Buying a retirement home as an investment

Real Estate Blog

With an ageing population in Australia, many property investors are looking for the best way to structure their investment properties to take advantage of these changing demographics. Investing in retirement homes and villas is one way to invest in property for the ageing population. 

Here are some ways you can invest in retirement properties. 

Indirectly via real estate trusts

With around half of retirement villages owned by investment vehicles such as investment banks, one of the ways that you can indirectly invest in these properties is through real estate trusts. These can be a great option if you only have limited funds to invest as they offer relatively low entrance points, a diverse portfolio of assets and a regular rental return as well as the potential for capital growth. They can also be easily cashed out if the holder requires the invested funds for another purpose, without needing to go through the sales process required if the investor owns property outright.  

Directly purchasing a retirement villa

You can also purchase retirement villas directly off the plan or by direct purchase. These are then rented to elderly tenants and the rent is in part secured against the pension on some level. These have a relatively low entrance point compared to other property which has made them very attractive to mum and dad investors. However, many banks are unwilling to offer mortgages over these properties due to the challenges and limitations when it comes to selling and letting the properties. Equally, there is only limited potential for rental growth as the rents are often linked to the government pension which has limited rises. This can limit the desirability of this option on a pure investment basis. 

It is extremely important that, if you are directly investing in a retirement villa, you look carefully at the manager and review their history in managing properties. The manager will be the one responsible for making sure that shared facilities such as gardens are maintained, which can affect the overall attractiveness of the facility to prospective tenants. A great manager will make the whole facility feel friendly and welcoming to the tenants. 

If you are looking at investing in retirement property, it makes sense to speak to a real estate agent about properties available in your area. You can then compare these options to your budget and make a choice that suits your budget and investment goal. 


29 July 2016

Boosting Your Home Value Before the Appraiser Arrives

Welcome to my blog. My name is Anita. I am an artist and a writer, but I like to create with any canvas that I have, and that includes my home. I see homes as almost blank slates that need special touches to make them shine. Over the years, I have received a lot of calls from friends. When my friends need to sell their homes or have them appraised, they call me for advice. I think I've helped a lot of them get higher evaluations than they would have otherwise, and I love advising them. If you want tips and ideas on getting great appraisals, this blog is for you.