Sectional title still an excellent retirement property investment option
Post by: Eastlands Estate, 07 Apr 2016
With the economic downturn forcing many people to downscale, the spotlight is once again on retirement sectional title and life rights properties – what’s the difference between the two and which offers the better return on investment?
A sectional title property is located within a complex or estate, and the purchaser retains full ownership of the unit or property once it has been bought (title deeds are registered in the purchaser’s name) until they choose to sell it again. All responsibility for the property, including maintenance, rests with the individual owner.
With a life rights property the buyer only purchases the right to occupy the unit or property for the rest of their life. They don’t own the unit (it remains the legal property and the responsibility of the complex or estate developer) and when they pass away, the developer is legally entitled to ‘sell’ the property to another life rights buyer.
Many people argue life rights property purchases are the more cost-effective option.
It’s true, while both property options require you to have an upfront lump sum amount, life rights purchases are generally cheaper than sectional title units, and there are no monthly maintenance costs to worry about.
However, life rights properties do not promise any return on investment. They have no investment or capital growth potential, and essentially just guarantee the buyer’s (and their spouse’s) lifetime rental of the property.
A sectional title retirement property is an attractive investment option as these properties are always in demand by buyers (and increasingly so today), favourably appreciate, and – depending on the nature of the property and the status of the market at the time – can deliver significant returns.
As a sectional title development, Eastlands Mature Lifestyle Estate offers sound retirement property investments.
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