Should You Move to a 55+ Community?

Few people can say that an episode of “Wheel of Fortune” changed the course of their life.

Susan and Mike Pappas were in the midst of planning their retirement, with plans to soon move out of Santa Cruz, California. Settling in to watch “Wheel of Fortune” one night, the couple saw Jimmy Buffett advertising his Latitude Margaritaville retirement communities. Susan was intrigued by how fun it all looked, and how it reminded her of their days traveling around to listen to live music.

“Oh my God,” she said to her husband, “doesn’t that look like our lives?”

Susan and Mike brought up the Margaritaville-inspired communities with friends, who flew out to the Hilton Head, South Carolina location and fell in love with the island vibe. Their friends purchased a lot that same weekend.

They warned Susan and Mike that lots were “selling like hotcakes,” and to decide right away if they were interested. So in May 2021, without having ever visited the state of South Carolina, the Pappases called the office and reserved their spot.

“We spent an hour and a half on the phone and changed our lives,” Susan says.

What are 55+ communities?

“Independent living,” “55+,” “active senior living” — this type of housing goes by many different names, and the list of attractions for seniors like the Pappases is just as long.

These communities differentiate themselves from assisted living and other medically focused facilities. Unlike assisted living, residents of over-55 communities may own their homes. They can also join a community of peers at a similar stage of life and, often, enjoy shared amenities like pools, dining and even theaters, as well as clubs or activity groups. Physically demanding responsibilities like yardwork and upkeep of these amenities, meanwhile, are shifted toward homeowners associations.

This can be an exciting proposition if you’re considering your next chapter and whether you want to age in place or explore alternatives. Evaluating the benefits and drawbacks of 55+ community living can help you determine whether it could be the right fit. If it is, you may have to prepare yourself for a long wait to get in.

Assess what the community offers, and what you may miss

Some senior living communities may have rules that clash with your lifestyle, such as excluding children under 18 or pets. Check whether the rules work for your household.

At least 80% of the other units will be occupied by someone 55 or older, according to guidelines established by the U.S. Department of Housing and Urban Development. So if diversity in age is something you treasure in your neighborhood, this may feel like a big sacrifice. And this is not the only area where diversity can feel limited — these communities can also be largely white.

Consider The Villages in central Florida, one of the largest retirement communities in the country with over 138,000 residents. According to 2020 Census data, 98% of their residents are white, with the next-largest group of Asian Americans making up just 1% of the population.

Living with neighbors similar in age can lead to unique opportunities for connection. But it’s important to ask yourself if you really feel at home in a specific age-restricted community.

Decide if HOA fees are affordable and worthwhile for you

HOA fees will vary. For example, at the Pappas’ community in South Carolina, they range from $250 to $317 a month. This covers lawn care and landscaping; access to amenities like pools, dining and fitness centers; and insurance and maintenance for common areas, among other costs.

Of course, traditional homeownership isn’t free either, even once you’ve paid off your mortgage. Tallying your monthly expenses and comparing them with the HOA fees in your desired community can give you an idea of the month-to-month financial difference in upkeep between a new home in a 55+ community and your existing property.

Consider the resale and inheritance implications

Many communities have deed restrictions that outline who can live in your home and under what circumstances. This could be complicated if you later want to sell the home, as the new buyers may have to adhere to the community’s age requirements. Restrictions on children or pets could make reselling even trickier if this becomes a sticking point for potential buyers.

Consequently, you’ll also have to review the HOA rules and consult with management when drafting your will. You may be able to bequeath the home to someone under the age of 55 if at least 80% of the other units are occupied by someone 55 or older, but only if the community’s bylaws are amenable to it. If they aren’t, your beneficiaries may be forced to sell the home.

Arrange to finance the purchase

Some buyers are able to finance their new home in a 55+ community with the proceeds from selling their current home, or other assets. However, if you need financing from a lender, you may find that future marketability is a point of apprehension. You may have to spend more time shopping around for a lender that’s willing to issue a loan for an age-restricted property.

Fannie Mae has specialty financing for senior housing, and the government-sponsored enterprise maintains a database of partner lenders.

Plan ahead — demand is high

Glitzy resort destinations like Latitude Margaritaville aren’t the only senior communities seeing units sell at a breakneck pace. According to Era Living, an operator of several 55-and-over communities in Washington state, a hopeful resident may face a wait of several months or even years; Era Living recommends joining a waitlist.

Competition among would-be buyers can be brutal.

Hailey Kate Chatlin’s grandmother owned a home in a senior living community in Kaysville, Utah. As her grandmother was dying in 2021, inquiries piled up.

Chatlin recalls, “One older gentleman came in and announced to the room, ‘I know that this is a really hard time and everything, but I have a brother who would love to buy this house as soon as it’s on the market.’”

Be patient, and ask about benefits for buyers on a waitlist. For example, Era Living extends some perks to future homeowners, like on-site dining and community events. This can help you determine whether it’s a place you can see yourself living comfortably in the long term.

While there are a number of trade-offs that come with moving to a 55+ community, the benefits continue to attract seniors looking for an active lifestyle. According to Susan Pappas, the risk she and her husband accepted when they reserved a lot sight unseen has already paid off tremendously. The place felt like home from their very first visit, when their lot was still just a patch of land.