Who doesn’t dream of a retirement life that is free of worries? Well, almost everyone. To fulfill this desire of a retired person, builders are coming up with retirement homes or elderly homes. Such elderly homes are not the traditional kind; but they are simply awesome with all the facilities provided.
Why this upgrade by builders?
Today many elderly people are financially independent but are lonely as the younger generation spends their time traveling across globe or is settled in some other city due to job opportunities. In such situations they are left alone and feel unsecure. This is the time when elderly person thinks of moving to a retirement home that provide them a safe environment and they can spend their free time in an active manner by involving themselves in various hobbies and indoor sports.
For builders this was the right opportunity to conceptualize the retirement homes for the benefit of elderly people and provide them the best in safe conditions. Factors that contribute to the growing trend of retirement homes in India:
Concept of elderly homes is not new, but the way it is seen has been changed and modified by the developers and builders. Previously old age home is now changed to senior citizen homes or retirement homes, and now it is willingly accepted by the elderly people as it offer good and comfortable living. The concept of retirement homes has been borrowed from US and Australia where it is quite popular and widely accepted. Retirement homes builders are witnessing ocean full of opportunities in the future with many people opting for retirement homes knowing its benefits.
Huge market for retirement homes
Broadly, India has 100 million elderly people, and if you take around 5% of them as the middle class, it will be like 5 million people. Number is quire huge and this gives a rise to construction of elderly or retirement homes. There are so many builders who are concentrating only in this segment, like Covai Senior Care Constructions, Antara Senior Living, Ashiana Housing, etc.
Leading real estate companies like Tata Housing have launched 12 projects across India with an investment of Rs. 1200 crore and it is estimated to get over by 2018.
Today, retirement homes are regarded as a secure and peaceful place for a retired person. However, it’s not only limited to elderly people, even young people who are interested can invest in this prospect as the value of such property may increase over the years. Besides, it can also fetch good rental returns. At present, the price of retirement homes have appreciated by over 40% when compared to normal housing projects.
My take on retirement homes
If you are charmed by the idea of spending your retirement life in a peaceful and good company then it is the right time to invest in retirement homes, even if you are young, you can invest in it and rent such property and use it when it is time for you.
A competent property manager can add significant value to your investment, which is why many seasoned real estate investors will tell you that a good management company is worth their weight in gold. Here are a few ways that a good property manager earns their keep:
Higher Quality Tenants
Think of tenant screening as the moat and draw bridge around your castle. It is certainly possible to get a bad tenant out of your home once they are in, but it’s a real hassle and you are so much better off never accepting them in the first place. A thorough screening process results in reliable tenants that:
Pay on time
Put less wear and tear on the unit
Generally cause less problems
An experienced property management company has seen thousands of applications and knows how to quickly dig for the real facts about candidates and analyze that information for warning signs. By allowing a management company to handle the screening, you will also be shielding yourself from rental scams directed at owners, and discrimination lawsuits resulting from an inconsistent screening process. This kind of experience takes time, and insomuch as it means avoiding bad tenants, scams and lawsuits it is arguably one of the most significant benefits a property management company will provide.
Fewer costly and time consuming legal problems
Veteran landlords know it only takes one troublesome tenant to cause significant legal and financial headaches. A good property manager is armed with the knowledge of the latest landlord-tenant laws and will ensure that you are not leaving yourself vulnerable to a potential law suit. Each state and municipality have their own laws, these plus federal law cover a number of areas including but not limited to:
Safety and property conditions of the property
Handling security deposits
Avoiding a single law suit can more than pay for the property management fees, and spare you time and anguish.
Shorter vacancy cycles
A property manager will help you perform three critical tasks that affect how long it takes to fill your vacancies:
Improve and prepare the property for rent – A property manager will suggest and oversee cosmetic improvements that maximize revenue.
Determine the best rent rate – Too high and you are stuck waiting, to low and you’re losing money every month the tenant is in the unit. Determining the optimal price requires knowledge of the local market, data on recently sold comparables, and access to rental rate tools.
Effectively market your property – An experienced property management company has written hundreds of ads and understands what to say and where advertise in order to get a larger pool of candidates in a shorter period of time. Additionally because of their volume they can usually negotiate cheaper advertising rates both online and offline. Lastly, they are familiar with sales and know how to close when they field calls from prospects and take them on showings.
Better tenant retention
While its easy to see the effects of lost rent, there are other equally serious problems with a high tenant turnover rate. The turnover process involves a thorough cleaning, changing the locks, painting the walls and possibly new carpet or small repairs, not to mention all the effort associated with marketing, showing , screening and settling in a new tenant. This is a time-consuming and expensive process that can often be averted by keeping tenants happy and well cared for.
A good property management company will have a time-tested tenant retention policy that ensures happy tenants with lengthy stays in your properties. These kinds of programs require a consistent, systematic approach, which is where a good property management company will shine.
Tighter rent collection process
The way you handle rent collection and late payments can be the difference between success and failure as a landlord. Collecting rent on time every month is the only way to maintain consistent cash-flow, and your tenants need to understand this is not negotiable. By hiring a property manager, you put a buffer between yourself and the tenant, and allow them to be the bad guy who has to listen to excuses, chase down rent, and when necessary, evict the person living in your property.
If you let them, your tenants will walk all over you. They have to be trained to follow every part of the lease or deal with the consequences. Property managers have an advantage because tenants realize that they, unlike the owner, are only doing their job and are obligated to enforce the lease terms. Many property managers will tell you that it is considerably easier to manage other people’s units rather than their own for this reason.
Regarding evictions, there are strict laws concerning the eviction process, and doing it wrong, or trying to evict a “professional tenant” can be a MAJOR fiasco. A good property management firm knows the law and has a good process for obtaining the best possible outcome given the circumstances. Never having to handle another eviction can be a compelling reason to consider hiring a property management company.
Assistance with taxes
A property management company can help you understand which deductions you can claim, as well as organize the necessary forms and documentation to make those claims. Additionally, the property management fees themselves are also tax deductible.
Lower maintenance and repair costs
Good maintenance and repairs keep tenants happy and preserve the value of your investment which make them a very important part of land-lording. By hiring a management firm you gain access to both their in-house maintenance staff, as well as their network of licensed, bonded and insured contractors who have already been vetted for good pricing and quality work. This can translate into significant savings compared to going through the yellow pages and hiring a handyman yourself. Not only is the firm able to get volume discounts on the work, they also know the contractors and understand maintenance issues such that they are capable of intelligently supervising the work.
Increase the value of the investment
Preventative maintenance is achieved through putting systems in place that catch and deal with maintenance and repair issues early on, before they grow into larger more costly problems. This requires a written maintenance check program, detailed maintenance documentation and regular maintenance visits. The management firm can also offer you suggestions and feedback on upgrades and modifications, both how they will affect the rent you can charge, as well as their impact on maintenance and insurance.
Personal benefits for owners
Less stress – Avoid having to deal with middle of the night emergencies, chasing down rent, evicting people from your property, tenants who wreck your property, rental scams, lousy vendors, piles of paperwork.
More freedom – Live and invest wherever you want with the constraint of needing to be near your properties. Additionally you can live and travel without the requirement of always being available in the event that your tenants have a need you have to tend to. Once you have found a good management company, it doesn’t matter if you live in the same state. Some landlords live in other countries and simply collect their check every month without ever seeing the property.
Free up more of your time – Time is money, and for many investors, their time can be more profitably spent in areas other than servicing their properties. When you focus on asset management you’re working ON your business, when you manage your own properties you work IN it. Additionally you have more time to spend with family or friends doing things you enjoy.