I have been to these meetings before like around 16 yar ago and 8 yar ago and also today. When is a person old? It reminds me of the committee at Boca Del Vista, all wearing floral shirts and arguing the ramifications of increasing the cost of scones. The short history of Retirement Villages (RT) goes back to the 1990s. These villages were born out of the baby boomers starting to hit retirement age and needing somewhere to downsize. The contracts at the start offered low priced entry into the village lifestyle scene with the RT company taking a large part of its profit at the end or at the exit from the village. Hence the eight year holding rule whereby the money from the sale of the unit is held for the company's use for eight years after exit and then paid in full. Most exiting families take a hit in order to receive most of the sale proceeds immediately. A formula is used to work out an amount perhaps around 10% of the sale price which will be deducted. There are two other cost factors in selling the unit. The costs of refurbishment to an as new updated standard for resale and the costs, capped at 1% of the value, for sales advertising. These are the three amounts to be deducted from the final amount on settlement day. A rough example would be for the sale of a $500,000 unit subtract $50,000 to compensate for the 8 year rule, subtract another $45,000 to bring the unit back to as new and another $5,000 for advertising. That will leave you with $400,000 in the pocket.
PS If you can be bothered, the two areas to save on these costs are endeavouring to bring the unit to as new with your own labour force and waiting out the 8 years after it is sold. The less complex for us is to pay those amounts and pocket the rest. The company is generally never happy with outside contractors trying to do stuff to the units on the cheap. It adds complications to the resale timeline.
 |
These are the guys that bought three Stockland Villages
|