Anil Kapoor, 67, is a retired businessman from Delhi. I.K. Khullar, 65, a retired general manager with Coal India and hails from Ranchi. R.S. Sahrawat, 69, is a retired defence personnel from Sonipat. The three didn’t know each other till recently, but are fast friends now as residents of Utsav, Ashiana Housing Ltd’s senior living housing project in Bhiwadi, along with their spouses.
Senior living projects are slowly gaining ground. “There are 30-35 operational senior living projects in India," said Manish Kumar, managing director, strategic consulting, JLL India, a realty consultant. Various others are under construction. “Retirement housing, senior housing and assisted homes are the next big real estate trend," said A.S. Sivaramakrishnan, head, residential services India, CBRE South Asia, a real estate consultancy.
Don’t think of these projects as dilapidated old age homes. “With more organised companies in this segment now, accessibility to quality houses with good and apt amenities have increased manifold," said Khurshed Gandhi, managing director, consulting, Cushman & Wakefield, a realty consultancy.
These are typically gated communities and only those above a certain age can be residents. For instance, in Ashiana Housing’s Utsav, minimum age is 55 years; and in Bougainvilla-Hermitage Retirement Village, north Goa, at least one spouse has to be 50 years old. Even if you buy at, say, age 40, you can begin to stay only later. You can, however, rent the space out to seniors in the meanwhile. For buyers, there is no age restriction.
What are the options?
Broadly there are two types of retirement housing projects—active living and assisted living. The former is suitable for those who can take care of themselves and manage their day-to-day activities. The latter is for those who need assistance. Usually, both options are available in established projects.
In terms of occupancy, there are three models. First is a complete sale, in which property rights are transferred to the buyer; similar to buying any other type of property. Second is a pure rental model, in which the user rents from the owner. Third is the lease deposit model—a combination of the previous two models.
If buying the house, the price will depend primarily on location, size and facilities. “In India, the general mind set is owning the asset rather than renting it out, mainly for the assurance of passing it on to the next generation. Those staying abroad buy senior living houses as an investment tool and also for parents to stay safely and with facilities and amenities," said Gandhi.
Most retirement projects are situated on the outskirts of cities, where land prices are lower. Being in suburbs also means lesser pollution, more open areas, and since daily commute to work may not be needed, being away from city limits is not a problem.
“Some retirement homes are costlier than normal homes due to the additional facilities. But the sizes are also smaller," said Anil Rego, chief executive officer, Right Horizons, an investment advisory. For instance, Ashiana Housing’s Nirmay Senior Living in Bhiwadi costs 3,800-3,900 per sq. ft, whereas other housing projects in the same area cost 2,800-3,200 per sq. ft.
You can sell to anyone if you need to relocate, but only a person meeting the age criteria of the project can live in it.
With the rental model, the tenant needs to make security deposit and rent to the owner. Rents depend on the project and facilities. For instance, in Utsav senior living, the range is 5,000-7,500 per month for 1-3 bedroom, hall and kitchen apartments. Maintenance charges can be borne by the owner or the tenant. Tenants can use all available facilities, but any separate usage charge has to be paid.
In the lease deposit model, a certain amount has to be paid upfront as deposit, which determines the monthly lease amount. There is no transfer of property rights. You get the deposit back when you leave (if the lessor dies, heirs get the deposit). For instance, at Godhuli senior citizen homes near Kolkata, for a standard single room, initial deposit is 7 lakh and 12,000 monthly lease. A super deluxe cottage for two occupants costs 27,000 per month with a deposit of 22 lakh. Only 60% of the deposit is refunded, without interest.
The choice will depend on your financial situation and other aspects. If you are planning to buy one, you may have to finance the purchase entirely from your pocket. Although a few developers have tie-ups with banks for housing loans for these projects, most lenders do not offer loans to those above a certain age or post-retirement. You may need to take a joint loan with an earning child. If you do so, ensure that the monthly instalments can be paid comfortably. Keep money aside for regular and medical expenses.
While there is no minimum age for buying a retirement house, you may buy well in advance so that any loan can be paid off while you are earning. But buying later also has its advantages. “It may be a good idea to buy the house closer to retirement as one’s thinking and requirements undergo many changes over the years," said Suresh Sadagopan, a Mumbai-based financial planner. “Also, the property gets old by the time one wants to occupy it and would need a lot of maintenance. Newer properties will have latest facilities," he added.
What to look for?
Since a retirement home is bought for the long term, it’s important to choose the right property that has all the required facilities. “Apart from basic needs such as healthy meals and medical facility, additional ones such as ergonomic design, assisted living, emergency response system, safety (CCTV cameras and gated community), connectivity (Internet and phone) and on-call facility are necessary features," said Dhruv Agarwala, chief executive officer and Co-Founder, PropTiger.com.
Location plays an important role. A multi-speciality hospital being nearby, proximity to a city that you are familiar with or have friends and relatives in, or where you spent most of your life, or where you have immovable assets, are all important. “Ideal proximity is 25-30 km from a big city," said Rego.
Look at the available infrastructure, vicinity and connectivity with other parts of the country. Try to stay a few days on a trial basis and interact with other occupants. Doctor couple Lal and Sushila Jagtiani came to know about the Utsav senior living project 5 years back through Internet. They visited the project to check the facilities, before shifting from Mumbai. They stayed for 10 days in a trial apartment and then on rent for eight months, and finally bought a one-bedroom apartment.
Be sure to check the rules and regulations of the project in advance. Many may not serve non-vegetarian food or allow personal furniture. There is usually a limit on how many days a guest, including your children or grand children, can stay with you. Some allow guests for just 30-60 days a year. Do remember that additional services will come at a cost. If the project is far from city limits, it may even be quite a distance from facilities such as a full-service hospital, airport or railway station.