Steve Dearlove, owner of Parkside Boutique Suites in Barrie, first discovered the life lease concept while working as an architect designing a new addition to an existing life lease development in Barrie. The life lease idea intrigued him.
Dearlove who owns a fourplex with his partner Mark, has designed a new way of living for seniors in their private home under a life lease arrangement. Dearlove says, “Back in 2015, we said ‘This is our home, but we didn’t want the hassles of renting out the other three units anymore’ so we decided to turn the building into a guest house. We’re now at the precipice of our retirement and we no longer want to be operating a guest house anymore. Our home is far better suited to seniors looking for a permanent residence.”
The pair transformed the fourplex into Parkside Boutique Suites. The three units designed for seniors are spaces where they can enjoy their golden years in comfort and security. Parkside Boutique Suites is on a quiet residential street, close to downtown Barrie, with easy access to public transit. A life lease arrangement in a private home is a perfect solution for seniors who don’t want to live in a residential tower.
What is a life lease?
A life lease is a residential option that is not a rental or a condo unit, but rather something in between. Dearlove says, “Life lease gives the resident the right to occupy a given suite under a contractual arrangement for an indefinite period of time. Residents may leave because of illness, death, or because they want to sell.” Life lease can offer seniors long-term stability and a sense of community. They pay an upfront sum for the right to live in the property, with reasonable monthly maintenance fees thereafter.
Many life lease residences are buildings with dozens of units. Parkside Boutique Suites is unique in that it’s the only life lease option that Dearlove is aware of that is in a private home. Residents can walk out into the garden, they’re only steps away from their car, and there is no inconvenience of waiting for an elevator.
If the life lease building is a non-profit, the title is in name of the sponsor. If it’s in a private home like Parkside Boutique Suites, title remains in the name of the proprietor. The buyer is purchasing a contract that gives them the full right to live in the unit. One typically must apply to live in a life lease community to determine if they meet the criteria. In the case of Parkside Boutique Suites, the target resident would be an independent senior who is at least 65 years of age.
Benefits of a life lease
The benefits of a life lease arrangement for seniors include,
- Financial predictability: Seniors often live on fixed incomes, making predictable living expenses crucial. With a life lease, residents make a one-time upfront payment to secure their residence, followed by manageable monthly maintenance fees, shielding them from the unpredictability of rising rent costs and major repair expenses.
- Investment appreciates in value: Life lease units can be an attractive investment for seniors. While residents enjoy predictable monthly costs, their initial investment will likely appreciate over time. As real estate values increase, so does the value of the life lease unit, providing a significant financial return when the unit is sold.
The investment is also inflation-proof.
Dearlove offers this example, “On the rental market our suites would go for about $1850 a month. At a 2% inflation rate over 20 years, a renter would spend over $572,000 on rent. That’s a shocking number. On the real estate market, that same suite selling for $455,000 today would be a far better deal. Even if you sell it for what you paid for it, you’re still saving $117,000 in rent, and for someone on a fixed income, that’s like gold.”
If you purchased the unit for $425,000 and want to sell it for $550,000, you can do that as long as the purchaser meets the criteria.
- Inheritance: With the initial investment appreciating over time, if the resident passes away, the unit can be returned to their estate or designated beneficiaries. This ensures that loved ones receive a significant asset, providing them financial security.
- Sense of community: Unlike large apartment complexes, a private home fosters closer relationships and support which can be comforting for seniors, providing the with a social network.
- Maintenance is looked after: The monthly fees typically cover everything from lawn care and snow shovelling to building repairs. This frees the resident from the headaches of home maintenance.
- Security: Living in a building with other residents provides a safe and secure living environment. This added layer of protection allows seniors to enjoy their lifestyle with peace of mind.
Life lease is an option to consider
Life lease is a very safe option for someone in their retirement years, offering more financial security than a rental while continuing to grow in value. Dearlove says, “It would appeal to someone who doesn’t want to live in an apartment or condo tower with younger residents. It offers a secure and appealing lifestyle.”
In a private home, residents can sit down with the proprietors who are their neighbours, while sharing dinner and conversation.
It’s an arrangement that may be attractive not only to potential residents but to current landlords who want to get out of the rental business. Dearlove says, “I’ve learned a lot about life leases since first being introduced to the concept in 2011, and now we’re finally doing it; converting privately-owned, multi-family buildings into life lease suites dedicated to seniors.”
Steve is available to offer his services to residents looking for life lease information or current landlords who are interested in switching over to a life lease concept. A life lease can be a rewarding combination of comfortable living and a potentially lucrative investment for both residents and proprietors.
For more information contact Steve Dearlove at (705) 717-1772, via email: [email protected]; or visit Parkside Boutique Suites online here.