There’s a lot to love about moving to a retirement village. And anyone who’s moved into a village will tell you that while costs seem higher on the surface, it often works out as better value than living in your own home. There are a few different costs to consider when choosing your village and it’s important you understand what they are and whether retirement village living will work for you:
• Ongoing weekly costs
• Buying into the village and the deferred management fee (DMF)
Base weekly fee
Think about this as your maintenance and entertainment fund; it’s a weekly fee that covers the daily running of your village. It keeps the pool in top shape, the grounds looking gorgeous, and the fun activities flowing. It also covers exterior maintenance on your home, including cleaning your windows inside and out. So, if your gutters back up or a ball goes through your window, you can sit back and let someone else take care of it.
What you should do:
• Compare the base weekly fee between your shortlist of villages
• Read the fine print
• Check whether the weekly fee is fixed or if it could increase. If you’re on a fixed income, increases may be hard to meet.
• Check what your fee actually covers: most villages will cover the basics of grounds and building maintenance. A Ryman village will include extras like window cleaning, activities, morning and afternoon tea and outings.
• Ensure that the weekly fee and the deferred management fee will stop on the day you permanently vacate your apartment or townhouse.
The Ryman difference is that we offer a fixed base weekly fee for the entire time you occupy your townhouse or apartment – so unless you change from independent living to a serviced apartment or you add extra care options, what you pay per week when you move in, is what you’ll always pay.
Buying into the village and deferred management fee (DMF)
Most retirement villages will use a right-to-occupy model. This means the price you pay buys you the right to occupy the townhouse or apartment for life, with access to community amenities.
When you permanently vacate the village, your apartment or townhouse is on-sold and the village retains an agreed deferred management fee, also known as an exit fee or departure fee. At Ryman villages our standard deferred management fee is capped at 20% of the occupancy advance (or entry payment). The balance is then repaid to you or your family.
Every village will approach this transaction differently and it can significantly impact how much you end up paying when you leave. There are a few things to consider:
• What is the deferred management fee capped at?
This varies between village providers, but is usually capped between 25% to 35% of the entry payment. Ryman’s standard deferred management fee is capped at 20% overall - one of the lowest in the retirement sector.
• Are there extra costs for selling your home?
Many villages will charge to refurbish your home or to cover the sales process (on top of the deferred management fee). At Ryman villages, that’s all covered by the deferred management fee.
• What happens if the sale of your apartment or townhouse is delayed?
When you leave a retirement village, many providers won’t repay your entry payment until your home is on-sold. Some will keep charging you the ongoing weekly fee (and continue calculating your deferred management fee) until your home is sold. So, it’s important to ask how long the average sale takes.
At Ryman, the base weekly fee and deferred management fee will stop on the day you permanently vacate your dwelling. No one in Ryman’s over 35-year history has waited longer than six months to be repaid.
Get educated: here’s your homework
There are lot of great reasons to choose a retirement village lifestyle, but if you do your homework you’ll find where you can get the best value for money:
• Ask questions about ongoing fees and what they include.
• Read all the fine print.
• Ask whether the deferred management fee (exit fee) is capped.
• Find out how the deferred management fee is calculated.
• Ask if there are extra costs around selling your village home.
• Find out what happens if the sale of your village dwelling is delayed.
Thinking about retirement village living? Learn more about Ryman villages.