Real Estate Investor Magazine South Africa September 2016 | Page 44

INVESTING

Investing in

Retirement Homes
The Pros & Cons
BY DREW HOOK

T

he number of South Africa’s elderly requiring
a retirement home is growing.
Currently, those aged 60 and over make up
8% of the population, while those 50 years and above
comprise almost double that at 15.8%, according to a
mid-2015 report released by Statistics SA.
Retirement property meanwhile is not keeping
pace, comprising only a small portion of SA’s housing
stock. A lack of supply means retirement homes are
relatively scarce and expensive, especially for those
with modest funds who battle to find accommodation
and often face long waiting lists. But for those in the
middle- to upper-income brackets, the situation is
somewhat more favourable. And given the evolution
of retirement lifestyle estates, more are electing to
retire earlier.
Investing in a retirement home, which is located in
a retirement community, has its pros and cons. This
over 55 demographic has specific wants and needs
which are catered to in this type of community. It
is not the right investment for everyone, but it can
have great potential for the right investor. Here are
seven positives and three negatives of investing in
retirement homes.

7

Pros of Investing in Retirement Homes

There are many positives of buying a retirement
home as an investment property.

Baby boomers are retiring every day and are looking
for the ideal place to spend their leisure years. Here
are seven things to consider.
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SEPTEMBER 2016 SA Real Estate Investor

1Desirable Areas:

The first perk of investing in a
retirement community is the weather. These homes
are typically located in warmer climates. The great
weather is a selling point in and of itself. Not only
can you go and check on your property investment,
but you can also take in the sunshine while you’re at it.
In addition to being located in warmer climates,
retirement communities are typically situated close
to an active city or university. Not only does this
mean that there are many activities nearby, but it
also means that there is likely quality healthcare as
well. It is common for retirement communities to be
located near universities, which are known for their
stellar health care programs, such as Johns Hopkins
or UCLA.

2Ageing Population:

Members of the large baby
boomer generation have approached retirement
age and are looking for a place to call home in their
later years. Not only that, but people are living longer
than ever before. Retirement communities are a great
place for this ageing population to settle down.

3Maintenance Included:

When buying or
renting in a retirement community, monthly
fees often cover homeowner maintenance. Every
community will differ, but these fees can cover
everything from housekeeping to exterior yard-work.
Having exterior space, but not having to maintain it is
attractive to this ageing population.

www.reimag.co.za