The concept of retirement homes
For many years, we have seen in America and then in Europe, the construction of retirement housing complexes on an organised basis, with the recent developments in Spain suggesting trends of a new concept, which might be of interest to Cypriot property developers and investors.
When someone refers to retirement homes, every Cypriot’s mind goes to the seedy image of most old peoples’ homes with low- to mid-income pensioners, which can only bring shame on us. Even though there are new units with high standards (at a cost of around EUR 1,500-2,000 / month per person), the concept of ‘retirement residences’ is another more upscale product that should target both Cypriots and foreign buyers and investors. These projects have their own high quality specifications and facilities for tenants. It is a ‘concept’ between wholly-owned and organised group with common management.
Generally, the ‘home cycle’ in Cyprus starts from the young couple that buys an apartment, then jumps to a house of 3-5 bedrooms, perhaps with swimming pool, etc.. When it reaches the age beyond 60 years and although the couple remains active, the house is too big and empty, while the cost of upkeep and maintenance work and the multiple levels of a house make it difficult to stay and enjoy living there. Families are no longer tied as it used to be years ago, children do not visit or pay special care to their parents and the number of friends dwindles, as driving too becomes difficult. Projects of retirement homes have active retirees who wanting to keep their own home, but they want this to reflect the living conditions of their age. In general these projects have the following specifications: • Organised group with 30-80 units mainly of one or two bedrooms.
• The units are single-level (ground floor) with garden or if it is on two levels, there should be a private elevator.
• The doors and elevators are wide enough to wheelchair access.
• The units are fully equipped kitchen), air conditioning, etc.
• The facilities should consist of the central building for the resident (bar, gaming room, billiards, darts, etc.), spa facilities and indoor pool, comfortable outdoor shallow pool (1.40 m deep), preferably heated, etc.
• All units must have modern security systems, with a direct connection to the internet and numerous television channels.
• Organised visits or regular link to the medical centre for the needs of the tenants, by private minibus or nearby public access.
These units are available in the form of long-term renting, the period of which depends on the age of purchasers and conditions of the project. Assuming that the lifetime is 82 years and the buyer is 60 years, then it is logical to rent for
(fitted 25 years. The buyer prepays this rent and if before the expiration of the rental would like to sell the lease, they can do so for the rest of the rental period to a third party, in consultation with the main property developer. Thus the original purchaser is not trapped there for life.
If the purchaser does not reside permanently (eg. foreigners) they could be allowed to rent the unit to third parties during the period of vacant periods.
Activities may include tennis courts, green bowling, laser shooting, etc., which are more suitable for such groups.
To avoid any confusion, I am talking about a “hotel complex” where each one uses the unit as the absolute owner, without restriction, but there is the owning organisation, administration and management. So each buyer can have his own car and all the amenities of any property with absolute ownership The advantages of such projects are: • The existence of mature persons who may still be active in work or not.
• The availability of cleaning, maintenance, management of common spaces. • The existence of camaraderie and fellowship. • The ability to use private assistance (live-in maids) in the unit of each purchaser in a relevant room.
• The independence from children and friends, as maybe the retirees may not wish continued contact with them and want their peace of mind.
• You are not obliged to buy the house, for example a 2bedroom apartment at the going market rate of EUR 250,000 for a period that exceeds the life expectancy, but the cost would then be around 180,000 for 30 years, for 20 years about 155,000 and for 15 years 130,000 - with the possibility of rental or resale.
• It is understood that in such organised projects the cost of management are maintenance charges are high and may exceed EUR 5,000 a year, but then this cost is not very high when considered as an additional cost of an absolute-owned property.
Ideal locations might be 3-5 km away from the coastal towns to sites that offer views and facilities with nearby villages offering shops, supermarkets, leisure centres, with the main concern being the comfort of the space and open areas.
An ideal development could be the recently sold Kermia Ayia Napa hotel that meets most standards, except, basically, the distance from the major towns and the dull winter periods.
In this period of low occupancy at hotels, buying or converting existing tourist villages could works, although not an ideal solution, but is targeted primarily to foreigners.
Projects such as the above could be of interest to investment funds, insurance companies, provident funds for use by retiring officials and others (foreign or local). As innovative as it may seem, retirement complexes like those in Florida will soon be making their appearance in Cyprus.