Financial options for an "indigent" property owning pensioner ?

[Grant]

A friend of mine's mother is close to "indigent", as she has very little income.
However, she lives in an apartment worth about R2m (she has lived there for decades).
My friend was killed in an accident some time back and hence his mother has no one to really leave the property to when she dies.
She is physically active and is not suited to a retirement home type of lifestyle - she is 60 something now.

An obvious option is to sell & rent - but that puts her at the mercy of a landlord.
She really wants to remain in the property.
Sale & lease back is equally tricky.

Can anyone think of other creative options

 

[OrbitalDawn]

Sell and buy cheaper (but still decent) place, use rest of money to generate income and live off?

 

[Grant]

Sell and buy cheaper (but still decent) place, use rest of money to generate income and live off?

that is the most sensible option, but she is attached to the home where she brought up her (now deceased) son & lived most of her life with her (also now deceased) husband.

 

[Arthur]

What an awful position to be in.

She really has few options. One or more of the following:

1. Sell and move into modest premises. But don't expect to pull more than 5-7% on R1m, which is R4.5-R5.5k a month. RSA Savings Bonds pay 8.25%.

2. Get a tenant, if feasible.

3. Employment or work.

4. Marry someone who has an income.

5. Receive a bequest or inheritance.

6. Win the lotto.

7. Apply for a government grant/allpay.

8. Rely on charity.

 

[HavocXphere]

that is the most sensible option, but she is attached to the home where she brought up her (now deceased) son & lived most of her life with her (also now deceased) husband.

2m house at 60 doesn't give her a lot of options unless she has some other reserve. No room for sentimentality here imo. I'd suggest taking a more pragmatic approach.

Being old is fk'n expensive...

Also...2 bar *apartment*? That must be some prime real estate...

 

[etwylite]

If their is noone to leave the estate to then consider a reverse mortgage as a way of freeing up equity in the property.
http://www.seniorsfinance.co.za/

 

[jerome000]

Yes equity release

 

[Grant]

If their is noone to leave the estate to then consider a reverse mortgage as a way of freeing up equity in the property.
http://www.seniorsfinance.co.za/

ok, this is what i was sort of thinking of

 

[Arthur]

Good suggestion.

 

[HavocXphere]

Colour me unconvinced.

Firstly...the suggested site says "unfortunately not able to consider new applications" which is well...open to interpretation. Secondly I don't see a reverse debt facility working out better than a straight sale. Its an option sure....but...lets just say I'd have misgivings about my parents entering into such an agreement.

 

[Garson007]

Sell, get life rights in a cheap retirement home and make sure you can pay the levy going forward.

 

[Grant]

Sell, get life rights in a cheap retirement home and make sure you can pay the levy going forward.

i suspect the very last thing she would want to do is hit "shady pines"

 

[etwylite]

http://www.saherpa.org.za/

Might provide more info. Nedbank also offer a similar product.

 

[Carol35]

i suspect the very last thing she would want to do is hit "shady pines"

Grant, moving into a retirement home does not mean you are on deaths door...my gran lives in a village that offers a host of things to do for active people, they have swimming pools, tennis courts etc etc etc, she should really consider it as a 5 year plan(from 65yrs). Most offer independent homes within the village so she won't be eating her breakfast with drooling 95yr olds. However, since she has no family to help her in her very advanced years, this will be a huge benefit to her as most offer nursing staff, carers etc. the waiting lists are long so if you are wanting to help her, you should urge her to just take a look at a few places.

 

[Garson007]

The problem is, if all her wealth consists out of just R2mil she can't afford a really nice retirement village. However, selling and renting will have her homeless when she is 70 - the worst possible outcome. She needs long term security. The only way she will get that is with life-rights and setting up a 'pension' fund with the rest of the money.

 

[Verde]

The reverse mortgage market in SA is not well developed which means there is not enough competition to ensure that consumers get an actuarially fair price. The industry preys on the ignorant. I advise people not to enter into these agreements unless they can independently verify if the price is actuarially fair. I have done many of these calcs and have never seen a fair deal, not even with American RM's where there is better competition.

 

[Garson007]

I'd also suggest moving to cheaper parts of the country, in the look for life-rights - like for instance George.