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We are surprised by the response of a recent article regarding quality retirement homes with full facilities based on the American model of retirement homes.
In our article we referred that this type of housing may take a period of 15-20 years to come about for locals in Cyprus, since the family ties are not what they used to be, and parents/children may not have time for each other to the extent that they had before.
However, based on the local readers response it seems that our estimate of 15-20 years time, is far too late and it appears to be more of an immediate 2-5 year term. Families seem to be disintegrating faster than we thought, especially now during the financial crisis and changing attitudes.
From what that we know there are certain parameters for the success for such projects which we enumerate below.
- Compact and fully furnished units of high quality, in complexes of not less than 30 units with facilities to include gardens, a heated pool (one level maximum 1.30m depth), common room(s), a bar/snack bar, snooker room, card playing, grass bowls etc.
· Units to have large door opening for wheel chairs where required, ground floor preferably, but provision for lifts should be an option. Units to be of one or two bedroom (2 bathrooms) large enough to accommodate where required live-in service personnel of the tenant.
· 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) subject to conditions.
· 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.
If the tenant wishes to terminate the lease (or dies) they can sell the remainder of the lease to someone else.
· Considering a furnished 2 bed unit in a well-run complex has a sales price of approximately €150,000 + furniture etc say €160,000 a lease for say 20 years with an upfront rent of €100,000 is equivalent of €8,000 p.a. for 20 years, plus running cost of approximately €500 p.m. This makes good financial sense. No transfer fees, no VAT, no property taxes etc.
· This is not an old people’s home where the prevailing establishments being of a very low quality and with no/limited facilities, but it is suitable even for much younger people (not younger than 50 we would say and with exclusion of children) who are either on their own and others who seek a companionship and new friendships.
This approach is not directly related to time sharing, since we are talking of single ownership and at a cost of less than one third of the freehold alternative.
The article brought up a lot of interest by the “older” generation mainly around 60-70 years old with whole families wishing to participate (e.g. 4 brothers over 65 with their wives thought it was a good idea).
This family informed us over the phone mind you that “we can sell our homes for at least €300,000 each and out of this we will buy a 30-year for €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 just about all business are short of cash, this could be of an appeal to investors/hotel operators of tourist villages/ hotel apartments (we have eyed 2 tourist villages on the beach at Paphos for the purpose to put the idea into practice).
As we say in Cyprus, “a Cypriot eats too much as if it is his last time alive and builds a home as if he will live forever”.
Leasing in such projects is an alternative.
