When you close in on your retirement, you are bound to be faced with countless decisions that need to be dealt with in a short period of time. Among all of these decisions, the one that is often considered to be the most important is housing.
The thought of changing your address and turning your world upside down when you retire can be a scary scenario; especially because as we get older, it’s only natural to be put off by any sort of change.
Among a long list of housing options, one preference that is becoming increasingly popular within Ontario (especially over the last few years) is a Life Lease Plan. CMHC reports that there are more than 45 Life Lease projects across Canada as well as many successful projects in the United States and Great Britain. Since this is a relatively new option, we thought it be best to compare this option to owning or renting, and show you some of the advantages that a Life Lease Plan can offer residents’.
Here it is:
The entire facility is geared towards seniors
Unlike traditional condos, Life Lease developments tend to have common areas that are geared specifically towards their senior residents. For example, Uptown Waterloo has a private dining/meeting room (which can conveniently be used for when family and friends are visiting), a slew of gathering spaces, private guest suites, and much more. Amenities such as these can provide residents with countless social and recreational benefits. On top of that, each unit in a Life Lease residence is generally designed with seniors and older adults in mind; for example, units are laid out in a way that can accommodate growing mobility issues, etc.
You can build equity and can enjoy financial flexibility
As the resident of a Life Lease Plan, you are simply purchasing the Right to occupy the housing unit. At any point in time, if you wish to sell the unit, you can transfer this right back to another qualifying purchaser. You will receive the market value of the suite less a transfer and administrative fee. In a nutshell: purchasers are able to protect their investment and earn a return similar to the equity growth in their home or condominium. How great is that?
Your cash flow will be greater
If you choose a Life Lease plan instead of purchasing a home, you don’t have to worry about a conventional mortgage, land transfer tax, etc. For each resident, all you need is your down payment and money for your monthly fees (which is explained in further detail below). As a result, you can keep the bulk of your financial savings and use it for personal use, including travel, other financial investments, etc.
Monthly costs are kept to a minimum
Are you tired of paying those pesky condo fees that seem to be rising year after year? With a Life Lease plan, residents are only required to pay a low Monthly Occupancy Fee, which covers the costs of building maintenance, insurance, management, and lifestyle services. Usually the monthly occupancy fee is between $150 and $250; the final amount depends on the size of your unit, the type of project and the type of common area facilities that exist within the building.
Like any decision, it’s important to weigh all of the pros and cons. And when it’s time to look at all available housing options, it’s also a good idea to sit down with immediate members of your family and access the situation together. Good luck!