You or someone you know may be one of the generation of people aged 55+. And you might be thinking about downsizing or moving to a 55+ community.
Here, we orient curious readers with the pros and cons, and go over the deed restrictions to understand before and after buying in.
Retirement (55+) Community: What’s It All About?
People buy into retirement (55+) communities for a number of good reasons. Those who are happy with their choice will acknowledge the drawbacks, too. Here are some factors in the balance.
The Pros
Some 55+ homes are engineered to meet buyers’ age-in-place goals. Many have special equipment and accessibility features. We can’t speak for every community designed for retirement-aged buyers, but many of them appeal to seniors who:
- Feel comfortable among their peers in quiet settings. No cars blasting radios, fewer kids throwing balls or setting off fireworks, no loud parties…
- Prefer to let someone else (hired by a homeowners’ association, or HOA) handle the property maintenance. Many (not all) 55+ communities take care of the roof and land maintenance, while the unit owners handle their individual electricity accounts, as well as HVAC and appliance replacements.
- Wish to travel and want to live in a place that’s safe and sound when they’re out of town.
- Wants to sell a home and use the built-up equity to pay in cash for a 55+ unit, avoiding new mortgage debt.
- Wants to move into a compact space and pay relatively low property taxes.
Property tax hikes are adding up in this high-cost housing environment. But watch for tax breaks like those that went to New Jersey, Maryland, and Pennsylvania seniors.
Today’s buyers can be surprised by the prices. That’s why AARP®, New York Life®, and some other groups offer insurance — to guard against unexpected costs of assisted living. Senior housing is becoming a great deal more expensive to create and manage in our current decade.
The Cons
Some of the things that frustrate residents of 55+ properties? Taxes, insurance, and association dues can and do rise. (Of course, price hikes and inflation impact renters, too.)
And while some buyers won’t care either way, others could be surprised at the typical age at the community they buy into. 55+ is a wide range! If having a specific peer group matters to you, then, you’ll want to visit the place before buying in. Check out its social media presence to find out if most people are in their 50s-60s or in their 70s-80s. You’ll also be able to sense the community’s friendliness and its degree of diversity and inclusion.
Most members of 55+ populations lead their own lives, separate from other residents. That said, some 55+ environments have so many amenities that they resemble their own little towns. For those interested, there are game nights and movies, exercise and sports, meeting rooms and libraries. There are volunteer opportunities as well. Some owners decide to run for positions on the board, so they can help manage their properties.
Some seniors no longer work outside of their homes, and stay focused on where they live. This is a two-edge sword. They tend to keep watch over the property. Yet they may come off as busy-bodies where people live close together. They might create rules about everything — from what can be on the patios, to pet restrictions, to permissible holiday decorations, how long visitors may park, and so on.
It’s no secret: HOA dynamics vary among properties. For some people, the spending decisions and HOA fee increases just feel too unpredictable. Those who like the privacy and autonomy of owning a freestanding home should understand that moving into an over-55 setting could be a difficult adjustment. Some people prefer to make their own decisions about landscaping, decorating, shades of paint… Communities with a lot of seniors might resist natural aesthetics. But not always! Some have active garden clubs that take their mission seriously.
Deed Restrictions Limit Ownership Rights, Resale, and Inheritances
Buyers who’d like to rent out their units or have long-term guests: check the deed!
Depending on how the title is vested, buyers want the ability to pass down the value of their unit through a will or trust. They need to know if they’re buying into a property that adheres to federal rules, as laid out in the developer’s original agreement. Check the property’s Rules and Regulations to find out:
- If at least one person who is 55 or older occupies 80%+ of the filled units, are the property’s age rules flexible?
- Is there an age minimum (often 18 or 21) for residents? What are the exceptions?
- Are the owner’s grandchildren allowed to stay, or does that depend on their ages?
- Do residents under age 55 need to share a unit with someone who’s at least 55?
- Would heirs (under age 55) have to transfer the deed to older owners?
Before signing any paperwork, potential buyers should go over the restrictions on who can come as a guest and for how long.
Co-owning? Know how you and your co-owner want to vest your unit’s deed. If you choose rights of survivorship, the unit will bypass probate. If a couple owns as tenants in common, each person should designate their beneficiary through their will. A lawyer in the property’s state can explain the probate process.
Retirement Living Is Simply One Option
And there are plenty of alternatives to 55+ communities for people approaching older adulthood. Paying off a longtime mortgage can mean coming away with profits that open up appealing pathways ahead for downsizers.
Senior homeowners can be vulnerable to inappropriate pressure to transfer the homes they currently own. No matter what anyone promises or intends, once you quitclaim your home to someone else, you no longer have legal control over it.
Rent or buy a condo at a 55+ community? Independent living or life plan? Age in place?
Some older adults swear by the benefits of multigenerational housing.
Then there are co-ops. The senior co-op model could make sense for people who prefer direct decision-making power (rather than a few people making decisions for everyone else). Co-ops have shared deeds. That is, the residents are shareholders. They have the power to transfer their shares, although there are age-related provisions and sometimes transfers have to go through an approval process.
A flexible perspective can help smooth out the rough spots in the buyer’s journey. And at the end of the day, it’s the people who make the community worth moving into. Buyers might want to spend some time hearing from current residents before making a decision.
We wrap up with our usual reminder: Consider this article informational only — an overview of some of the most common experiences people have with retirement communities. Deeds.com does not provide legal or financial advice. A local professional can offer guidance that applies directly to each person’s or household’s situation.
Supporting References
Deeds.com: What Today’s Senior Home Buyers Should Know (Aug. 26, 2022).
Deeds.com: Age-Restricted Communities: How They Affect Your Real Estate (Dec. 1, 2019).
Deeds.com: What’s Best in Retirement: Owning or Renting? (Nov. 13, 2023).
And as linked.
More on topics: 55+ communities, deed restrictions
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