Buying a retirement property

My mother-in-law has (about 5 years ago)moved to be closer to us. The retirement properties in her new area are all "expensive" and "desirable" - some are old buildings which have been beautifully converted. Quite a few have small patio type gardens. She decided to move to a house instead and is very happy there so although I admit I would have liked the "on call 24 hours a day" security of the retirement units it was probably right for her to move into a house... somewhere arguably too big and with a big garden!

I think if you are happy and safe in your retirement home that is the most impotant thing.

I love my mother-in-law and if she had used up all her savings and all her equity in a retirement property that wokld have been fine. Being happy and comfortable... that's OK by me.
I'm sure most daughters and sons will feel like this?

There is a damming article in the Times to-day about McCartney Stone retirement home loosing so much value that they sell for less than half price sometimes. They are to be avoided as they also have standing charges which mount up .

I would love to move into a retirement apartment I can afford to buy but it is the maintenance and ground rent payments that are stopping me . Most I've looked at ask around £3500 upwards for maintenance and £600 upwards ground rent , some much more . So whatever savings I would have would have to pay this for the rest of my life . Also they rise each year . What happens when I can no longer pay these huge bills , God forbid I live into really old age I will have nothing in the bank . So I'm staying in my little house .

Retirement properties are a nightmare avoid them like the plague, if your brother cannot finance his own accommodation either leave li to the LA to find a place, OR build an Annex on your house OR buy a freehold property for him.

Unless the LA house him it’s going to cost a lot.

Buy if he does have the money and really wants to do it it could be a good option for him, David. If he has "enough" for his needs I don't see the problem.

Does it really matter if he spends most of it?

Allalongagatha

It depends if he wants to leave any money behind after he dies. I would buy if I did not want anyone to inherit. He won’t have any of the problems involved the sale of the property and could live a really comfortable life. Treat it like it is a luxury car. Enjoy all the benefits and expect no resale value.

You could save yourself the hassle by persuading him to leave it to charity.

One word of warning, is that the management fees increase dramatically each year.

Management fees also continue to be due until flat is finally sold!

The retirement flats up the road from us sell at around £99,000 for a one bed but the charges are around £10,000 a year. They do have in house medical care if required.
The retirement flats my mum was in years ago was taken over by the tenants and of course the charges went down but they refused to have a proper sinking fund and we worried about what would happen when the lifts needed attention. Mum was happy for the first years but later the huge mix of ages caused problems.
I would try and downsize to a small property if possible

Cossy

Allalongagatha

It depends if he wants to leave any money behind after he dies. I would buy if I did not want anyone to inherit. He won’t have any of the problems involved the sale of the property and could live a really comfortable life. Treat it like it is a luxury car. Enjoy all the benefits and expect no resale value.

You could save yourself the hassle by persuading him to leave it to charity.

One word of warning, is that the management fees increase dramatically each year.

Management fees also continue to be due until flat is finally sold!

Yes, thats right. These companies do not care if the owner has died, they still want their money!

Anyone else read the article in the Times on Friday?
I think it is something to think very hard about.
If that’s the lifestyle that will suit you and you have the money to fund the management fees (including the inevitable annual increases) then go for it.
Just don’t expect the value of your purchase to go up, it is likely to head the other way and could be difficult to sell.
Not your problem if you are dead but give some thought to those you may leave a poisoned chalice to.
My close relative is going through this at the moment, it’s taken 2years, the management charges have to be met ( to be paid after the flat is sold) To be fair it could have been sold much more quickly if one of the beneficiaries would have accepted that they would have to reduce the price. It has caused a lot of heartache.

Surely the beneficiaries have nothing to do with the price assets are sold at, only the executors - or is this beneficiary a charity?

I understand they always make sure they get their pound of flesh and a sliver more if they can, which is why, in my will, I have left money charity but not named any specific one, leaving the choice to the executors.