People will be able to secure their future retirement housing plans without needing to sell their family home during the COVID-19 crisis, as part of innovative new options which have been released to the market.
Leading land lease community operator Ingenia and a southern NSW property developer have released new schemes to allow Australians to invest in homes, collect guaranteed rental payments, and then move in later.
The schemes have the potential to help older Australians who have been hit by a weaker property and job market as a result of the COVID-19 crisis.
This is because it is possible to participate in the schemes without selling your family home, and at the same time collect guaranteed rental payments to offset a lack of regular income.
More details are below:
Ingenia display home offer
For the first time, Ingenia has outlined a ‘display home leaseback’ offer across its portfolio, allowing consumers to buy display homes and then receive a guaranteed rental payment for around two years.
At the end of this period, the buyer can either sell the property, or decide to move in.
Ingenia is advertising a six per cent net yield payable for all homes that settle on or prior to 28 August 2020. See an example of a leaseback home here.
An Ingenia spokeswoman said the display homes would not be rented out, but in fact used by Ingenia to present to prospective buyers.
“Our display homes are used to showcase the quality and workmanship of builders and provide inspiration for buyers on what their home could look like,” an Ingenia spokeswoman said.
“Buyers can purchase with the knowledge that the homes will be kept in pristine condition as they are not rented to residents.”
The Ingenia spokeswoman said it was expected that most buyers would access the equity in their home along with cash to make the purchase (Lenders typically do not provide finance on land lease homes).
“Buyers who plan to live in the home at the end of the lease back agreement have time to prepare the sale of their own home and get their finances and lives in order to prepare for retirement,” the spokeswoman said.
Summerfield “Invest+Retire” offer
Meanwhile, the developer of the Summerfield over 55s housing estate in the historic southern NSW town of Braidwood has offered a new option aimed at people seeking a ‘transition to retirement’ plan.
As part of Summerfield’s “Invest+Retire” offer, investors can buy one of the estate’s newly-constructed three bedroom villas, and then rent the villas out (with a four per cent per annum rental underwrite provided by the developer).
The buyer can then move into, or sell, the home at a later date.
Summerfield has been approved under NSW’s seniors housing laws, which means the homes are on freehold title but there is a condition on the title which states they must be occupied by at least one person who is aged 55 and over, or disabled.
This means the Summerfield estate is ideally suited for people looking to retire to the country.
According to Summerfield’s Tim Wright, his new offering was targeted at people who were still working but wanted to secure their retirement plans during these current uncertain times.
He said he expected many people to make purchases using a deposit - including from a self-managed super fund - along with raising finance secured by the home’s freehold title.
“This offer is good for people who are not entirely sure what the future holds, but want to get a stake in the ground so they can one day enjoy the beautiful country atmosphere and environment which Braidwood offers,” he said.
“I suspect many people will be able to take part in this offer without having to sell their family home, and also take advantage of record low interest rates. It is also tax-effective for them to use their existing self-managed super fund.”
The Heritage Trust listed town of Braidwood is an hour from Canberra, three hours from Sydney and just under an hour from Batemans Bay and the NSW South Coast.
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