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By Antonis Loizou F.R.I.C.S. – Antonis Loizou & Associates Ltd – Real Estate Valuers & Estate Agents
I am surprised by the response to an article I wrote in the Greek press regarding quality retirement homes with full facilities based on the American model. In my article I said that this type of housing units may take 10-15 years to come about for locals in
However, based on the local reader’s response it seems that our estimate of 10-15 years time is far too late and it appears to be more of an immediate 2-5 years term. Family ties seem to be disintegrating especially now during the crisis.
From what I know there are certain parameters for the success for such projects which are listed below.
- Compact and fully furnished units of high quality, in complexes of not less than 30 units facilities to include gardens, a heated pool (one level maximum 1.30 m. depth), common room(s), a bar/snack bar, snooker room, card playing, grass ball, etc.
· Units to have a large door opening for wheelchairs where required, ground floor preferably, but provision for lifts could be an option. Units to be of one or two bedroom (2 bathrooms), large enough to accommodate living-in service personnel of the tenant, where required.
· Doctors, taxis, grocery facilities to be offered (on line) for payment and use of private cars allowed.
· Fully gated and managed, including lets during vacant periods (if tenant so wishes) with restrictions.
· The units are not to be sold freehold (not necessary) but leasehold and the lease period to relate to the life expectancy that the tenant estimates (on average for men 79 years old and women 83 years – plus five years to be on the safe side).
If the tenant wishes to terminate the lease (or he/she dies) they can sell the remainder of the lease to someone else, who will use the remaining period/or extend it.
· Considering a furnished 2 bed unit in a well run complex has a sales price of approximately EUR 150,000 + furniture, etc., say 160,000, a lease for 20 years with an upfront rent of EUR 100,000 is equivalent to EUR 8,000 p.a. for 20 years, plus running cost of approximately EUR 500 p.m., plus common expenses. This makes good financial sense. No transfer fees, no VAT, no property taxes, etc.
· This is not an old people’s home with the prevailing establishments being of a very low quality and with no/limited facilities, but it is suitable even for much younger people who are either on their own and others who seek a companionship and new friendships when nearing life’s end.
This approach is not directly related to time sharing, since we are talking of single ownership and at a cost of less than 1/3rd of the freehold alternative.
As I wrote, the article raised a lot of interest by the older generation mainly around 60-70 years old with whole families wishing to participate (e.g. four brothers over 65 with their wives thought it was a good idea). This family informed me over the phone that “we can sell our homes for at least EUR 300,000 each and out of this we will buy a 30 years old lease for EUR 180,000 and we will be left with spare cash to do what we like”.
Obviously, it needs a lot of detailed financial work, but at this point of time when many people are short of cash, this could be appealing to investors/hotel operators for touristic villages/ hotel apartments (I have eyed two tourist villages on the beach at Paphos for the purpose to place the idea in practice).
As we say in
