The best investment bang for your retirement buck


Post by: Eastlands Estate, 04 Feb 2016

The recent changes to the legislation governing retirement funds mean that many imminent retirees could soon be sitting with lump sum amounts and wondering where best to put these funds. South African property remains a solid investment, with next-generation mature lifestyle estates offering one of the best investment options right now for those nearing retirement.

Francois Rust, financial manager at Eastlands Properties in Benoni, says affordable housing in the local retirement sector is hard to come
by. This is particularly true of homes contained within the new up-and-coming mature lifestyle estates that also provide access to sought-after health, wellness and care facilities.

“The recent retirement legislative amendments stipulate that retirement funds with a balance of R247 500 or less on retirement can be taken as lump sum amounts.” An excellent investment for people finding themselves with such lump sums is property. But not just any property, specifically the new-concept mature lifestyle estates that combine independent and assisted living facilities with extensive health, wellness and care facilities.

“These up-and-coming developments are in hot demand in South Africa, and provide imminent retirees with good long-term capital growth prospects, sound buy-to-rent options for those who still want an income-generating investment, and excellent housing options for one day when they’re ready to downscale and pursue secure retirement living. With the growing waiting lists for estates like this, now is a good time to consider using lump sum payouts as deposits for these retirement units,” he explains.

Eastlands Mature Lifestyle Estate is one of the few developments of its kind in Gauteng. It taps into the fast growing international trend of
providing secure, up market estate living for self-sufficient over 50s through its strong focus on active ageing, healthy living and physical
wellbeing.

“The Eastlands concept is based on current global research that shows today’s over 50s are active, enjoy increased longevity, are still employed, want to be sociable and are young at heart. There is a massive movement overseas towards overhauling the traditional retirement village model, and creating vibrant spaces that support these ‘younger’ older members of our communities through on-site facilities dedicated to active living, lifelong learning and social interaction,” Francois adds.

Although Eastlands is primarily geared towards these go-getters, it also caters to the future health and care needs of residents. Professional homecare services for personalised care in the comfort of their own home, and specialised healthcare facilities at its 24-hour frail care centre are all provided on site for use by residents as and when they need them.

Another key aspect that sets Eastlands apart and that further enhances its investment value, is that it is a sectional title development offering buyers full property ownership, not merely life rights.m Many traditional retirement villages only offer life rights, which essentially means the developer retains ownership of the housing units and residents only ‘buy’ the unit for the duration of the time that they are alive. Once the ‘buyer’ passes away, full use of the unit reverts back to the developer.

Although life rights units are more affordable upfront than sectional title units, they have no investment or capital growth potential. 

“From a property investment perspective, according to data released from a 2015 TPN FNB Property Barometer survey, when gross yields are estimated by title deed and number of rooms, sectional title properties appear to be outperforming full title properties. There is also a strong trend towards smaller units, with one-bedroom sectional title units topping the table with a 9.53% yield, followed by two-bed sectional title units with 9.28% and two-bed+ sectional title units with 8.92%,” Francois concludes.

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