Retirement village operators

[ralph]

Your 5 points are already priced in. Time to think past that

Most definitely with most, still a few hanging in but the bear market seems to pick on individuals and separate them from the herd .

[clearasmud]

As a shareholder I think residents buying an ORA should have a share in future capital gains and losses in exchange for higher initial ORA prices. Also lower deferred management fees should be possible in exchange for higher annual village fees.

We have a 50% share of capital gains here in Australia.
Low monthly fee ($430), high dmf (42%),low cost of entry ($200k)

[alokdhir]

Which RV operator has the lowest debt ? SUM ? ARV ??

[Balance]

We have a 50% share of capital gains here in Australia.
Low monthly fee ($430), high dmf (42%),low cost of entry ($200k)

Which is what Fletcher is offering in NZ with its Vivid Living developments :

"Residents moving into a Vivid Living community will enter an Occupational Rights Agreement (ORA) with a 15% Deferred Management Fee (DMF) - lower than most traditional villages. In addition, when the time comes to move on, residents will have the opportunity to share in the financial rewards, receiving 50% of the capital gains, less the costs incurred to sell the home.

“We’ve had the opportunity to shape Vivid Living’s financial operating model in a way that embraces recommendations from the CFFC White Paper released last year. This includes, the buyback of the villa within 4 months, no weekly fees after exit, and ORA exit provisions, where we will payback 10% of the Residence Advance within five days of an ORA ending.”

https://vividliving.co.nz/locations/red-beach

[Rawz]

Do these facilities have pools, gyms, recreational areas etc?

[Balance]

Do these facilities have pools, gyms, recreational areas etc?

https://vividliving.co.nz/locations/red-beach

Aimed at a different market segment at tghis stage for Flelcher.

[winner69]

Year end update

A year of carnage - on average 44% down - and over 50% off highs of 2021

As BP would say prices need to double to get back to their former glory

[troyvdh]

alokidhir...re debt.
Yes debt can be a burden.However if all things being kinda equal re income but doesnt inflation kill debt.
If you borrow a 100 dollars today and inflation is say 7 ...is your debt next year 93 dollars ?.

[alokdhir]

alokidhir...re debt.
Yes debt can be a burden.However if all things being kinda equal re income but doesnt inflation kill debt.
If you borrow a 100 dollars today and inflation is say 7 ...is your debt next year 93 dollars ?.

I fully agree ...having debt deployed as real assets will work well eventually ....but if u r over geared then rising rates can get u into debt trap also ...U need to have cashflows to service that debt for a while , while rates are working against your valuations of land and buildings etc

[Balance]

alokidhir...re debt.
Yes debt can be a burden.However if all things being kinda equal re income but doesnt inflation kill debt.
If you borrow a 100 dollars today and inflation is say 7 ...is your debt next year 93 dollars ?.

Not when properties prices are deflating as is currently the case.

In which case, $100 debt today becomes $107 supported by property which has gone from $100 to $85!

So :

2021 $100 debt : $100 property (LVR 100%)

2022 $107 debt : $85 property (LVR 126%)

And if it continues into 2023 (say 7% interest & 10% drop in property values:

2023 $114.4 debt : $76.5 property (LVR 150%)

Debt is wonderful when property values are on the way up.

Nasty & a killer on the way down - why many a highly geared property company go belly up in a down cycle.