What’s Best for me…do I Downsize or Stay in Place?

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Over 55s finance expert and author, Rachel Lane, says downsizing can be an exciting time, but financial confusion is one of the reasons people delay moving to a lifestyle community, but when they finally make the move, their biggest regret is not moving sooner.

While many clients tell us their downsizing journey is an apprehensive one, their main queries are around comparing the costs of moving into a lifestyle community versus staying in place.

As demonstrated in the table below#, here is an example: Jean is a single pensioner born and bred on the central coast. She is looking to downsize her home, having lost her husband seven years ago. This, along with various other considerations, resulted in her decision to sell.

After achieving a sale price of $450,000 for her house, Jean made a decision to move to Ingenia Lifestyle Chain Valley Bay where she purchased a brand new home for $270,000.

Shirley freed up approximately $165,000 in equity that she can now use to enjoy the next stage of her life!

If we take a look into Jean’s estimated monthly costs after moving to an Ingenia Lifestyle community, compared to staying in place in the family home, Jean is $228.80 better off per month in her new home.

She is able to enjoy spending her new bank balance on herself and her family.

Costs to Downsize Ingenia Lifestyle
Chain Valley Bay
Staying in Place
House Value $450,000 $450,000
Minus Selling Costs -$15,000 $0.00
Remaining Equity after purchase of brand new home at $270,000 $165,000 $0.00
No Stamp Duty  x N.A
Council Rates 0 $220.00 / month
House & Contents Insurance $60.00 / month $100.00 / month
Utilities $60.00 / month $100.00 / month
Home Maintenance $30.00 / month $100.00 / month
Yard Maintenance $0.00 / month $50.00 / month
Site Fees & Lease of Land

Minus Rent Assistance

Equals total Monthly Site Fees

$600 / month

– $258.80

= $341.20*

0
Meals $400.00 / month $400.00 / month
Entertainment and Travel $100.00 / month $250.00 / month
No DMF or Exit Fees  x N.A
Secure Gated Community  Yes  x
Village Manager  Yes  x
Onsite community facilities, free activities  and bus trips  Yes  x
Living with like-minded people  Yes  x
Ingenia Wellbeing Program  Yes  x
Monthly Costs to Downsize

Plus Jean has $165,000 in cash freed up from the sale of her home

$991.20 $1,220.00

There are a variety of other non-financial benefits Jean takes advantage of too:

  • Ingenia Lifestyle’s purchasing model is unique with buyers purchasing a new, architecturally designed home and leasing, rather than owning the land. It offers a much more affordable entry price point and eliminates the need to pay stamp duty
  • There are no deferred management fees or entry or exit fees. You also keep 100% of the capital gains on the sale of the property
  • Downsize and de-stress knowing you don’t have cupboards, storage and a garage full of clutter
  • The communities are vibrant places to live with active people who all enjoy the independence, freedom and choice to live the way they want
  • There are more opportunities for socialising and meeting like-minded friends which provides many mental health benefits to improve your wellbeing
  • With less home maintenance you can free up your time to do more of the things you want to do such as travel or start a new hobby
  • Expect the monthly bills to be smaller after you downsize
  • Have your own set routine or join in the social activities at the clubhouse
  • You have the opportunity to take control of your future

Once you analyse the financial lifestyle and wellbeing advantages of living in an Ingenia Lifestyle community it is clear our residents are taking their new-found time to enjoy life!

#Many of the costs stated in this story are approximations and are only intended as that. Each community does vary and costs will depend on the individual location. Personal preference in many areas could change these costs so please keep this in mind.

*Site rental prices are subject to change. Rental assistance figures are indicative only and may vary depending on an individual’s circumstances. For more information visit www.humanservices.gov.au/customer/services/centrelink/rentassistance

If you have further queries, we recommend you seek advice from a financial advisor who specialises in this area.