Why a Land Lease Home in a Lifestyle Community may be a Good Investment

Check out THE NEXT CHAPTER - CHANGE THE MINDSET, CHANGE YOUR LIFE - CHECK IT OUT HERE 
For a Short Preview - CLICK HERE   
To buy the book -  https://www.thenextchapter.fyi/buy-book

Transcript

Copy Transcript Copied

Why a Land-Lease Homes in a Lifestyle Community May Be a Good Investment

Hi and welcome to The Next Chapter podcast… where we delve into another of the 130+ topics in our new book. You know… if there’s one thing Monika and I have learned… both personally…  and through the thousands of hours of face-to-face conversations with our clients over the past 30 years, it’s that…  in life, what happens to us and around us may not be our choice, but how we respond always is… if we change the mindset, it will truly… change our life.
 
In todays podcast titled “Why a Land-Lease Home in a Lifestyle Community May be a Good Investment” we’re going to delve into another challenging and often misunderstood topic…. and that involves balancing those Next Chapter lifestyle priorities of health, relationships, finances, our unfulfilled Bucket List items we still hope to experience… and what our legacy will be after we’re gone. 

To provide some context for this subject, I’m going to share a segment from our newest book… The Next Chapter…  which is a composite of client experiences gleaned from thousands of hours of face-to-face conversations with clients… both single and couples who were struggling with the trade-offs associated with letting go of their family homes… full of memories, but the maintenance had increasingly been less fulfilling.

So let me introduce you to Don and Ruth. Like so many couples who weren’t sure what they wanted to do, although they had been retired for several years, so far they hadn’t made any decision on their next steps. While the ongoing cost to continue living in their family home was concerning, their biggest disappointment was how isolated they now felt. The neighbourhood that had been so comfortable for thirty-nine years and seemed the ideal place to grow old… wasn’t feeling that way anymore.

When Mrs. Benson across the street fell and broke her hip, that had been the beginning of the end. Then, when several of the other long-term residents on the street had sold, things just didn’t feel the same anymore. The “Sold” sign on Mrs. Benson’s house had been replaced by a big yellow bin in the driveway and within hours, the house was empty. It seemed like almost everything from her lifetime in that family home was either in the bin or carried away to the nearby Habitat for Humanity ReStore. Very little, it seemed, had been packed up and kept by any of her family members.
 
 

The new owners turned out to be renovators, and within sixty days, the little house with lots of little rooms was now open concept and looked like all the other renovated homes—a new white kitchen, quartz counters, new bathrooms, windows, furnace, doors, and shingles. And before Don and Ruth knew it, there was another “For Sale” sign on the lawn. Then a few days later, it, too, read “Sold.” Although the improvements made the home quite striking, it just seemed to have lost that comfortable, homey feel they’d come to enjoy.

First came the moving van one morning, and within hours, Don and Ruth saw their future unfolding…one they hadn’t planned for. Moving in was a professional couple with fancy cars, two noisy dogs, and a lot of friends. The hot tub arrived, and two days later, the pool company started work in the backyard. 
 
 

But that was just the beginning — it seemed that after that, each house on the street that came up for sale was bought by folks Don and Ruth couldn’t relate to either. Their world was being rocked, and they didn’t know what to do.

At church one Sunday, they met a couple who were visiting. Being friendly and engaging, Don and Ruth asked the visitors to breakfast. As their guests, Bill and Nancy, shared a similar experience and what they had chosen to do in response, the lights went on for Don and Ruth that they, too, were going to be moving. But where? 
 
 

Bill said they’d been in a similar situation until they discovered the adult lifestyle community they were now living in. Nancy said they had been able to sell their modest home and buy a comfortable, modular two-bedroom in their new community, near the pond and the rec centre. While it was roomy, there was no basement, so there was not a lot of room to store much “stuff.” 

Bill went on to say that they had initially been concerned because they owned the house but were leasing the land it sat on. When Don asked if that was expensive, Bill explained that their Realtor had asked them to detail the cost of maintaining the family home they were selling including property taxes. Then they compared this with the maintenance cost of the home they were considering buying in the lifestyle community and found that the cost of the home was significantly less as they were not buying lot it sat on. 

And athough the costs may vary by community, in their case, the “maintenance fee” which included the Land Lease & taxes was approx. $800.00/month. These fees covered road maintenance, garbage collection, snow plowing and while it did not include shovelling of their parking space or their walkway, there was a local contractor who provided this for a very affordable fee.

One of the aspects of downsizing meant becoming minimalists… and this had been tough for them, as they had their respective “collections and treasures,” but after having emotionally let these go, they later agreed it had been incredibly freeing.

Now Ruth looked at Don as she thought of her grandmother’s fine china, her parents’ dining room suite, and those knickknacks she’d dusted for years. Don quietly said, “She’s going to have to sleep on this one.” Nancy said she’d felt the same way until a friend suggested they “digitally” capture all their treasures and make a video of them. She’d had no idea how easy it was until she tried it with her smartphone—first she filmed them and then emailed it to herself. 

Now, instead of dusting her treasures, she could flick on the video and visit all her heritage pieces, each in their place just as they had been in her old life. The memories had been retained, even though the stuff was all gone. And when she and Don had passed, the USB thumb drive with the videos of the family’s heirlooms could be shared with all their family. Wow, that was easy!
 

Now there will always be trade-offs but fortunately, having done their homework before they had moved, Nancy and Bill shared what they’d learned about the pros and cons of making this type of move. They left Don and Ruth with a few things to think about and research before deciding this was for them:
 
 

• The first was … how far is the lifestyle community from their family, shopping, their doctor, the hospital, and other support services? As these communities are typically not in town or near public transit, as they aged, they may need to move again when their ability to live independently and drive diminishes.
 
 

• Next, as mentioned previously, the purchase cost may be more affordable than a small home and provide more access to the outdoors than a condo, the monthly maintenance of approx. $600–$900 per month seemed quite reasonable when compared to the cost of condo maintenance or upkeep on a even a small home. 
 
 

• Unlike a condo, grass cutting and property maintenance of their model may not be included, but as park covenants (rules) for each community may vary, it’s important to have your lawyer review these in advance so you know what you’re committing to.
 
 

• The community centre always has activities going on with endless opportunities for socialization, so there’s lots to keep you busy, but Nancy had advised them to take it slowly until you get to know the politics and who the gossips are. 😊
 
 

• Being able to lock the door and go away for a few days, weeks, or even months is a relief; just have someone check your home every few days for insurance purposes.

The concept seemed interesting to Don and Ruth, so when Bill and Nancy called a few days later to chat, they invited Don and Ruth to visit their community… and over the coming months, with the help of family, other friends, and their realtor, they made the decision this was right for them too.

So, we hope you enjoyed Don and Ruth’s story as it touched on many of the questions and concerns related to adult lifestyle communities as one of the lifestyle choices available to downsizers. Now let’s look at some of the other things to consider while mulling if this lifestyle option is for you.

When considering that next move, whether you choose a condo, a smaller home, or an adult lifestyle community, the bottom line is to do your homework. Always, always… choose the neighbourhood or adult lifestyle community first…  one that is well located and offers the type of accessibility and amenities that will allow you to stay there for as long as you’re able to live independently.

Next, choose the street or building (if it’s a multi-unit townhome or condo building) you are most attracted to. And remember… once you buy, if you don’t like the neighbours, no matter how much you enjoy your home, you can’t pick it up and move it. Then, and only then, is the time to choose which house, unit or suite to buy. Doing it in any other order can result in making a mistake… by getting emotionally attached to a house or suite and later finding you dislike your neighbours or the community can be costly and disruptive to correct.
 
 

The next question is whether it’s a fit for your lifestyle expectations? An adult lifestyle community typically refers to either an age-targeted or an age-restricted building, complex or home park and typically is designed for people aged fifty-five or older. If this resonates with you and you enjoy being among folks of a similar age, this may be for you. And, when considering all the options, one of the hundreds of these adult communities scattered throughout Canada and the United States may be an excellent choice.

As with all significant decisions in life, it’s important for each person or couple considering such a move to carefully analyze the costs, the benefits, and the type of homeowners who are attracted to such communities. Then… determine if this is compatible with their short and longer-term goals…and your individual needs. While it may be difficult to try this before buying, it is highly recommended to visit with friends or acquaintances who may currently live in one of these communities. Where possible, some have even chosen to rent in one of these communities for a season as a trial run, if rentals are allowed.

If your Big Why for moving includes socialization… being active… or having a calendar of daily organized activities to participate in… while still having the freedom to just “be” in the privacy of your own home, one of these lifestyle communities may be the right answer for you. And for snowbirds, many are owners in two of these communities - both a summer home in the North and a winter home where it’s warm.

Being able to turn off the water and close up the house for the winter gives you the freedom to travel at will, without the concerns of maintaining your home year-round. Although the turnkey condo apartment is appealing, it typically lacks the organized activities and facilities, like a workshop where a person can tinker or perhaps a small flower bed.

The right answer for each person or couple is the combination of price, location, as well as nearby amenities (including transit, hospital, shopping, and other services), and while others can offer advice, this ultimate decision has to be a personal one by those who will be living there.

Homes in these adult lifestyle communities tend to be either detached, semi-detached, townhomes or apartments. Depending on the price point of their targeted audience, these typically range from 800 to 2,000 square feet with limited property and no fences. Homes are usually available in two or three-bedroom models, and depending on the age of the community, the older models may not have open-concept floorplans, walk-in closets or an ensuite.

Those who are considering an adult lifestyle community often ask what type of features they can expect. And the answer is they are often designed for complete single-floor living with main-floor laundry facilities, master bedroom and bathroom, but often there’s no basement. 
 
 Features typically include:

• Few, if any, steps to get into the home

• Toggle/rocker light switches

• Lever handles on doors

• Shower stalls with seating vs bathtubs

• Wider doorways (to accommodate walkers and wheelchairs)

• Features that accommodate age-related conditions like arthritis

• Exterior finishes are planned to require little or no maintenance

• Monthly Home Owners Association or maintenance fee may include:

– Landscaping

– Yard maintenance

– Snow removal and garbage collection

Active adult communities feature amenities consciously planned into

the community, including but certainly not limited to:

• Open space or parkette within half a block

• Recreational facilities including walking trails and parkland

• A lifestyle centre or clubhouse—these communities emphasize clubs

and activities

• Resort-style amenities that may include:

– Indoor and/or outdoor heated swimming pool

– Whirlpool tub, steam and/or sauna rooms

– Separate facilities for aerobics and weight training

– Rooms for cards, games, and billiards

– Community or party room with a commercial kitchen

– Facilities for tennis, golf, shuffleboard, bocce, pickle ball and more

– Clubs and activities focusing on scrapbooking and other crafts
 
 

The final word on this topic is simple… knowing your Big Why for choosing to make a move, what your lifestyle expectations are having summarized your must haves and what you are willing to trade off to have these will allow you to be open to the options as you do your research. 

Change is always daunting… and even more so with each passing decade. But having a written plan can make the journey so much easier and allow you to look back and understand the thought process along the way… you know, on those days when you begin to doubt yourself.

Thanks and this is Robert and Monika signing off and inviting you to reach out anytime with questions. We’d love to hear from you and welcome your feedback. We hope you’ll join us for the next episode of The Next Chapter podcast.