Considerations Before Buying Into an Adult Community
July 22, 2015 | Enjoying Retirement
Baby Boomers may be aging, but they’re still calling the shots when it comes to setting housing trends. That’s the conclusion of a recent survey by The Demand Institute, which found that many older Americans are going “off script” when it comes to deciding where to live in retirement.
In fact, the conventional wisdom that Baby Boomers will trade their McMansions for a quiet condo somewhere warm is no longer entirely the case. This generation, known for their trailblazing spirit, is marching toward retirement with big plans and no desire to slow down. As they consider their living options for the future, it’s not surprising that a growing number of older Americans are looking to active adult communities as the next place to call home.
These communities, which cater specifically to the needs and wants of the over-55 crowd, provide the advantages of homeownership without the hassles of maintaining and tending a property. More importantly, they offer a large range of amenities, including fitness classes, biking/walking paths, swimming pools, social and cultural opportunities, and enrichment classes that make them feel more like resorts or adult summer camps than the stereotypical old-folks’ home of the past.
How do you find the right active adult community to meet your specific needs and preferences? Here’s a short list of steps to consider:
1. Set priorities. Tired of the hassle and upkeep of a large home, many individuals and couples in their 50s and older are looking for the ease and convenience that active adult communities provide. But keep in mind: These communities are anything but standardized. Whether you’re looking to downsize to a place that offers stress-free independent living close to your family and friends or want to retire to a community in a warmer climate where there are lots of opportunities for socializing and other activities, there’s an active adult community that will suit your needs. The key is figuring out what’s most important to you and looking specifically for that type of arrangement.
2. Know what you’re paying for. For communities that offer a choice of amenities, understand which are included in your monthly fee and which are extra. This includes everything from tennis and greens fees to exterior yardwork and laundry service.
3. Study the community financials. To understand how a given community focuses its resources, carefully review the financial records of the homeowners’ association. Specific things to look for are the stability of homeowners’ dues, the community’s cash reserves, its maintenance history, the frequency and amount of any assessments, and any legal settlements. These all provide clues to how the association is run, its financial strength, and the likelihood that you may face unplanned costs of ownership down the road.
4. Research the rules and restrictions. You may be drawn to the idea of living in a place where outdoor maintenance and activities are handled for you. However, you’ll want to check to see if the community has any special bylaws or covenants, conditions, and restrictions (CC&Rs) that might potentially impact your lifestyle. For example, some communities limit the age of people living in the community; others have hard-and-fast rules about pets and whether you can rent out your home for all or part of the year. Be sure to thoroughly research these property guidelines ahead of time.
5. Get to know the neighborhood. Take time to get a feel for the personality of the community you’re considering and your prospective neighbors. Talking with some existing residents will give you a sense of how easy it may be to make new friends and to become active in the community. One question to consider asking: How much of the year do residents typically spend living there? You don’t want to move in only to find that your community clears out in the winter (or the reverse).
6. Explore estate planning implications. In some adult communities, you own your unit; with others, you buy into the community. This can impact your ability to sell your unit down the road. Equally important, the structure of ownership and other rules and restrictions may also impact your heirs. For example, if you leave your unit to your son, and he’s 45 when he inherits your home, he may be too young to live there. If the community also restricts rentals, your son then may have no choice but to sell the unit.
Most importantly, check out a number of different active adult communities before you make a decision. Each visit will provide new insights into what amenities are most important to you and which activities are must-haves for this next exciting phase of your life.