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How We Compare

Comparison of our next-generation model to the industry standard

Part 1 Comparison of terms

Karaka Pines - Next Generation Model Industry Standard
Capital Gains
Belong to the resident
Are retained by the Village operator
Deferred Management Fee
Options given to residents:

- Upon sale of your unit, paying 12.5%, or 25% (with fixed weekly fee), deducted from the sale price.
Range from:

- 20% to 30% of the purchase price

- The fees are deducted from the entry price
Weekly Fee
Options given to residents:

a) Standard: Covers all Village operating costs, staff, rates, insurance, maintenance, and legal. Range from $125 to $180 per week varying by village. These do change over times as costs rise.

b) Fixed Fee: $100 per week fixed for life (but tied into the 25% DMF)
Range from:

- $125 to $180 per week some operators offers a fixed fee option
Refurbishment of Units
Is the responsibility of the resident. Must be restored to "as new condition".
KPV undertakes this on behalf of the resident and deducts this from the sale proceeds.

The resident gains all the benefit from the increase in the sale price.
Is the responsibility of the Village operator. The Operator benefits from the increase in the sale price.
Village Maintenance Sinking Fund
Village maintenance is the responsibility of the operator and this cost is included in weekly fees.
Is not compulsorily required and provided from the Village operating cashflows
Hospital Level Care Services
Not provided by the Village but accommodated by nearby independent operators.
Provided on site by the large operators but not generally by independent operators

Part 2 Financial comparison (A real financial comparison - having spent 6.7 years in a village.)

Karaka Pines - Next Generation Model Industry Standard
Purchase (2011)
$445,000
$445,000
Sell Price (2020)
$785,000
$785,000
Deferred Maintenance Fees
Options given to residents:

a) Standard: 12.5% of sell price paid at the end = $98,125

b) Fixed outgoings: 25% of sell price paid at the end = $196,250

Range from:

20% = $89,000

30% = $133,500
Capital Gain Lost
Nil
$340,000
Weekly Fees
Options given to residents:

a) Standard: Actual average $145pw = $67,860 over 9 years

b) Fixed Fee: $100 per week fixed for life = $46,800

a) Standard: Assumed average $145pw = $67,860 over 9 years

b) Fixed Fee: Assumed $100 per week fixed for life = $46,800
Refurbishment of Units
Is the responsibility of the resident, must be restored to "as New Condition"

Actual cost more like $35,000
Nil
Balance Paid to Resident on Exit
Sale Price – DMF - Refurbishment

a) Standard: $651,875

b) Fixed fee: $553,750

Buy Price- DMF

20% $356,000

30% $311,500
Total Cost Over Life in the Village for Resident
a) Standard: $200,985

b) Fixed fee: $278,050

20% Not fixed $496,860

20% Fixed $475,800

30% Not fixed $541,360

30% Fixed $520,300

An example of how capital gained worked for our residents.

“David and Anne* bought at a Karaka Pines Village in 2012 for $435K. In 2019 David needed to move into a care facility. So they sold their home for $727,500 and spent $636,500 on a serviced apartment at the care facility for Anne, leaving them enough to pay for David’s care.

If they’d been living at a village operating under the standard model, they would have ended up with only $304,000. Anne would not have been able to afford to move to be with David.”

*Names changed to protect their privacy.

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You Have So Much More to Gain

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