If you’re like many retirees who are considering a move to a lifestyle or retirement village, chances are you’re finding the process confusing. While lifestyle villages can significantly improve your day to day life, if you make the wrong choice and end up in a village that doesn’t meet your needs, it can be a disaster. So what are the 5 mistakes people make when choosing a village – and how can you avoid them?
Be Sure That a Lifestyle Village is the Right Choice for You
Most retirees have been home owners for many years, and are used to having complete control over all the decisions related to their house and land. Living in lifestyle villages is different, and a more communal living arrangement can be a big adjustment for some.
There are many advantages to lifestyle village living, including on site facilities, less home maintenance, increased security and the chance to be part of a social network of like-minded people. There’s also a range of different accommodation options that are offered. Depending on the village you choose you could be living in an apartment, a unit or a house complete with your own yard. Having your own house is a great way to maintain your independence while also enjoying the benefits of a close knit community.
Not Understanding the Type of Contract
You may have noticed that there are a number of different types of contracts in retirement or lifestyle villages – and the type you choose will have a big financial impact, both now and in the future.
Three common types of contracts are strata title, leasehold and rental. Each have quite different legal and financial implications, so be sure that you fully understand exactly what is involved before you sign. Both strata title and leasehold contracts can include monthly or quarterly maintenance fees that are paid while you are living in the village, plus substantial exit or deferred management fees when you decide to sell. The third option, which is offered at Village Lifestyle Park, is rental, and this means you own your house within the village and pay rent on the land – and importantly, you’ll avoid exit fees when you sell.
Ask the Right Questions Before You Sign
There are plenty of things you need to know before you decide on a village that’s right for you – so don’t be afraid to ask lots of questions to any potential village operators. In fact, not asking the right questions could mean you end up in a village that doesn’t meet your needs – both in terms of lifestyle and financially.
When you ask the right questions you’ll be educated on everything from your legal obligations and fees that are charged, to the facilities and activities on site. This means that you’ll be equipped with all the information you need to make the right decision.
Not Understanding the Ongoing Charges and Exit Fees
The fee structure within many retirement villages is complex. Certain contracts may require you to pay a large amount of money in ongoing maintenance fees while you’re a tenant, plus hand over a large proportion of your profits when you sell in exit fees. Often the fees are explained in percentages, which can sound small, but remember that this can actually turn out to be thousands of dollars.
But the good news is that not all villages charge maintenance or exit fees. Village Lifestyle Park Traralgon chooses not to charge deferred management fees as they believe they are unfair and exploitative. So do your sums, and know how much you’ll be paying – both now and when you sell.
Not Seeking Legal Advice Before Signing a Contract
Because of the different types of contracts available, and the complexities within, it’s essential that you consult a legal professional before you sign anything. Choose a firm that has experience with retirement village contracts, and make sure that they explain to you your legal and financial obligations both when you enter a village, and when you exit, plus, what you’ll need to pay while you are living there.
Keep in mind that investing a little money and getting some sound legal advice now, could end up saving you thousands in the long run.
If You Educate Yourself Now, You’ll Reap the Benefits Later
Moving into a lifestyle village is a huge decision, so make sure you tick all the boxes and ask all the right questions before you sign any contract. Everybody is different, and every village is unique, so don’t rush into a decision until you have all the facts. By avoiding these common mistakes, you give yourself the best chance of finding a village that meets your financial and lifestyle needs – and of finding a new home that you love living in.
If you liked this post, Download our FREE guide, 20 Questions You Must Ask BEFORE Choosing a Village.