Should I Buy a Home in a 55-Plus Community?

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Welcome to the “2-Minute Money Manager,” a short video feature answering money questions submitted by readers and viewers.

Today’s question is about where to retire; specifically, whether a home in a 55-plus community is a good idea.

Watch the following video, and you’ll pick up some valuable info. Or, if you prefer, scroll down to read the full transcript and find out what I said.

You also can learn how to send in a question of your own below.

For more information, check out “2-Minute Money Manager: Should I Rent or Buy a House?” and “How to Choose the Best Retirement Facility for Yourself or a Loved One” You can also go to the search at the top of this page, put in the words “home” or “retirement” and find plenty of information on just about everything relating to this topic.

And if you need anything from tips on finding the best mortgage to finding the best financial advice, be sure and visit our Solutions Center.

Got a question of your own to ask? Scroll down past the transcript.

Don’t want to watch? Here’s what I said in the video

Hello, and welcome to your “2-Minute Money Manager.” I’m your host, Stacy Johnson, and this answer is brought to you by Money Talks News, serving up the best in personal finance news and advice since 1991.

Today’s question comes from Kim:

“I was wondering if it is good idea to purchase a home in a 55-plus community. I hear that they are difficult to sell and don’t retain their value.

In some ways, buying a home in a retirement community is like any other home purchase. But in other ways, it’s not. Here are a few tips:

Before you buy, think sell

In her question, Kim says, “I hear they are difficult to sell and don’t retain their value.” Well, as with any home, that’s going to depend on supply and demand, the specific community and the individual house.

Fortunately, checking historic prices is relatively easy to do. If you’re looking at a house, search the county records online, see what it’s sold for in the past, and get an idea of whether the trend is up or down.

One of the main things that drives price appreciation in any kind of housing is expanding demand with limited supply. Is the population of the area increasing? See a lot of building going on? These are good signs.

Keep in mind that until a community is completely built out, as a seller, you’re competing with the developer. That could put a lid on appreciation. For example, it’s going to be hard for you to sell your house for $200,000 if the developer is selling identical new homes for $180,000.

And before you buy, be sure to check any selling restrictions. Some communities force you to use their real estate agents. Others may prohibit putting signs in the yard. Many will require your buyer to be screened for age, finances and health before you can sell to them. In short, before you buy, see what the deal is if you should decide to sell.

Other tips

  • Rent first. Hopefully it goes without saying, but wherever you consider buying a home, unless you’re intimately familiar with the area, rent first. Nothing beats experience with a community before becoming a permanent member.
  • Buy in the off-season. If you’re moving to Florida or Arizona, you’re going to get a better deal in July than you will in January.
  • Check the taxes. Some states, like Florida, don’t have state income taxes. But they do have high property taxes.
  • Review the financial records of the homeowners association. The last thing you want is to buy into a community that’s bleeding cash or about to approve a giant assessment. Visit their office and ask a few questions.
  • See what’s going on. When you retire, you’ve got more time on your hands. What will your community provide to occupy you?
  • Research the rules. You know your community has age restrictions, but that could be the tip of the iceberg. Do they allow pets? Smoking a cigar outdoors? Street parking? Talking on your balcony after 10 p.m.? You may be amazed, and turned off, by the restrictions you encounter.

Bottom line? While buying a home in a 55-plus community can be like buying a home anywhere, there are differences. As I’m fond of saying, always do checks before writing them.

Hope that answers your question, Kim. If you have a question of your own, do what Kim did: Simply hit “reply” to any of our email newsletters and fire away. I answer as many as I can.

Not getting our newsletter? Fix that right now by going to Money Talks News and subscribing. It’s free, takes five seconds and is going to make you richer.

I’m Stacy Johnson. See you right here next time!

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The questions I’m likeliest to answer are those that come from our members. You can learn how to become one here. Also, questions should be of interest to other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and I’ve also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Got any words of wisdom you can offer on today’s question? Share your knowledge and experiences on our Facebook page. And if you find this information useful, please share it!

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