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The real cost of retirement villages

Written by Ryman Healthcare
on September 01, 2022

There’s a lot to love about moving to a retirement village. And anyone who’s moved into a village will tell you that while costs seem higher on the surface, you can often achieve better value than you might do living in your own home. There are a few different costs to consider when choosing your village and it’s important you understand what they are and whether it works for you:

  • Ongoing weekly costs
  • Buying into the village and the deferred management fee

Base weekly fee

Think about this as your maintenance and entertainment fund; it’s a weekly fee that covers the day-to-day running of your village. It keeps the pool in top shape, the grounds looking gorgeous, and the fun activities flowing. It also covers exterior maintenance on your home, including cleaning your windows (inside and out!). So, if your gutters back up or window is broken, you can sit back and let someone else take care of it.

What you should do:

  • Compare the base weekly fee between your short-list of villages
  • Read the fine print
  • Check whether the weekly fee is fixed or if it could increase. This might be to match inflation, or to cover other rising costs. If you’re on a fixed income those increases may be hard to meet.
  • Check what your base weekly fee actually covers: most villages will cover the basics of grounds and building maintenance. A Ryman village will include extras like window cleaning, activities, morning and afternoon tea and outings.
  • Ensure that the weekly fee and the deferred management will stop on the day you permanently vacate your apartment or villa.

The Ryman difference is that we offer a fixed base weekly fee for the entire time you occupy your apartment or villa – so unless you change from independent living to a serviced apartment or you add extra care options, what you pay per week when you move in, is what you’ll always pay.

Buying into the village and deferred management fee

Most retirement villages use a right-to-occupy model. This means the price you pay buys you the right to occupy the apartment or villa for life, with access to community amenities.

When you permanently vacate the village, your apartment or villa is on-sold and the village retains an agreed deferred management fee, also known as an exit fee or departure fee. At Ryman villages this is capped at 20% of the loan amount (entry payment). The balance is then paid to you or your family.

Every village provider will approach this transaction differently and it can significantly impact how much you end up paying when you leave. There are a few things to consider:

What is the deferred management fee capped at?

This varies dependent on your village provider, but is usually capped between 25% and 35% of the entry payment. Ryman’s deferred management fee is capped at 20% overall.

Use our deferred management fee calculator to compare the fee

Are there extra costs for selling your home?

Many villages will charge to refurbish your home or to cover the sales process (on top of the deferred management fee). At Ryman villages, that’s all covered by the deferred management fee.

What happens if the sale of your apartment or villa is delayed?

When you leave a retirement village, many providers won’t repay your money until your home is sold. Some will keep charging you the ongoing weekly fee (and continue calculating your deferred management fee) until your home is sold. So, it’s important to ask how long the average sale takes. At Ryman, the base weekly fee, and the deferred management fee, will stop on the day you permanently vacate your dwelling. No one in Ryman’s over 35-year history has waited longer than 6 months to be repaid.

Get educated: here’s your homework

There are lot of great reasons to choose a retirement village lifestyle, however by doing a little research, you'll be able to find the the best value for money:

• Ask questions about ongoing fees and what they include.
• Read all the fine print.
• Ask whether the DMF is capped.
Find out how the deferred management fee is calculated.
• Ask if there are extra costs around selling your village home.
• Find out what happens if the sale of your village dwelling is delayed.

Thinking about retirement village living? Learn more about Ryman villages.

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