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Tips to buy property for post-retirement years

Tips to buy property for post-retirement years

Houses in senior citizen communities are designed to offer comfortable living and companionship to residents in their sunset years.

With growing wealth, longer lifespans and fast-changing mindsets, senior citizens are becoming self-dependent, living an active post-retirement life and taking time to indulge in hobbies and passions. It's that time of their life when they can leave the fast-paced city life to live a quiet life in a serene neighbourhood.

That's when retirement housing projects appear on the horizon.

Emerging Trend
"The concept of retirement residential properties has been borrowed from the US and Australian markets where it is quite popular," says Ankur Gupta, joint managing director, Ashiana Housing, a Delhi-based developer, which has housing projects for the retired.

"The fast collapse of India's traditional family support system has given rise to an increased number of nuclear families in the country. In India, more than 60% households are nuclear and 8.94% of the population is 60-plus, indicating that the aged are in greater need of support than ever," says Saumyajit Roy, vice president, social infrastructure practice, Jones Lang LaSalle India.

"Housing for senior citizens is still a fairly new concept in India, and it is only in the last five-six years that developers have been actively focusing on building senior citizen-specific projects," Roy adds.

Young buyers can invest in retirement residential projects, but only senior citizens are allowed to live in these homes.
Developers who have forayed into projects for senior citizens include Ashiana Housing, Paranjape Schemes and Brigade Group. Several local developers and charity groups are also actively focusing on this niche market.

Community Living
Retirement housing properties are designed and maintained with focus on special requirements of senior citizens who need care and assistance with growing age. These are provided with grab rails, anti-skid tiles, passage ways for wheelchairs, among other features, which make life easier for the elderly.

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They also offer secured campuses, emergency response systems and maintenance and house-keeping services. Of course, you have to bear a recurring cost for maintenance and other services available on the campus.

"Retirement homes offer a multitude of facilities to their occupants. The residents no longer have to worry about minute details of daily household errands, paying bills, security issues and timely medical treatment. Rather, they can opt for an active lifestyle and utilise their time in recreational activities, suitable companionship and social work," says JLL's Roy. "There are arrangements for prompt response to medical emergencies by way of doctors, ambulances and tie-ups with nearby hospitals. Some projects also offer continuing care units for their ailing residents."

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"Several researches have shown that the life expectancy of senior citizens goes down if they have an inactive lifestyle. In retirement housing projects, they get to lead a more active life with the community," says Ashiana Housing's Gupta.

Recreational and hobby clubs, lounges, dining halls and other community places are an important part of retirement housing projects, allowing the residents to lead an active life.

Spotting Properties
When buying a property for post-retirement life, the main factors which influence the choice include proximity with ancestral and current properties, climate, infrastructure and healthcare facilities. For young buyers, the appreciation potential of the property is also important "Retirement residential houses are usually second homes purchased during younger years for use after retirement," says JLL's Roy.

Apart from metropolitan cities, places like Pune, Bangalore, Chennai, Kochi and Goa are preferred choices for retirement housing properties. Hill stations and pilgrimage centres like Coorg, Haridwar, Rishikesh and Vrindavan are also popular among senior citizens.

Ashiana Housing has projects in Bhiwadi, near Delhi, Jaipur and Lavasa. Paranjape Schemes has Athashri residential housing properties in Pune and Bangalore. The company also plans to launch projects in Hyderabad, Mumbai and Chennai. LIC Housing Finance has completed projects in Bangalore and Bhubaneswar.

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Senior citizen residential projects offer independent villas as well as apartments of different sizes in a wide price range. The properties which are located in non-metros are relatively cheaper. For instance, Ashiana Housing's retirement apartments in Jaipur can be bought for around Rs 1,600 per square foot.

As retirement housing projects cater to a niche market, there are restrictions on who can buy and live in these communities. Some developers allow young buyers to purchase their properties, but only people above a certain age (55 years in most cases) are allowed to live in them. Some developers sell these properties only to senior citizens or young buyers with a co-owner who is above 55 years of age. There are restrictions on resale of these properties as well.

Niche Investment
Apart from securing a peaceful home for later years of one's life, retirement residential properties can be a good investment option for the young. The valuations of these properties have over the years grown in tandem with the broader real estate market, in some cases even more.

With increased life expectancy, growing population of senior citizens and the rise of nuclear families, the popularity of assisted living complexes is expected to grow. This leaves a lot of room for growth in demand and prices in this niche real estate market.

"Prices of houses in our Athashri retirement housing projects have appreciated 40% more than regular housing projects," says Shashank Paranjape, managing director, Paranjape Schemes.

Apart from the increase in valuations, these properties can also be used to generate an annual rental income equal to 3-5% of the property price. If you buy such a property from developers which also offer rent and leasing services, you will not have to worry about either finding tenants or maintenance and care of the property.

When you start living in your retirement house, you can also reverse mortgage it to a bank for generating a steady income flow.

"These properties are also good for reverse mortgage as these are managed professionally and lenders can get handsome returns when they put them on sale," says Paranjape.

Whether your are young or retired, if you are tempted by the idea of spending your sunset years in one of the retirement housing communities in your preferred destination, don't be afraid of exploring the options.

Senior citizens can also rent such properties for a short interval and experience the concept before taking the final call. Or, still better, just check in to one of the trial apartments offered by some developers and spend a few days before writing the cheque.