Home Buying in a Retirement Community: Downsizing the Family Home

You used to be a family of five, but now the kids are all grown, and married with families of their own. You and your spouse have wonderful family memories in your current home, but the upkeep is getting to be too much and you no longer need or want all the space. You both always talked about purchasing a retirement home when the kids left, but don’t know where to start or what to consider.  

When it comes to senior living options, there are a number of housing options available for today's older adult population. While some older adults will require the care and attention of nursing homes or assisted living communities, there are others who don't require as much, or any, care, but who instead want to be in a community of their peers. These retirement communities can provide us with a great opportunity to meet and participate in activities with others that we need to live the healthy and balanced lives we deserve well into our golden years.

Retirement communities provide housing for active older adults who need little or no assistance, making them different from assisted living facilities, where residents are helped with day-to-day activities. However, they typically still have social events; options to utilize services such as laundry, transportation and housekeeping; and some may even have a community dining room available. Retirement communities also typically provide security and grounds maintenance to residents.

For many older adults, especially those that have spent years owning their own home, this can seem like an easy transition into new home ownership. However, there are a number of factors that should be considered when buying property in a retirement community.

Spend Some Time in the Community

The reason they are referred to as “communities” is because there is an emphasis on the community aspect of these homes. One of the main reasons people tend to choose retirement communities is so they can spend time with and enjoy being with their peers.

With this in mind, if we are considering purchasing a property in one of these communities, it is important for us to get to know the neighborhood and the neighbors that will come with it.  

We should also look into the last community meeting and ask for meeting minutes from the community board to see what issues may have arisen in the community before we invest in the property. This will give us a clear idea of how the community manages their issues.  

Look at Local Taxes 

Taxes should always be a central consideration when determining the cost of any property. Homeowners can reduce their taxable income by deducting interest paid on a home mortgage on their federal tax return. Making sure you have the right blend between the property taxes and advantages on income taxes can make or break how affordable, or how expensive a certain property is. When determining the cost of the property, you should consider the amount of property taxes you will pay annually. If your property taxes are too high, the property will not be a benefit to you every tax year, and the home could stand to be a liability to you instead of an asset.

Pay Attention to Association Fees

Most retirement communities come with swimming pools, community centers and a wide array of amenities for older adults to enjoy. Unfortunately, these amenities are not typically free. The fees associated with these amenities can range from a few hundred to a few thousand dollars per month. We should pay close attention to these fees and exactly what they cover so we can be sure we are not paying for amenities we have no interest in taking advantage of.   

Consider Care for the Future

Different retirement communities offer different amenities and features, and they may even offer some types of home health care. Planning for the future is always important with any housing decision. We should pay close attention to whether or not the community can offer housekeeping or meal services should we need them in the future, or if it would require us to hire outside professional care in situations where we are no longer able to completely care for ourselves.

Retirement communities are popular living options for many older adults, and the option to buy one of these properties can often be a great investment. However, taking a moment to look at some of the particulars of buying one of these homes as opposed to buying a traditional property or renting in a continuing care retirement community can help us and our families make the right choice about our upcoming living situation.