Serviced apartments are exactly what they are called – an apartment or unit where you receive services ranging from cleaning, fresh linen and meals. Some serviced apartments also provide low-level allied care support.
The apartment may be smaller, usually one bedroom or a studio apartment, with a kitchen suited to light meal preparation only. The main meal of the day is normallyprovided in a communal dining room.
Serviced apartments are only available in retirement villages, with less than 25% of villages offering this form of accommodation.
They are ideal for people living on their own and becoming increasingly frail, experiencing difficulty in day-to-day living such as shopping and cleaning the house. You have your own space but with the companionship of others in the village. Plus you have built-in support and care management as your age advances.
Where some villages has an aged care facility on the same premises it is possible for higher levels of nursing support, such as changing bandages, to be provided in your apartment.
Operators of serviced apartments
A serviced apartment is a form of retirement village with the same contract, financial and regulatory requirements that apply. The difference is that there will be a charge for each additional service such as laundry, cleaning and meals.
The retirement village operator will provide services to you. You may also be eligible for government funded in- home care through the ACAT assessment program or through privately funded home care services.
Designed to support ageing
Serviced apartments are often physically designed to be age friendly – wider bathrooms, no trip hazards etc.
You rent. You don’t own
Your serviced apartment is like a retirement village unit.
You rent your serviced apartment with an upfront lump sum, which is in effect rent paid in advance.
You rent your serviced apartment with an upfront lump sum, which is in effect rent paid in advance.
This entry price for serviced apartments is considerably cheaper than a retirement village unit because you are receiving a significantly smaller dwelling.
Be aware that the average length of stay in a serviced apartment is four years compared to a retirement village unit which is between eight and 10 years.
The finances
The price of a serviced apartment varies from village to village and operator to operator, depending on its location and age. Expect to pay between $200,000 and $400,000 as your upfront lump sum payment (like rent in advance).
In addition you will pay weekly fees which will be relatively small – consider $50 per week.
You will pay for each additional service such as laundry, cleaning and meals. You may be required to have at least one meal a day in the community dining room or have your meals delivered to your room to make the kitchen a viable enterprise for the operator.
When you leave you will pay a Deferred Management Fee (DMF) which will be up to 40% of your entry lump sum.
For example if you leave a $300,000 serviced apartment after four years you will pay a 40% DMF fee or $120,000, which means it costs $576 a week to live in the serviced apartment.
The Contract
The contract will be similar to a retirement village contract.
We strongly advise you get legal advice on the contract so you understand the terms and you obtain the advice in writing for later reference by you and your family.
