Plan early if you want to live in a retirement home. Here’s how...
Home is where the heart is…that’s what we have been told over the years. But the phrase can be reversed for many retired – the heart is settling in a retirement home. A growing number of them are finding themselves stranded in big houses when children get married or move away to further their careers.
Makarand Patil did not think of himself as a pensioner until both his daughters had shifted abroad. His main worry: What would he or his wife do if the other passed away? “I was very clear that I did not want to live with my daughters after their marriage,” says Patil.
It was this realisation that led him to search for a place which might not be as large as his existing home, but would have amenities, and even like-minded people of the same age. His search ended in a self-contained retirement community called Athashri, that had an in-house canteen, doctors on call and tie-ups with local hospitals, on the outskirts of Pune. He had two options — either an outright purchase or lease an apartment. He chose the former.
Patil is not alone. Many people, besides building a corpus, are prepared to invest in an old age home or community. Some of the options are:
Outright purchase
Property rates in such community houses are charged on market rates of that location, despite a spate of amenities provided that make life comfortable for a senior citizen, as Patil found. His property was valued at Rs 18 lakh four years ago.
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An extra deposit amount – Rs 3 lakh in Patil’s case – is also charged. “At present, this deposit amount is for three years. But these could also be revised later. We put the money in a fixed deposit and use the interest earned for maintenance charges,” said a representative of Paranjpe Builders.
However, there are conditions. While anybody may purchase a flat, only senior citizens can stay. A property may be passed on to a heir, but none may occupy one till retirement. The heir may rent out the property or sell it, but to a senior citizen. The cost of facilities like a canteen, doctor’s clinic, individual electricity and telephone bills have to be paid in actuals.
Leasing a property
Leasing is an option, but an expensive one. For a short stay of between one and three months, the charges would be Rs 50,000-2 lakh.
The period of stay is flexible. Senior citizens have the option to stay for just a month or for years. The rationale for a short stay is explained by Rajesh Shankar, co-founder, Clasic Kudumbam, “Assume you are going abroad and you have elderly parents at home. A short stay option would be perfect for your parents for the duration of your visit abroad.” Retirement communities like Dignity Lifestyle (near Mumbai) or Clasic Kudumbam( near Chennai) lease out cottages and apartments.
Permanent residence
One could also become a lifetime member by paying a lump sum. In addition, monthly maintenance charges are levied for use of facilities and recreational activities available. Charges for food, telephone and electricity are on actuals.
The advantage: There is a discount of up to 25 per cent on monthly maintenance charges. Even renting out cottages (to relatives) in your absence is allowed.
However, there are several conditions:
Funding
Most banks will not sanction such a high home loan if you have retired. You would get a home loan only if either your son or daughter is a co-owner of the property. Even in the latter case, the loan will be approved in your child’s name.
But if you want to plan earlier, say five years before retiring, loans are available. But banks prefer the entire repayment to take place before you retire. This would imply very high monthly instalments. For a leased property, if you cannot pay the deposit in lump sum, you may be allowed to pay in instalments.
