Things to Consider Before Buying an Over 55 Home in a Retirement Community

Are you considering buying into a retirement community? Over 55 housing communities offer specific amenities to those who in or are nearing retirement age. Investing in a 55 and over neighborhood, like with anything in life, comes with its own pros and cons.

Where you are located can have a significant impact when buying in a retirement community. For example, the demand will probably be much higher in a state like Florida than it would be for Vermont.

You also have to keep in mind that these communities are much more prevalent in certain parts of the country than others. So, as always, there is always one factor that plays a huge part in whether or not a property like this is a good investment.

Location location location is a buzzword real estate agents talk about all the time, and for a good reason. It matters!

Let's take a look at some of the things to consider here before buying into a retirement community. Before you close on a home, you'll want to have a picture of what you'll be getting.

The Positives of Investing in This Type of Housing

There are quite a few positives that go along with buying a retirement community home as an investment property as long as you make the right choices. Put the location at the time of your list, and don't forget its importance when it comes to investment.

When people retire to their ideal place, they are usually concerned about the weather and the activities they would like to participate in. For some people, these things go hand in hand. You probably don't think about relaxing in a rainy climate like Seattle or a frigid wasteland like Alaska.

If you're like most folks, you probably dream about beaches, golf courses, and awesome sunny weather to take a relaxing walk at dusk. These types of amenities are on most retirees' minds, which is why choosing to be like-minded is vital.

By choosing a popular destination, you ensure that there will be demand from other folks desiring the same thing if you decide to sell at some point in the future.

A Great Community For Your Niche Buyer

People who are at retirement age want to be around people who get what they’re going through. They want people who are retiring just like them who are close by because then they can easily connect with new people.

So purchasing a home in a retirement community will make selling it much easier to your target niche. Again, this is something like the weather in the area. It’s a selling point that comes with the home without you needing to do anything.

Maintenance is Covered

When you own a property within the retirement community monthly, HOA fees will usually cover the cost of homeowner maintenance. Things like the exterior, such as the yard and landscaping, will be dealt with by professionals.

One of the things anybody loves is outdoor space, but maintaining it can put them off. Since it will be maintained by someone else, it is definitely a great positive.

For most people living with a homeowners association is a good thing, but there are times when it can turn ugly. If you get the wrong people making crucial decisions for the community, things can go south pretty quickly.

Unfortunately, you don't have a choice when it comes to accepting being in an HOA. You can't just choose not to be part of the association.

Amenities Are a Great Selling Point

There are many amenities available in retirement communities that are seen as a great bonus for retired people. If you like a swimming pool or tennis courts, these amenities are often found in 55 plus communities.

Things like exercise classes and education classes can be a great way for older folks to spend their day. There's always something to do in the community that will help meet new people with similar interests. You may even find the traditional bingo game being played as well.

The Property Will be in a Quiet Community

Many of these communities where the potential property might be are usually gated or at least not accessible to generic street traffic, which means that overall there is a quiet and close-knit community feel to these areas.

In addition, the average size of homes is about 1 to 2 people, so things are going to be fairly quiet, which is something any retired person would love after spending many years in a noisy neighborhood surrounded by young families.

Less Damage to Worry About

If you decide to rent out your over 55 home, you’re naturally going to be worried about how the tenants treat the whole place. There is a lesser worry to a degree because the renters will be over the same age group. It will be unlikely that young kids will be able to stay for an extended period of time.

This is something to double-check before you buy but is common in many retirement communities. You can expect less wear and tear under these conditions.

The Drawbacks of Investing in 55+ Housing

Although there are some great positives, we still have to talk about the drawbacks, so you know what you’re getting yourself into if you decide to invest in property like this.

You’ll Have to Pay The Monthly Fees Even Without a Tenant

If you find an opportunity to live elsewhere for whatever reason but want to keep your property as a rental, there are a few things you'll need to check. The first is whether you can rent it out. Some communities restrict rentals to a certain percentage of owners.

Even if it is allowed, you'll have to consider the fact you'll probably be the one who is paying the condo fees. Most of the time, they are not transferred into the lap of the tenant. If the fees are substantial, you could have a harder time making any profit from renting.

When you are in retirement, the last thing you'll want to deal with is a deficit each month. Obviously, if you’re on a budget, it could become very problematic down the line, especially if you want to upgrade another property, and all this does is then eat into these funds.

Niche Markets Aren't Always Ideal

Niche markets sound like a good idea because you know who you’re looking for when you’re trying to find a buyer or a renter for your own property.

The problem is that then you have a limited number of people that might want this property in the first place, which means it is much harder to sell - something that can be troublesome if you’re looking for a quick profit.

Fortunately, most people who are buying into a retirement community are not thinking about profits first. For many, it is their last stop in life.

Final Thoughts

Like any other major life decision, choosing whether to live in a retirement neighborhood should come with some serious thought. Make sure you do all the proper due diligence to ensure you'll be happy with your decision.