5 reasons to invest in a retirement property early
While many mature lifestyle estates have restrictions on the age of residents, there are no restrictions on buying property early as an investment. Because life expectancy is increasing, and the demand for property in mature lifestyle estates is only going to rise, getting in early is a wise decision.
“Property remains a sound investment and a great addition to any portfolio, and mature lifestyle estates provide a really worthwhile long-term investment,” explained Jonathan Acutt, Managing Director of Acutts Real Estate. “Buying into a retirement estate allows you to rent out the property to reliable tenants, but it’s important to do the relevant market research. Before deciding, consider factors such as the current rental income, escalation in property value, as well as the management and maintenance of the estate to ensure you’re getting a return on your investment.”
1. Security and lifestyle
The demand for safe and secure living has resulted in a rise in estates across South Africa, many of which include a retirement section or are completely retirement-focused. This is a great, all-inclusive investment with amenities and facilities available for residents’ use, 24-hour security, and ongoing maintenance. This makes mature lifestyle estates much more appealing for renters who want the convenience of a lock-up-and-go lifestyle without the added expenses.
2. Rental income
When investing in a retirement estate at a young age, the investment potential is increased through rental opportunities. Rental income generated through a retirement property must be in line with – or higher than – the rate of inflation. Acutt explained that an estate like Renishaw Hills on the KZN Mid-South Coast has shown remarkable rental returns. For maisonettes, investors are getting between R11 500 and R13 000 rental per month, depending on the location, with three-bedroom freestanding homes around R13 000 as well. For homes, this goes up to R17 000 a month with tenants benefitting from incredible sea views and on-site facilities.
3. Great resale value
Potential investors are also encouraged to assess the sales of similar surrounding properties over the past few years to better gauge the resale value. Acutt said that Renishaw Hills, which is now in Phase 6 of construction, was established in 2016. In that time, investors have enjoyed an escalation in home value of more than 50% - a significant spike. He explained that the quality of the finishes, facilities, lifestyle, and security all contributed to the escalation in value, which is only anticipated to rise.
4. Generational legacy
Buying a retirement property as an investment allows investors to generate an income without selling the property, thereby building a legacy for families. A good property portfolio has the potential to provide significant financial stability for the heirs.
5. Peace of mind
Retirement plans are often left too late, and when it comes to finding a suitable home, there might be insufficient housing stock or the prices are simply too high. By investing in a retirement property early, there’s time to do due diligence, research the market, and find a quality investment that can be paid off over time. This provides investors with peace of mind about the future.
Renishaw Hills forms part of the 2.6-million-square-metre Renishaw Coastal Precinct. This is the first development within the mixed-use precinct which is set to include residential, retail, educational, healthcare and light industrial/commercial zones. Residents enjoying the state-of-the-art security of Renishaw Hills have access to high-end facilities, extensive nature trails, and welcoming communities for retirees.
Renishaw Hills ticks all the right boxes for a valuable investment for those at pre-retirement age. This Scottburgh-based estate has just launched Phase 6, a series of high-end free-standing units and maisonettes boasting spectacular sea views and houses surrounded by coastal greenery.
While Phase 6 prices are fixed, the anticipated launch of Phase 7 in 2024 will see a potential price increase – all the more reason to secure this investment now.
