Why Market Value Life Leases are Great Alternatives to Freehold Ownership or Renting
Rather than the typical model, where residents live in a “retirement” community and pay a monthly fee for their room, meals and activities, a Market Value Life Lease Plan is a smart choice that allows you to retain equity in your home. According to CMHC, there are more than 300 Life Lease projects in Canada, over 140 in Ontario and they are becoming more popular all the time.
Under a Market Value Life Lease Plan, residents purchase a Life Lease interest in their home, at market value. This interest gives them exclusive use of their home and shared use of all common areas and facilities for as long as they wish. Residents or their estate may sell their Life Lease interest at anytime. As the market value of real estate increases, so does the value of the Life Lease interest. Therefore residents are able to protect their investment and earn a return similar to the equity growth in a single family home.
Residents also have the opportunity to transfer their Life Lease interest to their heirs through their Will.
Here it is:
A Life Lease Community is geared towards 55+
A Life Lease community like The Village at St. Elizabeth Mills is exclusively designed for the 55+ market and typically offers amenities and programs of interest to that demographic. As well, homes are built to accommodate the unique needs of people at that stage in life. Homes are on a single floor with wider doorways; bathrooms feature walk-in showers with moulded seats and adjustable shower heads. The floorplans are generally designed to accommodate growing mobility issues so that residents can stay in their homes longer.
A Life Lease allows you to build equity and enjoy financial flexibility
When you purchase a Market Value Life Lease suite, you are buying the exclusive right to occupy the unit. You can, at any time, sell the unit to another qualified buyer at current market prices. As real estate values appreciate, your Life Lease appreciates too. When you sell your interest, you will receive whatever equity remains after a transfer and administrative fee (similar to a real estate commission). This allows you to protect your investment and earn a return similar to the equity growth in a home or condo. Sure beats throwing away money on rent every month!