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02-08-2017, 08:46 AM
#5391
Interesting.
I hadn't really considered people wanting to leave a village before they die or need to move into care.
I had always thought of it in terms of you just leave less inheritance so it didn't matter so much what the exit fees were.
But if you did want to leave then you wouldn't have much left to do anything else.
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02-08-2017, 08:49 AM
#5392
Originally Posted by bull....
Our bear in disguise ... here we go again. Any chance you could explain to us the relevance of the outdated Australian material you posted? What has this to do with SUM - they don't operate in Australia and they have ways fairer contracts anyway?
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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02-08-2017, 09:43 AM
#5393
Originally Posted by BlackPeter
Our bear in disguise ... here we go again. Any chance you could explain to us the relevance of the outdated Australian material you posted? What has this to do with SUM - they don't operate in Australia and they have ways fairer contracts anyway?
Its not out-dated there is on going debate in AUS about the retirement sector , regulation will fundamentally change the dynamics of the sector. Anyone with interest in retirement stocks should follow what happening in AUS as it may affect the sectoer here too one day.
Main points too watch - which will affect profits
exit fees are a good source of gain but under investigation
refurb costs these may stay good revenue
mainteneance fees - probably stay good revenue
churn - cant really change unless we ramp up bad service and nutrition less doctors on site etc then we can get more churn so more churn might make up for exit fee regulation?
some of the things to consider on what is happening in aus and investors should note of what happens there could happen here.
one step ahead of the herd
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02-08-2017, 09:50 AM
#5394
Originally Posted by BlackPeter
and they have ways fairer contracts anyway?
I haven't compared contracts but are they fairer?
What happens to the person who decides to leave before they die (maybe they don't like the village anymore, just like people mive houses now)?
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02-08-2017, 09:56 AM
#5395
Originally Posted by dobby41
Interesting.
I hadn't really considered people wanting to leave a village before they die or need to move into care.
I had always thought of it in terms of you just leave less inheritance so it didn't matter so much what the exit fees were.
But if you did want to leave then you wouldn't have much left to do anything else.
people want to leave sometimes because retirement village like school lots of clicky groups and im the boss of the place mentality amoung residents so not everyone happy all the time so when you leave you have all the costs and may not be able to afford to leave anyway good for village as unhappy resident trapped mean more churn lol
one step ahead of the herd
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02-08-2017, 10:01 AM
#5396
Originally Posted by dobby41
I haven't compared contracts but are they fairer?
What happens to the person who decides to leave before they die (maybe they don't like the village anymore, just like people mive houses now)?
Are they fairer?
Well, I haven't heard that it is possible in NZ to sign up any of these contracts without having them explained to you by an independant lawyer. People fully understand what they sign up to. This does not always seem to be the case in Australia. I think the situation in NZ is fairer.
What happens if they want to leave early?
Depends on how long they did live in the village. The deferred management fee is charged in proportion to the length of the stay (as it should), but with a cap.
SUM offers as well the option to move to a different village by basically transferring your right to live (i.e. DMF is not charged twice). Obviously - if somebody wants to move from SUM into the RYM village next door, they might be out of luck (and need to pay the proportion of the DMF they owe SUM and afterwards whatever RYM charges.
However - not sure what people expect - they get an amazing lifestyle - swimming pool, sauna, bowling green, various clubs, free entertainment - and maintenance, food and care basically charged at cost - and then they complain afterwards if they need to pay the bill for their lifestyle? Sounds pretty greedy to me, but I guess it is typically the children who didn't do anything to accrue the money in the first place but consider it already "theirs" before the parents are 6 foot below.
Obviously - retirement villages could charge the management fee as they go .. just means that many people might run out of money while living in the same village (which can't happen with the DMF). Which option is the better one?
Last edited by BlackPeter; 02-08-2017 at 10:05 AM.
Reason: added first paragraph + formatting
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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02-08-2017, 10:09 AM
#5397
Originally Posted by BlackPeter
Depends on how long they did live in the village. The deferred management fee is charged in proportion to the length of the stay (as it should), but with a cap.
SUM offers as well the option to move to a different village by basically transferring your right to live (i.e. DMF is not charged twice). Obviously - if somebody wants to move from SUM into the RYM village next door, they might be out of luck (and need to pay the proportion of the DMF they owe SUM and afterwards whatever RYM charges.
My understanding is that they take the value of the place when you brought it and subtract the deferred maintenance from that - you get what's left.
But after, say, 10 years the place could be worth a lot more - no doubt the replacement properties will have gone up.
The village will refurbish (at your cost basically) and sell at a higher price.
Is my understanding wrong?
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02-08-2017, 10:09 AM
#5398
Originally Posted by bull....
people want to leave sometimes because retirement village like school lots of clicky groups and im the boss of the place mentality amoung residents so not everyone happy all the time so when you leave you have all the costs and may not be able to afford to leave anyway good for village as unhappy resident trapped mean more churn lol
Not quite so. Most retirement villages offer you a trial period (3 months or so) where you can leave without incurring DMF, and if it takes longer for you to realise that you don't like the climate in this village, than you just need to pay a portion of the DMF. Sounds fair to me - why should retirement villages house elderlies basically for free?
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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02-08-2017, 10:13 AM
#5399
Originally Posted by dobby41
My understanding is that they take the value of the place when you brought it and subtract the deferred maintenance from that - you get what's left.
But after, say, 10 years the place could be worth a lot more - no doubt the replacement properties will have gone up.
The village will refurbish (at your cost basically) and sell at a higher price.
Is my understanding wrong?
It depends - contracts changed over time and depending on the operator ... but yes, this is one of the models. People will be absolutely clear about what they sign up for at the time they enter the contract. If they don't like it, they have all the right in the world to go somewhere else.
BTW - if property prices drop ... they typically still get the money back they put in (minus DMF).
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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02-08-2017, 11:08 AM
#5400
Originally Posted by BlackPeter
It depends - contracts changed over time and depending on the operator ...
Anyone know what model SUM use?
Or the others?
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