and relocating to a less-expensive regional area such as South Australia, Central Queensland or similar, where your dollar can buy a lot more house.
The geo-arbitrage strategy makes a lot of sense, particularly for retirees who need some extra $$ to top up their retirement funds, but it is a massive decision.
Change of climate/lifestyle
There is a well-established path from the southern states of Australia to the northern regions, as people use retirement to trigger a move away from cold and wet conditions. This also makes a lot of sense.
We also see moves from the northern reaches of Australia – North Queensland, Northern Territory – to larger, southern regional centres, usually in search of better medical care as well as a break from the unrelenting heat. There is a reason why there are few retirement villages in the NT!
Similarly, retiring country folk move in from the land in the western districts, usually to coastal regions, but also larger regional centres.
Once you have narrowed down a choice of locations, it is time to start researching your accommodation options.
Over 50’s or Retirement village?
You can learn more about the difference between over 50’s communities and retirement villages HERE.
There are not many locations where you will have the choice of a retirement village or anover 50’s community. Metro areas will usually only have retirement villages, while the over 50’s communities are predominately located in regional areas or outer (well-outer!) metro areas.
Over 50’s communities and retirement villages are similar in that they are communities purpose-built for older, retired people. Some provide an excess of facilities including gyms, pools, bowling greens, wellness centres, etc, while other provide basic facilities such as a community centra and games room. Basically, you get what you pay for.
The main difference is in the financial arrangements. In both, you have some kind of lease or licence to occupy – in retirement villages you lease the unit; in over 50’s you own the building and lease the land its sits on. There are many variations of around the terms of your lease/licence/right to occupy and the fees involved. In retirement villages you will typically pay an exit fee from the resale proceeds, whereas in over 50’s communities the upside (or downside) is all yours. Some over 50’s operators in Victoria charge exit fees as well, but this is rare.
Which leads into the next step…
What can I afford?
Retirement villages and over 50’s communities are both significantly cheaper than the surrounding median house price, but you do need to contribute some sort of up-front payment to secure your lease or licence (in a retirement village) or buy the house (in a land-lease community).
What can you afford to pay?
Most people moving into retirement villages and lifestyle communities fund their purchase from the sale proceeds of the family home.
The first step is to find out what your house is worth, and there are a couple of ways you can do this. Firstly, if you are pretty web-savvy you can find some sites that will give you a free appraisal of what your house could be worth. Here are some examples:
Please note though, that these sites use historical data from property sales that may be up to six months old – not that accurate in a fast-moving (up or down) market. You can get a more focused appraisal attuned to the current market nuances from a local real estate agent. Speaking with local agents is also a good strategy if your house has characteristics that make it unique or different from the surrounding suburb. I would suggest speaking with two or more agents, so you can sort out the bullshitters and get a few different opinions.
Once you have an indication of the value of your home, the next step would be to decide if you need to use any of the cash proceeds for reasons other than to fund your retirement village/over 50’s community purchase (ie, top-up your superannuation). Subtract these costs from your sale proceeds and the resulting amount is what you can afford to spend on your new retirement village/over 50’s community dwelling!
Finding the options in your chosen location
Everyone knows how you research residential homes – you simply jump on www.realestate.com.au, feed in your suburb and start scrolling!
I am pleased to say that it is similarly easy for retirement accommodation options. There are two websites in particular that function in pretty much the same way as realestate.com.au. They are:
Between these two sites, you will find an exhaustive list of retirement options in the locations of your choice.
I should mention that www.realestate.com.au also features retirement living options. After you select “Buy” and enter your location preference, you can click on the “Filters” option and see a choice for “Retirement Living” under Property Type.
You will have to figure out from the advertisements which properties are retirement villages and which ones are over 50’s. After a while, you will begin to recognise the different operators and immediately identify over 50’s from retirement living (currently there are no operators that do both retirement villages and over 50’s). Over 50’s will typically describe themselves as “Over-50’s” or “Lifestyle” communities.
Google is your friend
All villages have websites (this is a legal requirement in Queensland) that include a wealth of information on the village itself and retirement living in general. Village websites are built to target local enquiry, so your best option is to run Google searches as follows:
“retirement villages Newcastle”
“retirement villages Sunshine Coast”
Simply type “retirement villages” and then the area of your choice. Google will do the searching for you and provide you with a list of options to research.
Downsizing.com.au is also a useful portal – its like www.realestate.com.au but specialising only in retirement villages and over 50’s communities.
The larger retirement village operators that run multiple sites also have great websites where you can search by location. Here are some of the larger operators:
For profit:
- Aveo – National
- Levande – National
- Keyton – National
- RetireAustralia – National
- Teman – National
- TriCare – National
- Ryman – VIC
Not for profit:
- Bolton Clarke – national
- RSL Lifecare – NSW
- Baptist Care – NSW, ACT, WA
- Anglicare – NSW
- Calvary Care – NSW, VIC, SA, TAS
- IRT – QLD, NSW, ACT
- Australia Unity – VIC, NSW, QLD
- ECH – SA
Inspecting potential communities
Once you have identified the sites in your preferred locations, it is time to make an appointment to inspect.
Some questions I recommend you ask during your inspection:
- Is there a wait list?
- Is there a cost to go on the wait list?
- How long are people on the wait list?
- How long is the wait list for my preferred style of unit?
- How often do prices go up? When do you review prices?
- Can I buy pending the sale of my home?
- If I put a deposit down, does it hold the unit for me?
- How long does it take to sell a unit once it becomes vacant?
- How many units do you sell each year?
- What is the monthly/weekly fee?
- Check on the pet policy (if you intend to bring a pet).
- Get a high-level view of the pricing and contract arrangements
Makes sure you take notes (and photos) during and after your inspection. Once you have completed a couple of inspections, they will all blur into one another!
I recommend that you buy my ebook prior to starting inspections, as this will give you a deeper insight into the kind of questions you need to ask around the contracting arrangements.
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The last word
When writing this article, I really felt like it was completely pointless. In my experience, no-one does their research in a planned, calculated way. They simply start inspecting communities in their preferred areas and fall in love with one. The reasoning is hard to put into words – most people (to quote the movie The Castle) just say it’s the vibe!
So don’t be too hard on yourself if this is your experience. Go with the vibe!
Suggested next read:
- Choosing a location
- What is the difference between a retirement village and an over-50’s community?
- Wait lists
- Exit fee