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"Active Adult 4 Less"
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In the current
economic times some of our savvy boomers and active seniors have
discovered ways to enjoy the active adult community lifestyle
for less. Some cost effective housing options that they have
discovered are:
-
Active adult
rental communities
-
Homes purchased
in conjunction with a land lease arrangement; and
-
Lease/purchase or
rent to own options within some active adult communities
As you reach your retirement years, typically income is reduced
from your peak earning years and it may make sense to use your
assets in other ways to your best advantage.
An active adult rental
community
gives you the option to enjoy the lifestyle and amenities that
the community has to offer without you having to bear the
expense of purchasing your residence. Age-restricted &
age-targeted rental communities are
available no w in a variety of lifestyles and dwelling options -
ranging from apartments to condominiums to bungalow or ranch
style homes. (Scroll down to see the links below for some examples of each).
A home purchased in conjunction with a
land lease allows you to own your own home for true
privacy and independence while keeping funds normally spent on
purchasing the land available for discretionary or emergency
purposes. In addition, when buying
into an active adult leased
land community, you have the assurance that community standards
will be carefully maintained (which is in the best interest of
the lessor) allowing you to enjoy the community social and
recreational amenities for less cost per month (versus the cost
of purchasing a home and lot together).
Of course there are some obvious advantages to owning the land
your house is on. However, in some communities, a developer can
take advantage of your desire for a prime lot location or unique
characteristics of a particular home site and put an over-value
price tag on it. Paying an over-valued amount for the lot also
subjects you to higher than necessary property taxes. It can
tie up funds that you can only get back by selling the land or
taking ou t an additional mortgage which may then subject you to
interest charges.
When you’re considering a lot purchase versus a leased
development lot, you need to consider the entire picture. You
need to look at your finances and lifestyle. Before you
purchase be sure you know if the utilities are installed,
whether there are sewer and water impact fees, what landscaping
(if any) is included, who pays for the clubhouse, trash pickup, street paving, tree trimming, etc. Those are important to know
whether you lease or purchase as improvements will be taxed back
to the land. In some communities, there may be several
different charges for different services. When you lease, the
services are usually all in one fee. Granted those fees can
increase yearly, but most lease contracts cap the yearly fee
increase, if there is any.
It is important to figure out what is best for you over a given
period of time – owning the land and paying the related fees and
taxes or having the availability of the cash and being able to
invest it or use it if you choose to. Remember that the
developer of a leased lot community has the responsibility to
fund the community’s repairs and maintenance forever. In an
owned lot community, the developer will transfer the operational
and maint enance responsibilities to the lot owners once the
community is built out.
Perhaps the biggest draw of a leased land community is that the
homes are a fraction of the price that they would be if the land
were deeded with it. In some developments, that can be 10’s of
thousands of dollars of savings. It allows for a wonderful lifestyle for
far less than if the land price was included. The links below
will show examples of a few of the myriad of land lease
communities for active adults.
More ways to get into your retirement
dream house now are a lease/purchase, a purchase
option (also known as a lease option), or a rent to own
contract. There are several reasons why a buyer might want to
enter into a lease/purchase arrangement. Some buyers may need
to resolve credit issues but want the home and the lifestyle
now. Others may need the time during the lease period to build
up their down payment so to obtain the
 best interest rate. Or,
it may be that the buyer is currently stuck in a home that isn’t
selling and needs time to get it sold.
A lease option is a way to live in a home for a period of,
say 1-3 years - depending upon the contract, before you have to
decide whether to exercise your option to purchase it or not. A
lease option may be especially poignant for people who are
moving far away so they can make sure the area (or the community
itself) is really right for them before jumping into buying a
home there. Generally, the seller will want the prospective
buyer to give them a non-refundable payment to “purchase” the
option to buy the property within a specified time. If properly
written, that option can be transferable.
There are several active adult communities we know of who are
currently offering lease/purchase or rent to own arrangements (Scroll
down to see
the links below for examples). |
