Own your retirement: why sectional title living is your best bet

The retirement years are a time of ease: your health and the pace of life are top priority and deciding where you should spend them should be stress free. 

Thanks to sectional title home living, you have the opportunity to stay on top the property ladder while building equity along the way. The life rights option, on the other hand, enables retirees to buy a home for the remainder of their life, without being responsible for its upkeep.

The life rights practice is widely recognised abroad and is a popular avenue for long-term tenancy for people who live in the US, Australia and New Zealand. It’s still not a preferred method in SA, however, with many questions about its benefits. The biggest uncertainty with this option is what happens with the purchaser’s estate once they have passed away.     

“Buying the life rights agreement is just as the name suggests: the buyer purchases the right to occupy a home within a purpose-built retirement development for as long as they live. But securing life rights doesn’t give retirees the financial legacy most people desire. Many clients wish to leave the property to their heirs at the prevailing market value,” says Pamela Naidu, director of sales and marketing at Devmco Realty.

Naidu is integrally involved in the Capri Village development designed for people over the age of 50. 

“With Capri Village, which recently launched its second phase [of development], many retirees dream of fulfilling hobbies, spending more time with loved ones, and simply taking the time to enjoy life to its fullest. When considering a property purchase in your later years, you need to think about what is best suited to your lifestyle and retirement plans. For couples or individuals who want to live in a community-centric development, many consider buying a sectional title residence or a life rights in a retirement home,” says Naidu.

"Both options are likely to come with similar amenities, ranging from healthcare services to sporting facilities and social clubs. The biggest difference and perhaps the most important, is the financial implications of choosing a sectional title purchase over a life rights.”

Buying a life rights option does have its benefits: it is more cost-effective as many developers fix some of the costs and levy hikes, and conveyancing costs and transfer duties aren’t applicable.

However, none of the buyer’s capital outlay goes towards investing in fixed property, nor is a life rights option considered an asset, so it will not appreciate in value. Contractually, once the buyer passes away, the developer takes ownership of the property once again and someone else will occupy it. Only after its subsequent sale following the death of the purchaser, the deceased's estate may receive a small portion of the initial investment. 

“Financial security is earned through years of hard work. It is a privilege to build equity and pass on a tangible asset to loved ones and dependents - especially one that is likely to grow in value due to location, desirability and market demand. With a life right, none of this is possible. We’re seeing many mature buyers investing in a lifelong home at Capri Village, even before they’re ready to live in it, and renting it until they decide to move in.

"This is another advantage of a sectional title property or free-hold ownership, and it’s just one example of the flexibility and financial independence it allows. For this reason and more, the demand at Capri Village has surpassed our expectations, showing a healthy and vibrant over-50s market. It offers buyers a lifestyle that stands out from other retirement options, all based on thorough research and a perceptive understanding of what mature adults want.” 

Capri Village offers both sectional title ownership and freehold ownership to accommodate buyers. Sectional title and freehold ownership have the flexibility to rent out the property and benefit from capital appreciation, which allows buyers to leave a legacy for their loved ones. Freehold ownership allows purchasers to custom design their dream home according to their preferences and create a forever home. Sectional title units take away the stress that is often incurred in construction. 

Achieving 40% in sales within the first few days of launch, it’s evident that Capri Village has answered the market’s demand for a product catering to the needs of over-50s. It offers residents independent living in step-free, pet-friendly homes with private gardens, discreet and professional medical services, state-of-the-art security and incredible estate facilities within Salta Sibaya on the north coast of KwaZulu-Natal. 

Stands and one-, two- and three-bedroom residences are available at Capri Village from R1.2m for land and from R2.7m for homes. Click here for more information or call 087-550-1300. 

This article was sponsored by Capri Village.