Five reasons sectional titles trump life rights for retirees

When it's time to buy a retirement property in South Africa, you usually have two options: life rights or sectional title. Many choose life rights for the lower upfront costs and lack of transfer duties. As a real estate company specialising in property sales to seniors, the CSi Property Group has put together a list of the top five advantages of sectional titles for seniors.

1. Your property is your own and you make the decisions.

When you buy a sectional title for your retirement, you own your property with no limitations, apart from the need to follow the body corporate's rules. Your property can be sold, rented out or passed on to heirs in your will. Your home is registered in your name at the Deeds Office, which gives you full legal ownership. With life rights, on the other hand, you have the right to occupy the property for the remainder of your life but never hold full ownership of the property.

2. Your asset grows in value.

Since a sectional title home is a tradable asset, your unit can appreciate in value over time. This means capital gains if you choose to sell, or a more valuable asset for your family members after your passing. Sectional title properties, especially those in retirement villages, can offer outstanding capital appreciation. This is especially true if they are located in desirable areas where there's a limited supply of properties available.

3. You've got the flexibility to rent your property out if you want to

If you own a sectional title retirement property, you have the option of renting it out. This can provide an income stream if you decide that the property isn't right for you or if you want to spend an extended time elsewhere. Life rights properties, on the other hand, cannot be rented out. Your agreement grants you the right to occupy a property for the rest of your life but does not grant you ownership or the right to lease the property to other people. Perhaps you're not yet at retirement age but want to invest in the property that you'll one day live in.

4. Sectional titles give you high levels of autonomy.

As a sectional title owner, you often have a greater say in the way the complex is run than you would in a life rights situation. Being the owner of a sectional title makes you an automatic member of the body corporate, which gives you a vote in any decisions that need to be made.

Sectional titles also offer more autonomy than life rights homes in terms of allowing you to do renovations or improvements within your home. While sectional titles are likely to have rules regarding the appearance of your home's exterior, the decisions about how to use your interior space are yours.

5. Changed your mind? You can simply sell your sectional title.

As the old saying goes, life is what happens when you're making other plans. Perhaps your circumstances will change and you'll need to relocate. If you've purchased a sectional title, you can simply sell it at market value. In a life rights scheme, you may only be refunded the initial purchase price or a limited share of the property's appreciation.

If you're interested in investing in a sectional title unit in one of Gauteng's many retirement estates, get in touch with the CSi Property Group. We've got decades of experience in helping people find the ideal home for their golden years.