PLANNING TO RETIRE? THE ADVANTAGES OF SECTIONAL TITLE
in the retirement sphere, opposed to liferight
Living in close proximity to your neighbours and in a more communal environment is perceived by many to be more secure. Added to this, most sectional title developments have excellent security around the perimeter and at the entrance of the development.
With regards to freehold properties on the other hand, owners are entirely responsible for their own security. They need to pay to secure their own perimeter, and often for an armed response security company to patrol their area.
A fixed monthly cost
Unlike freehold properties, where the owners have to pay for their own home insurance and for the upkeep of the pavement, garden and exterior of their homes, owners of sectional title units pay a monthly levy instead. The levy includes the following costs – insurance premiums, maintenance of the common property, wages and salaries of cleaners, security and other staff involved in maintaining the common property, as well as any water and electricity required for the common property.
As a result, owners of sectional title units only need to pay for their rates and taxes, the unit’s insurance, the contents of their home, their own private gardens and for their monthly electricity and water consumption. The cost of maintaining pools, tennis courts, communal park areas and clubhouses in the development is shared, which contrasts with freehold property, where the owner is responsible for all costs.
Affordability and communal living
Generally speaking, a sectional title unit within a complex is more affordable than a freehold house. Also, on average, communities living in sectional title schemes boast close-knit communities and far greater interaction with their neighbours when compared to freehold neighbourhoods.
Sectional Title allows for a significant growth on your investment
If you’re buying now to retire later, you can rent out your property to an over 50’s tenant. This gives you an opportunity to plan in advance for retirement and to buy at today’s prices, it allows for your tenant to pay for a siginifcant portion of your retirement property investment.
It will also provide significant investment returns in the process.
It is really important that buyers understand the distinct difference between life rights and full ownership and its impact on their capital investment. A life rights option can never be regarded as a property investment as there is no ownership of an asset that can grow in value.
One can bequeath the property to any family or beneficiary in your will
With full ownership you own your property in the retirement development, as well as an undivided share in the common property (since it is in a sectional title scheme). You therefore reap the full benefits of the capital growth and you will be able to bequeath it to your loved ones. The investment property can become an intergenerational retirement asset.
Sectional Title allow one to rent out the property until such time that you are ready to move into the property yourself
This allow you to secure your future retirement, today. Your rental income help to pay for your retirement property.
Sectional Title schemes protect you from the rising cost of retirement property
If you invest in your retirement property today you will secure your future retirement needs at today’s values. It will protect you from the impact of rising costs of purchasing a retirement property in the future.
Anton Malherbe, Sales Direvtor at Harbour Bay Village