Looking for retirement home? You could lose money, don't make these mistakes

In the last few years, property developers have been marketing ‘senior living’ projects to attract ‘seniors’ - who are aged 55+ and are looking to live independently in a peer environment. Senior living projects are retirement homes, with facilities to cater to the needs of old age. DNA Money spoke with experts to understand how one should select a senior living project given the one-time and recurring costs and range of arrangements.

A home after retirement
Senior housing options are ideal for seniors who have no major health issues and can take care of themselves. According to ANAROCK, such projects usually provide a variety of facilities for recreation and socialising, including clubhouse, health club or gym, facility management services, squarely focused on the needs of the elderly. This is not assisted living, where the homes are for adults who need some or considerable assistance to live their daily lives.

As per ANAROCK data, there are currently around 4,500 senior living units available in the market, and more than 2,000 units are in different stages of construction. Approximately 10 new projects are slated to come up over the next few years.

Senior living is seen as a growing trend in cities such as Coimbatore, Puducherry, Goa and Dehradun, which have traditionally been retirement cities. Most of the existing and planned senior living projects are essentially located in satellite towns of major metros like Bengaluru, Pune, Chennai and Delhi, and non-metros including Kochi, Jaipur, Bhopal, Coimbatore, Rishikesh, Goa and Mathura.

“In Bangalore, a unit of 600-1,450 square feet will have a ticket size of Rs 13-90 lakh. Food charges could be Rs 15,000. Monthly maintenance could Rs 2-7 per square feet. In NCR, a 800-1,600 square feet unit will have a ticket size of Rs 23-58 lakh, with Rs 12,000 food charges and monthly maintenance of Rs 3-9 per square feet. At the pan-India level, there is maximum supply in the budget range of Rs 35-45 lakh. Certainly, senior living as presented in India is far from unaffordable, as it is in many of the more developed countries,” says Anuj Puri, Chairman, ANAROCK Property Consultants.

Plan your finances
Given the costs, financial advisors say that one has to financially plan for living in senior projects. If you require Rs 25,000 per month and assuming 5% annual increase, you will require Rs 3 lakh this year, Rs 3.15 lakh in the next year and so on. “This means besides the unit cost, you will require a regular stream of earnings for monthly expenses. So, you should have such earnings from bank deposits or you can do a systematic withdrawal plan with mutual funds. There are other government schemes also where you can get a fixed payout. Do remember that other costs like hospitalisation/medical insurance and medicines, etc are also real costs that you would have to pay from your own. So, having a large enough corpus is important,” says Anil Rego, CEO, Right Horizons.

Location and facilities
At its base, senior living is not so much about development as it is about providing a specialised service. But, due care has to be given so that senior-focused customisation and facilities are there.
Arvind Nandan, executive director research, Knight Frank India lists four factors to keep in mind. First, location is key. “Senior living facilities are catching on in India as our geriatric population increases. When one chooses a facility today, two key aspects location and the facilitates available have to be kept in mind. Most senior living facilities are located away from cities. Ideally, the location of should be easily accessible via different modes of transport to ensure regular familial connect and quick transportation in an emergency,” says Nandan.

Since most cities are saturated, peripheries of most large cities are also attracting senior living projects because of the less cluttered surroundings suitable for a retired lifestyle, as well as the availability of large tracts of land. But you need to check if the location is too far. “If you have to travel a lot or spend money on cab just to visit the bank branch twice a month, think again,” says Naresh Verma, who recently opted out of such a project in the outskirts of Noida.

The second aspect is facilities, especially healthcare. “In India, geriatric healthcare is already a challenge and being equipped with good hospitals and healthcare centres is a non-negotiable factor for any senior living establishment. Therefore, while choosing a senior living facility, always pick one that offers good healthcare facilities including hospitals, pharmaceutical and drug stores,” says Knight Frank’s Nandan.
Another important aspect is the infrastructure and access provided to the homes/quarters. You should ensure that the accommodation is easily accessible via ramps, elevators, etc. The place should provide for proper laundry and nourishment services, Nandan adds.

Unlike in other countries, India does not have a concept of long stay rentals and senior living spaces have to be bought like any other regular property and is therefore subject to inheritance. “Hence, check the builder’s reputation, the land policy under which the land is acquired, legal due diligence cooperative housing society norms that are to be followed,” says Nandan.

This article was first publised in DNA as 'Factor in expenses at senior living homes'