Best retirement village stock

[fish]

Having sold out of a lot of stocks recently I am looking at buying into one or two of these-perhaps one NZ and one Aussie.
I dont have the time or ability to do this myself and would appreciate reasoned opinions on this topic.
With the average tenure of only 7 years and profits made on selling afterwards I feel big future profits.
Its a growing field with the aging demographics but will take time before profits are realised

[BlackPeter]

Having sold out of a lot of stocks recently I am looking at buying into one or two of these-perhaps one NZ and one Aussie.
I dont have the time or ability to do this myself and would appreciate reasoned opinions on this topic.
With the average tenure of only 7 years and profits made on selling afterwards I feel big future profits.
Its a growing field with the aging demographics but will take time before profits are realised

Define "best". As in any other industry it is a tradeoff between risk and reward - and looking into the big three in NZ and INA in Australia, I don't think that anybody can predict which of them will do "best" in the next decade or so.

RYM - (forward PE of 14.5 and CAGR of 14) biggest player (lowest risk?), middle of the road in terms of earnings and growth and most diversified (with their Australian operation). However, this might mean as well the risk of Australia not going that well - RYM would not be the first NZ company getting a bloody nose in the West island.

SUM - (forward PE 11 and forward CAGR 17.6) highest NZ based growth, good NZ diversification and youngest building stock (i.e. less risk for building substance problems);.

MET - on face value best PE (forward PE of 7.3 however CAGR slightly below 10) ... however low regional diversification (higher risk) and older building substance (higher risk).

INA - (forward PE of 12.5 and forward CAGR of 25): different business model (rent instead of deferred management fee). Outstanding growth (however part funded with lots of CR's). Just Australia based. However - if you buy too many of them (getting over the de minimis rule ($50k per person for all not exempted overseas investments), your NZ tax return will turn more complicated ...

Take your pick. I am holding at current SUM and INA, but would not be able to predict the winners for 2027 ;); Am however sure that they all will do fine in the long run.

[000831]

For the retirement stocks, those companies show growth characters most of time.



The industry shows a clearly growth cycle.

Startup - Locally growth with some significant market segments with IPO and other fund raising to support its growth.
Growth - Enter other cities retirement market. Low Dividend, Business Model Simple, copy and growth.
Expansion - Accumulated growth national wide. Low Dividend, Mixed Business Model.
Maturity - Profit growth slows down and debt level high with high Dividend. Companies may enter other country territory to seek further growth. Explosure more risk, such as global financial risk, foreign currency and industry rules, etc. Business Model complex.


Take ARV for an example,

It started up Christchurch with 19 retirements villages, then enter national wide territory. Eventually, it may enter AUS, CANADA or US market, just as other companies in the same industry. ARV definitely is in the phrase two, growth stage, with low dividend and high growth rate.

RYM matured, enter international market with high debt level and dividend.

SUM with high debt level, its growth stage may stay somewhere between expansion and maturity.

Then you compare those stocks with its price, market capitalisation and business models. I rekon that ARV is the best performing stock during 2017-2019 IMO.

8883


The purpose for analysis of the whole industry is to seek the best return.

$3/4 grows to $6/7 means 100% growth in profit. However, a $1 stock grows to $4/$5 means 300% in return.

RYM market price does not change much those years for two reasons IMO. 1. The price already reflects its growth rate and the company entered maturity stage. 2. The price is too high, the funds do not want to buy more to aviod liquidity problem.

Now, we maybe need to look at those stocks priced under $2 for a good return, if their growth is solid and stable.

[Lewylewylewy]

...$3/4 grows to $6/7 means 100% growth in profit. However, a $1 stock grows to $4/$5 means 300% in return.

RYM market price does not change much those years for two reasons IMO. 1. The price already reflects its growth rate and the company entered maturity stage. 2. The price is too high, the funds do not want to buy more to aviod liquidity problem.

Now, we maybe need to look at those stocks priced under $2 for a good return, if their growth is solid and stable.

Agreed, RYM just need to do a share split, then this will make the company worth more... If only they'd registered more shares when the company was founded!

😜

[Lewylewylewy]

https://www.google.co.nz/search?q=nzx+ebo&oq=nzx+ebo&aqs=chrome..69i57j69i60.4941j0j4&client=ms-android-huawei&sourceid=chrome-mobile&ie=UTF-8

[whatsup]

Howabout the latest entry OCA ?

[iceman]

Agreed, RYM just need to do a share split, then this will make the company worth more... If only they'd registered more shares when the company was founded!

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Ummm, how would a share split make them worth more ??? Hasn´t hurt Berkshire Hathaway having expensive shares !

[Joshuatree]

Howabout the latest entry OCA ?

Too early to tell but thats where my money is at the mo; we will see soon.

My ideal retirement village would have

In the R&R section; spa pools with giant TV screens; a cocktail service;

And a soft drugs dispenser; and a reminiscing room to lounge in when under the influence and to be creative. A full array of art materials to make some big colourful canvases and some Hinuera stone blocks out side to whittle away on.

Some listening rooms one with a stereo system including Peerless speakers and a turntable and thousands of Lp's another room for streaming music, another for CD's.

A masseuse available 12 hours away to deal to aches and pains and stiffness.

An IT room where an IT person can personally help with ones computer and cellphone glitches.

A leading edge room where one can be clued up on the absolute latest discoveries and breakthroughs and keep up with the grandkids.Regular TED like speakers.

A volunteer service where one can do great things for ones community by donation or if able, doing.This would include environmental issues.


A competition /gamesroom to be an old fool in and boast and exaggerate a bit.

A blokart track

A tower where one can look at the world through a 300 zoom camera.

A large nursery and garden where one can cultivate flowers plants and trees for all.A fence surrounding it to keep all pests out.

A safe place for a bonfire every month where one can stoke the fire, yarn and look into the fire and link up with ones ancestors.

That will do for starters from me. What else:confused::D

[see weed]

I like the blokart track. And maybe a mini casino, and a bar. Will look forward to moving into one of your villages.

[davflaws]

I hope I will still be interested in sex.

[crighton100]

Be wary of the retirement sector.I live in a metlife care village & we have most of the above facilities.The problem is you are surrounded by a load of old fuddies,who are in all stages of going to the dogs,so these places are not for everyone.The big problem at the moment is the property market,as it has been going up & up the villages have done very well [our unit cost $350000 9 years ago & sell currently for $620 plus & the weekly rate you have to pay up from $130pw to $150pw,guaranteed for life].Now people wanting to come in are finding it hard to sell their houses as the prices have held or slightly dropped,all you need now is a national drop in house prices & these village operators are going to be in a bit of trouble.Just thought you might like a perspective from a person in a village [I would not buy into this sector as I think they are over priced & a bit risky].

[Investor]

Be wary of the retirement sector.I live in a metlife care village & we have most of the above facilities.The problem is you are surrounded by a load of old fuddies,who are in all stages of going to the dogs,so these places are not for everyone.The big problem at the moment is the property market,as it has been going up & up the villages have done very well [our unit cost $350000 9 years ago & sell currently for $620 plus & the weekly rate you have to pay up from $130pw to $150pw,guaranteed for life].Now people wanting to come in are finding it hard to sell their houses as the prices have held or slightly dropped,all you need now is a national drop in house prices & these village operators are going to be in a bit of trouble.Just thought you might like a perspective from a person in a village [I would not buy into this sector as I think they are over priced & a bit risky].

It's common in New Zealand for retirement homes to offer buyers an option to purchase the house and have the right to sell it at cost or pay extra and have full sale rights. Property is a large part of retirement village business and they will still profit if house prices go down. I have a family member who signed away would of now been a $700k capital gain.

[Beagle]

See my comment today in the SUM thread. This is a company with a well proven track record since listing over 5 years ago of growing underlying earnings at a compound average growth rate of 48% and is set to potentially exceed that growth rate this year ! I put a lot of stock in companies with a proven record of growth as opposed to one-off forecast of growth although I do also hold OCA as a diversification strategy and because if they can achieve their forecast growth their underlying PE is cheap for this sector at 12.2.

[bull....]

Be wary of the retirement sector.I live in a metlife care village & we have most of the above facilities.The problem is you are surrounded by a load of old fuddies,who are in all stages of going to the dogs,so these places are not for everyone.The big problem at the moment is the property market,as it has been going up & up the villages have done very well [our unit cost $350000 9 years ago & sell currently for $620 plus & the weekly rate you have to pay up from $130pw to $150pw,guaranteed for life].Now people wanting to come in are finding it hard to sell their houses as the prices have held or slightly dropped,all you need now is a national drop in house prices & these village operators are going to be in a bit of trouble.Just thought you might like a perspective from a person in a village [I would not buy into this sector as I think they are over priced & a bit risky].

well said , i dont live in a retirement village yet but have talked to people in villages with mixed results so as you say go in with your eyes wide open

[Fatboyj]

+1 for OCA. They currently have the best retirement village ad on tv playing to the tune of Magic Moments and kittens.

[crighton100]

Just to clarify what happens in most retirement villages.When you buy in [take us ,at $350000.00] you lose 10% a year for 3 years,so after 3 years or in our case 9 years] if you move out or peg it,they only pay you out or your estate $245000.00,less any costs above fair wear & tear [such as if you have a heat pump put in & the next buyer do not want it,you get charged for it to be ripped out & the walls put back to normal].So not only have you missed out on capital gains,you have lost a lot of your original input.They also have a clause where they can continue charging the weekly fee for up to 6 months,while they prepare the unit for resale & find a buyer.This is what happens in nearly all villages,there are a few exceptions,but they are not the norm.

[BlackPeter]

Just to clarify what happens in most retirement villages.When you buy in [take us ,at $350000.00] you lose 10% a year for 3 years,so after 3 years or in our case 9 years] if you move out or peg it,they only pay you out or your estate $245000.00,less any costs above fair wear & tear [such as if you have a heat pump put in & the next buyer do not want it,you get charged for it to be ripped out & the walls put back to normal].So not only have you missed out on capital gains,you have lost a lot of your original input.They also have a clause where they can continue charging the weekly fee for up to 6 months,while they prepare the unit for resale & find a buyer.This is what happens in nearly all villages,there are a few exceptions,but they are not the norm.

Sure, this are the rules. Somehow residents need to pay for all the luxury on offer in the DMF retirement homes. None of these costs should come as a surprise to you - the DMF is the exact reason that they are able to offer you such low weekly rates. Didn't you read the contract before you signed it?

I am not quite sure what you are complaining about - do you expect private companies (and their shareholders) to not just house you and care for you, but provide as well for bowling, sauna, swimming pool, fitness club and other amenities without charging you for these things? Who do you think should pay for these amenities and services if you as a user do not like to ...?

Talk about eating your cake and keeping it ...

[percy]

Sure, this are the rules. Somehow residents need to pay for all the luxury on offer in the DMF retirement homes. None of these costs should come as a surprise to you - the DMF is the exact reason that they are able to offer you such low weekly rates. Didn't you read the contract before you signed it?

I am not quite sure what you are complaining about - do you expect private companies (and their shareholders) to not just house you and care for you, but provide as well for bowling, sauna, swimming pool, fitness club and other amenities without charging you for these things? Who do you think should pay for these amenities and services if you as a user do not like to ...?

Talk about eating your cake and keeping it ...

Totally agree.
Most people understand the mechanicisms of "right to occupy" compared to "ownership" before they sign up.
I will be entering a retirement village in the not too distant future, for lifestyle reasons,not finnancial.

[Beagle]

Totally agree.
Most people understand the mechanicisms of "right to occupy" compared to "ownership" before they sign up.
I will be entering a retirement village in the not too distant future, for lifestyle reasons,not finnancial.

Smart move Percy. Average entry age for SUM is now 79. You get best value from this supportive caring environment with all the facilities by moving in a lot earlier than that.
Mum in her retirement village reports consistently hearing words to this effect from new incoming residents, "Wow, what a great place, I wish I'd moved in years ago".
Back in the day at the Peninsula club where she is you could move in as early as 55 and some people have enjoyed having everything taken care of for the last 30 years, (its now one of N.Z.'s oldest retirement villages, (was originally a holiday timeshare resort. She as a wonderful north facing stand alone 2 bedroom condominium of just over 100 square meters with its own north facing sunroom and of course all the community facilities including swimming pool, spa, bowling green library e.t.c.e.t.c.
Fees are now fixed for life at $630 per month which covers everything and seem reasonable to me.

[bull....]

do any of these villages provide personal maid services?

[Beagle]

do any of these villages provide personal maid services?

SUM's villages have a range of supported living options including options packaged together like
Supported living package 1. Housekeeping, Linen and towels laundered, morning and afternoon snacks, newspaper delivery, 2L of milk delivered per week, health assessments as required.
There's more support available in supported living packages stage 2 and 3 as required as people get older and need it.
As you would expect the cost goes up the more support older residents need.

[Fatboyj]

do any of these villages provide personal maid services?

And whats the min age for most of these places?

[Beagle]

And whats the min age for most of these places?

Most are now 70.

[bull....]

Most are now 70.

you mean i have to wait till im 70 :( sounds like im missing out , buy the way i meant personal service

[Under Surveillance]

do any of these villages provide personal maid services?
If you're in an independent apartment you can make your own arrangements to be visited by a personal maid, or rent boy, according to your preferences

[bull....]

If you're in an independent apartment you can make your own arrangements to be visited by a personal maid, or rent boy, according to your preferences

if i live in the main part what do i do then?

[percy]

if i live in the main part what do i do then?

Very little...lol.

[Investor]

if i live in the main part what do i do then?

Play bingo

[Bjauck]

If you're in an independent apartment you can make your own arrangements to be visited by a personal maid, or rent boy, according to your preferences I think a resident would still have to ensure that they abide by the "Permitted Uses" under their Occupation Right Agreement.

[Beagle]

if i live in the main part what do i do then?

Free Friday night drinks during happy hour at SUM villages. Be mad if you didn't take advantage :)

[percy]

Maybe Bull and his friends could get a lift in the sunshine coach to K road afterwards.?.lol.

[LAC]

Totally agree.
Most people understand the mechanicisms of "right to occupy" compared to "ownership" before they sign up.
I will be entering a retirement village in the not too distant future, for lifestyle reasons,not finnancial.

Which one though:D

[percy]

Which one though:D

At this stage I don't know.

[crighton100]

Sorry old chap,you seem to have got the wrong end of the stick,I as just trying to explain the ups & downs of villages [a lot of investors,who are not looking to go into a village do not understand the system,I was just trying to give a bit more information before they invested,but maybe you know it all]. I quite like it because we travel a lot & have security in the village & all the maintenance & gardens are done for you..Believe it or not most of the residents do not use the great facilities [like indoor heated pool,billiard table,bowling green,mini golf,croquet,a bar with real cheap drinks,a large tv with all the sky channels in a nicely heated lounge].So I think you are away with the fairies,I was only pointing out the obvious for those not well informed & stating the fact that there could be problems for them in the future if property prices fall [as I think they will].

[bull....]

Sorry old chap,you seem to have got the wrong end of the stick,I as just trying to explain the ups & downs of villages [a lot of investors,who are not looking to go into a village do not understand the system,I was just trying to give a bit more information before they invested,but maybe you know it all]. I quite like it because we travel a lot & have security in the village & all the maintenance & gardens are done for you..Believe it or not most of the residents do not use the great facilities [like indoor heated pool,billiard table,bowling green,mini golf,croquet,a bar with real cheap drinks,a large tv with all the sky channels in a nicely heated lounge].So I think you are away with the fairies,I was only pointing out the obvious for those not well informed & stating the fact that there could be problems for them in the future if property prices fall [as I think they will].

good on ya we need more informed knowledge perhaps you would know what the policy or rules are around personal needs , do they provide facilities for this or services is it allowed i would hate to be in such nice villages without a way to ya know release the stress.:cool:

excuse my interest if anyone offended i cant seem to find anything about this in the brochures

[crighton100]

Sorry old chap but not interested in giving any more info to a load of not really serious people,I will keep to reading what you experts have to say & watch you lose your money

[Bjauck]

good on ya we need more informed knowledge perhaps you would know what the policy or rules are around personal needs , do they provide facilities for this or services is it allowed i would hate to be in such nice villages without a way to ya know release the stress.:cool:
I doubt any village would provide the services to which I suspect you are referring. Some may have gyms with therapeutic masseurs.

Under the ORAs I have seen, you can have visitors who can stay for several weeks. It is up to you and your visitors what (legal) activities you pursue behind closed doors provided they do not breach the terms of your ORA.

For example:
In this Wanaka ORA
30.2 You may have friends or relatives to stay with you in the Residential Unit for periods notexceeding three weeks at any one time. However, we reserve the right to curtail any sucharrangement where we consider it is interfering with the quiet enjoyment of other residents inthe Village.

I imagine a stranger who is hired for personal services for an hour or so would not produce too much disruption. However a long-term paid (professional) arrangement could be more problematic as, for a start, it would not involve a friend or relative.

http://wanaka-retirement-village.co.nz/downloads/wanaka-retirement-village-occupation-right-agreement-oct13.pdf
http://wanaka-retirement-village.co.nz/faqs/residents-rights

[bull....]

Under the ORAs I have seen, you can have visitors who can stay for several weeks. It is up to you and your visitors what activities you pursue behind closed doors provided they do not breach the terms of your ORA.

For example:
In this Wanaka ORA
30.2 You may have friends or relatives to stay with you in the Residential Unit for periods notexceeding three weeks at any one time. However, we reserve the right to curtail any sucharrangement where we consider it is interfering with the quiet enjoyment of other residents inthe Village.

I imagine a stranger who is hired for personal services for an hour or so would not produce too much disruption. However a long-term paid (professional) arrangement could be more problematic as it would not involve a friend or relative.

http://wanaka-retirement-village.co.nz/downloads/wanaka-retirement-village-occupation-right-agreement-oct13.pdf
http://wanaka-retirement-village.co.nz/faqs/residents-rights

thanks gives some insight into policy seems as though its alright as long as ya not a screamer. ( not as if i can just wander in an ask residents this )

[Bjauck]

thanks gives some insight into policy seems as though its alright as long as ya not a screamer. ( not as if i can just wander in an ask residents this ) Legally "quiet enjoyment" is a broader concept than just a prohibition against loud noise...