In the career of a professional, there inevitably comes a time when they must step away from their workplace responsibilities. Approximately twenty-five years ago, as individuals approached retirement, many contemplated the prospect of securing their own residence. However, the landscape shifted at the dawn of the 21st century. The introduction of affordable home loan options enabled individuals in their 30s and 40s to not only envision homeownership but to realize it as well.

Over the years, real estate has increasingly been recognized as a sound investment opportunity. Investors began to investigate tier-two and tier-three cities, as well as locations known for tourism, education, and religious significance. During this period, the idea of investing in ‘retirement homes’ gained traction. But what precisely constitutes a retirement home, and what are its characteristics and investment potential? Let us explore this further.

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What is a Retirement Home?

In recent times, the term “senior living community” is often used for retirement homes. “Simply put, retirement homes are housing projects consisting of homes designed and developed specifically for senior citizens. These projects are similar to regular apartment or residential projects but with a focus on the needs of the elderly. Common areas feature ramps instead of stairs, ample lighting, and communal seating areas for gatherings. In addition, special care is taken to provide nursing and medical facilities,” informs Pradeep Mishra, CMD, ORAM Developments.

Such homes typically have an age requirement for residency. For instance, in some retirement homes, you can invest at the age of 40 or 50, but you can only use the property once you reach 60 or older. Now, you might wonder, will the property remain vacant during that time? The answer is no. Developers of these properties usually rent them out to others in the same age group, allowing you to earn a monthly income like any other property. When you reach retirement age, you can choose to use the property as you wish.

India To Become an Elderly Nation in the Coming Years

In his speeches, Prime Minister Narendra Modi often refers to India as a young nation. While it’s true that a large portion of the population is currently young or adult, today’s youth and adults will eventually age. In modern Indian society, elderly care has already become an important issue, and retirement homes are emerging as an attractive solution. The weakening of the joint family system and the rise of nuclear families have increased the need for safe and comfortable living options for the elderly.

“The demand for retirement homes is continuously growing, making it a lucrative investment opportunity. Moreover, investing in a retirement home offers not just financial benefits but also social and moral satisfaction. By ensuring the care and safety of senior citizens, investors make a significant social contribution, earning respect in the community and experiencing mental peace,” says Mishra.

A Source of Stable Income

As mentioned earlier, you can rent out a retirement home to earn a monthly income like any other property. Yes, the company or organization providing services at the retirement home does charge a fixed fee. Similarly, the agency or organization also charges residents for services like food, healthcare, and transportation, creating a win-win situation for investors, residents, and the service provider.

“If you plan to invest in such a property, understand that it’s not just about current income but also about future capital growth. I often say that the realty sector should be viewed as a long-term investment, and given the current trends, the demand for such properties and projects is expected to increase in the future. One reason is that the fast-paced metropolitan lifestyle leaves the younger generation with little time for their elderly and experienced relatives. In such an environment, living in these communities with peers of the same age allows the elderly to spend their time well,” says Mishra.

Tax Benefits

Investing in a retirement home provide numerous tax advantages for investors. The government offers a range of tax exemptions and incentives aimed at promoting elderly care. As a result, those who invest in these properties can benefit from significant tax savings.

Investing in a retirement home, thus, can be a profitable and stable source of income. With growing demand, stable income, long-term capital growth, social and moral satisfaction, and tax benefits, it stands out as an attractive investment option. If you’re looking for a safe and profitable investment, investing in a retirement home at a good location and developed by a builder of repute could be an excellent choice for you.