Are you looking to invest in a retirement village? Did you know the best paying tenants are aged 50 years and older? This statistic comes from the rental collection platform, PayProp, which controls the majority of residential rentals in South Africa. It processes monthly rental receipts for more than 95,000 properties nationwide.
Add the very high demand and limited supply of retirement villages to teh mix and you have one of the best and least risky options for investors.
But with only a few retirement villages allowing full ownership and investors across age groups to buy into property, finding these investment gems is not always easy. When you do find a retirement village that allows anyone from the age of 18 to buy a unit and rent it to tenants aged 50 years and older, it's one of the best property investments you can make.
“There is an insatiable demand for secure, well managed retirement villages offering full ownership and on-site frail-care facilities – guaranteed to be operational from phase one,” says Gerrit Brandow, the Director of Central Developments which has a retirement portfolio of 11 developments that comprise of over 4 600 units. “Our retirement estates offer all these benefits as well as a lifestyle centre with a number of amenities such as a dining room, recreation hall for social activities, a hair and beauty salon, doctors’ consulting rooms, a library and much more. These retirement estates are also expertly managed. They have quality finishes, green architecture, fast fibre internet connectivity and state-of-the-art security solutions. This makes our offering the best in the market. They are very attractive to investors who benefit from a strong yield on rental income and continued capital growth.”
According to PayProp’s stats, about 39% of 50+ tenants rent for between R7 500 and R15 000+ per month. Celebration Retirement Village, opposite Northgate Shopping Centre in Johannesburg, features units priced from R810 000, putting rentals in this price bracket which could offer investors returns of up to 20% per annum from the first year.
This is really significant when you consider that, as a whole, the South African property market is growing at a nominal rate, excluding inflation, of 4% year-on-year. First National Bank household and property sector strategist, John Loos, reported that in Q2 of 2017 the Johannesburg housing market was growing at a nominal rate of 3.2% year-on-year – or at -1.8% in real terms.
“The above average credit scores, debt levels and debt-to-income ratio of people over 50 – means they're better with debt management than younger generations. They pay on time, are less reliant on short-term loans and have fewer credit judgements against their name.” says Johette Smuts, head of data and analytics at PayProp.
Serious investors of all ages, who are either just starting out their portfolio or would like to diversify their portfolios, would therefor do well to consider buying into a well-planned and well managed retirement village, such as Celebration Retirement Estate. Due to the high demand and limited supply of this calibre of retirement property – clearly evident in the 100 units already sold at Celebration within the first 14 days – the units also resell three times faster than other residential property.
“Investors of any age can invest in Celebration Retirement Estate,” says Gerrit Brandow. “Many return investors have faith in our developments because they have already profited from their previous investments in our products.”
Why Celebration Retirement Village is a serious investment of choice:
- Proven capital growth of up to 12% per annum
- It is a niche product aimed at a very niche market where high demand and limited supply exists
- Achievable returns on investment of on average 12% and up to 20% per annum
- Assistance with rental management is available
- Affordable levies
- Invest now and occupy when you are ready to retire
- It is property with purpose that can be used for generations to come