A closer look at buy-to-rent, life rights and sectional title purchases
The escalating costs associated with freestanding homes, security concerns and desire for a lock-up-and-go lifestyle have seen an increase in the popularity of modern retirement estates countrywide, with KwaZulu-Natal fast becoming the most sought-after location for retirees seeking an all-year holiday experience.
One such estate is Renishaw Hills, a mature lifestyle village within the Mpambanyoni Conservation Development near Scottburgh, just 40 minutes from Durban, boasting coastal and forest views, quality facilities, 24-hour security, transport services and home-based healthcare.
“While the choice of purchase method is important, it’s far more important to do one’s homework when selecting a development,” says Phil Barker, managing director of Renishaw Property Developments. “The homes and facilities must be of high-quality construction, the estate must be well-secured, there must be the provision of affordable healthcare options and amenities to promote a community spirit.”
Barker outlined the three main types of purchase methods – buy-to-rent (buy as an investment), life rights and sectional title.
Popular with the affluent under-50s, the buy-to-rent model hinges on identifying a quality development in the planning stage, and purchasing with a 10-year view. While there is not necessarily a big return on investment short-term, the capital gains can be quite substantial.
Sectional title is the standard model whereby the purchaser accrues capital gains but the developer has no obligation to remain invested in the sale. A popular version is the Reversionary Transfer Obligation (RTO) sectional title model, where the investor is offered a significant discount upfront but the developer is given first option to buy the unit back at the original price.
Then there’s life rights, an increasingly attractive option to many retirees as it provides a reasonable entry point price with similar benefits to a sectional title estate. The purchaser never has full ownership, but does purchase with a right to occupy for life.
“Although not a retirement estate, Balize Private Estate has been a popular option for those looking to downsize and live in a like-minded community,” says Butch James, Sales Director of Balize Private Estate. “Many buyers are not ready to move into a retirement estate, but they’re finding the home too large for two people. Within walking distance to the beach and only 10 minutes to the airport, Balize is ideally situated and offers several family-friendly facilities.”
Camelot Retirement Village – a sectional title model – is a boutique retirement village. “We are seeing children already living in Camelot buying on behalf of their parents, as well as buyers who want to experience the Hillcrest lifestyle, close to friends and family,” says Wicus Jacobs, Director of Carmel Properties. “TAFTA Premium Care provides residents with wellness management, frailcare bed assistance, and a clinic for basic care.”
Olivia Jones Communicationsproperty, retirement