Retirement homes

The twenty-first century has seen a steep rise in life expectancy due to improved medical facilities and the decline of the joint family concept. Senior citizens are now more vulnerable in their last years.

For their welfare and care, older people need their community. Senior citizens today have a choice of retirement homes that take care of their needs and are stylish.

Private developers are exploring this field. The demand for housing projects that cater to only this group is increasing as more Indians become wealthy. At least 30 of these projects are in existence, and another equal number are in consideration. These retirement homes are mainly in suburbs of metropolitan areas, and some are at well-known retirement destinations like Dehradun, Goa, and Coimbatore.

These housing projects are not for the elderly or those who have been abandoned. Retirement homes today are vibrant towns that provide security and food for seniors.

What are the reasons for growing demand?

Many factors drive the demand for Indian retirement homes. India’s so-called “demographic dividend” will soon become grey. India is a country of country of youth.  

There are 60 million Indians over 60 of age in India. This figure is approximately 8% of India’s total population. It is expected to increase by 2% each year until 2030. 

While India’s population grows at an average of 1.8% per year, seniors are increasing at a faster 3.8% rate every year. This is why large corporate groups such as the Ashiana Group(Utsav), LIC Housing Finance Limited, (LIC HFL Care Homes), Tata Housing Development Company Limited (Tata Riva in Bangalore), and Max India Limited (Antara Senior Living Dehradun), have entered the construction of senior citizen homes.

There is a growing demand for Indian retirement housing at the moment of 3 lakh units. There are many options available, with sizes ranging from 300 sq. ft up to 2500 sq. ft. While you can purchase a basic apartment for 25-30 lakh, a medium-sized unit may cost Rs 55 to 65 Lakh. The price of a home varies depending on its location and city. Luxury villas are available for those who have the means to pay a lot. There are additional charges for services. Monthly charges for a couple are 5,000 to 25,000 for standard services and 30,000.00-50,000 for luxurious services.

Senior citizens often retire financially independent with full support from their families. The problem comes when their grown-up kids move to another country or city for work. These people seek convenient retirement resorts to address their safety concerns, healthcare needs, and loneliness/isolation.

Safety, Security, and Health Care are areas of concern.

Security and safety are vital concerns due to the increase in crime against seniors in cities. Many assisted-living facilities offer 24-hour security and CCTV for senior citizens to ensure that everything is in order. You can also get emergency healthcare services. Senior citizens can be taken quickly to the hospital for first aid or if there is an emergency.

This is a huge relief for the children of senior citizens who might have recently moved to another country or city for work.

Before you decide to buy it, what precautions should you take?

Begin by inspecting the area where you plan to invest. Next, ask about the facility provider (township developer) and whether they can match the cost. Check the reputation of any service provider if they are vertically integrated or availing services from others. You should also ensure that the services are up to the residents’ expectations.

Ask residents who live in similar projects if this is a brand new project. Visit the older projects of the company and ask residents about their satisfaction.

Ask about the provider’s expertise in geriatric care. Although these projects provide many amenities, they are more expensive than regular housing projects. It is wise not to concentrate on luxury and high-end fittings. Instead, ensure that the project has good connectivity with rail and roads and provides all necessary amenities.

When buying a house or a part of a project, do all calculations. Each year, the cost of these services will increase. You will need to live off your savings, so don’t spend too much on a project that you cannot afford.

There are three ways to purchase a retirement home

Senior housing projects are designed to meet the needs of seniors. You can choose any one of the three available financial models.

Outright Sale

Tata Group and Ashiana Housing offer these senior citizen homes. This is similar to a regular sale. Flats/villas are sold to seniors over the age of 55 or 50 on a per-square-foot basis. Professionally qualified people maintain the entire project. These services are available on a monthly basis.

These residents can’t live with their children. They are allowed to stay for a limited time. You can also purchase a unit for your son or daughter if you are younger than 50. However, only senior citizens are allowed to remain permanently in the society.

Deposit Model/Payback Programs

Based on the size of your unit, an upfront deposit of 60-70 per cent of the sale price of the unit will be charged. This does not include residential charges. For food, electricity, and water, charges will be at the actual rate. With some deductions for cancellation/administration charges, the deposit is given back to your successor.

Lifetime Lease

On the day the unit is handed over to the customer, the administration will charge a small deposit. For the duration of the stay, there will be a recurring monthly rent. This includes electricity, water and rent. The rest of the facility fees (food, security, and social engagements) are on actual consumption.This option has one benefit: the unitholder does not have to pay property taxes.

Enjoy life!

As a person ages, their physical and mental health gradually deteriorates. It can be very uplifting to live in a residential community where your neighbours are always in touch. Although they may not be considered family, the residents of a retirement community can provide seniors with the companionship and support they need. It enhances the quality of life by enabling people to get together and have fun.

Due to changing demographics, the migration of children for work, the breakdown of the joint family system and difficulties in managing oneself in cities, there is a growing demand for assisted living facilities.

There was once a stigma associated with abandoning parents in retirement homes. However, attitudes have evolved over the years. Although this idea is still in its infancy, it is no longer looked down upon.

Non-resident Indians (NRIs) account for a large portion of the demand for luxury retirement homes. Senior NRIs who have been used to high-end facilities in developed nations and are returning to their country of origin, or those whose children are NRIs, represent a significant market.

Is it a sound investment?

Are you able to make a smart decision about investing in a retirement home? These houses are purchased primarily by end-users to meet their personal residential needs. These houses should not be an investment tool. Instead of focusing on price appreciation, think about the benefits they will bring to you.

You know that investment returns are dependent on the demand and supply curve. Demand and supply will determine whether the house appreciates for you or your heirs. Even with rising demand, there is a limited supply of senior citizen housing. This will continue, and you could earn great returns. If supply decreases, however, returns might not be as good.

Banks do not finance retirement homes

One important thing is that banks generally do not finance them. Banks cannot sell these loans to people under 50 years of age if they are defaulters. Banks, therefore, do not finance retirement homes because of this restriction. Most Indians want to leave home to their children. You can transfer a retirement home to your children, but they won’t be able to live there until they reach the age of 50 or 55.

This is one reason why retirement homes are less popular than residential homes. The investment return on retirement homes is lower than that of normal residential homes. These projects are being developed by builders in the outskirts, as the land is cheaper. This helps to keep the price of these homes low.

Before you decide to rent, make sure that you have a chance to look at the options for a while. You might not like the lifestyle or be used to living in this type of setting. Renting may be a good option. This model is flexible and the most advantageous. You can also keep your capital and use it to generate cash flow. You have the right to leave if the service provider fails to deliver.

 Ashiana Utsav, Lavasa’s founder, has designed a unique concept called Trial Homes that allows you to experience the lifestyle of retirement homes. This allows potential customers to experience the lifestyle and atmosphere of Senior Citizen Homes before they decide to join permanently. A trial home is a furnished apartment of 2BHK that prospective buyers or visitors can use.

Consider your needs and decide on shifting.

The degree of attention and care that you require will also affect your choice. As you age, this will change. Many retirement homes are designed for those who are in good health. Some homes cater to people who can manage their tasks but require assistance with some chores. There is not much choice for those who need assistance with all activities. This stage may require full-time care, which can be very costly.

“What do you intend to do with your house?”

Another important question to answer is “What do you intend to do with your house?”. It could be in the same area as where the retirement home is located. You could be able to purchase a retirement apartment and continue living comfortably in it after you retire. This also means you won’t have any backup options. What if you don’t like living in a city you’ve lived in for 50-60+ years? What if your family and friends are missing you?

People who have saved their entire life to buy retirement homes may still live in their homes. The person may have two assets but not enough cash. The house may be worth 10 million dollars on the market. However, he won’t have enough money to pay his medical bills or buy groceries. A reverse mortgage might be a good choice. The problem is that a retirement home may not be as liquid as other real property options.

Because the buyer’s income is declining after retirement, banks and housing finance companies may not lend loans. The decision to move or buy a retirement home cannot be taken lightly. It would be wise if you did not. Weigh all the benefits and consequences before making a decision.