10 Questions To Ask Before Buying In An Active Adult Community Brought to you by
How far is too far? Will I be too far from family & friends? In our experience the #1 reason for an unsuccessful retirement move is that the person moved too far from their families and/or friends. Your children and grandchildren exert a very powerful tug so before you move too far away, carefully consider how you will deal with that. Many people initially believe that the Southeast and a warmer climate is their #1 priority. Then they come to realize that they are too far away for the kids to visit or that the 1-2 days it takes to get back North are harder than they thought. Now for the question of how close? Too close and you can feel like the proxy daycare center. So you might not want to be too close. Often this issue is solved by being just the right distance away. 1
2 Will I make friends? Have You Met the Neighbors? You can get so focused on the fancy clubhouse or the decorated models that you forget that the Community & lifestyle is as important as the bricks & sticks! We re talking about the idea of a good fit --do you have a good feeling that you will make friends & fit in? How do you get a feel for an intangible like fit? Attend events where current residents will be participating. Ask your Community Representative to schedule a lunch with some residents. Schedule a tee time or other activity with some residents.
Can I afford it and is it worth it? 3 4 How much will all these Things Cost? The fancy clubhouse and fitness center are often significant influencers in making a buying decision The monthly fee may even seem really attractive. Take the time to check out the finances for the entity supporting these amenities and find out how much support the Developer is providing. Initial pricing can be attractive but may be based on getting enough members quickly to take over the load. There are many examples of amenities that went from being amenities to becoming an albatross to the members. If I pay for all this-- will I use it? There are two models for paying for Amenities: All-inclusive or a la Carte The most common is all-inclusive for one fee you get all the services that are offered. In that situation the more you use, the better the deal. In a la Carte there are usage fees fairer for those, for example, who live in a golfing community but don t play. All-inclusive is usually more expensive but has exclusivity of use while a la carte may cost less but mean that residents will share access with the public. A good compromise is a la carte with preferential access to the amenities.
5 What are my goals? What Do You Want to Do? One of retirement s beauties is that you get a fresh slate to try new things. As an exercise, write down a Bucket list of the 10 things. If one of your goals is to spend more time with your children or grandchildren, don t move too far away from them. If you want to collect seashells, stick close to the ocean. if getting a daily dose of culture is important to you, then you better scope out a large city or university town. Then look at the Communities you visit: Are there established groups in the Community with some of the same interests as you? If Yes, try to attend a meeting it s a great way to see if there is a fit.
Can I afford it and do they care? 6 7 What About Cost of Living? Look for a Less Taxing Life. A few states like PA, don t tax Retirement Income of any kind. For your 401K, that means that it wasn t taxed when you were working and it won t be taxed in retirement either. What about Local Real Estate Taxes? In the future, local taxes will become a bigger factor as state & local governments are faced with a larger share of costs and the escalating cost of employee benefits. Are there any Surprises you should know about? An example is the cost and availability of flood & casualty damage in many coastal areas. Where will the Developer be when the Community is Sold Out? Most Communities have Developer support for amenities, i.e. the Developer covers a part of the costs of amenities, etc. until the Community is Sold Out. If a Developer is a large company developing many communities, at some point they will be gone and on to the next community. A few Communities are developed by hometown developers who live in the area or in the Community. Check out the Developer s history & background, e.g. do the Developer or any of the key people live in the Community?
Will they limit my options? 8 Will there be too many Rules to live by? Active adult communities need standards and safeguards to ensure that nothing detracts from the Community or harms real estate values. Too lax control can lead to disputes and result in conflicts and lower values. A more common problem is too much control and a situation where change and improvements are too difficult or frustrating and neighborhood friendships are strained. Look for that just right situation where neighbors feel there are controls but they are objective & fair.
Research is key >> 9 Did I do enough due diligence? Here are some of the most basic due diligence issues before they buy. The list of issues you need to check up on is long, and important. These include reading the Home Owners Association rules, studying its most recent financial report, getting minutes from HOA meetings, finding out about foreclosures and dues arrears, finding out what your neighbors are like, getting a fix on maintenance sinking funds, etc. If it s a new community there will be other questions how likely is it the community will sell out, what happens when ownership is transferred, what kind of obligations and assets will be transferred to the Home Owners association. Your realtor and attorney should be able to help you with all of these. Too many communities are having too many issues for you not to investigate everything carefully.
Is the facility fully built? 10 Are the Promises on the Premises? When the Community Salesperson starts talking about all the future things that you will enjoy, start to get very cautious! If the community doesn t have all the amenities in place or close to being in place, get skeptical and ask yourself if you would want to live there even if they were never developed. Look for development stability, and a self-sustaining Home Owner s Association. Know all the dues and fees to live in your community. Look for a low cost of living and feel like you are getting a good return on your fees.
Final thoughts >> Prices- Are you comparing apples to apples? When you see home prices advertised, make sure you know what s included and especially what s not! Prices are usually on a slab if you want a basement that will be $30,000 please. Prices are quoted for a zero premium lot seems like almost alllots have some kind of premium. What is the size of the typical lot? Most likely it s a lot smaller than you think, like only 60 or 65 feet wide! Look at what s standard and what is optional-there s a big difference between Anderson windows and windows from the Anderson factory! Buyer Beware!
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