Retirement Communities Feel Economic Pinch
You could get a great deal
The slowing economy and battered housing prices have made life difficult for many senior housing communities and retirement homes, because retirees interested in moving in are having trouble selling their homes.
As a result, several companies are offering incentives to attract new tenants. In Minnesota, for example, one retirement home is offering $2,000 to pay for moving expenses or furniture, along with three months of free parking, meals or housekeeping services. Another is offering corporate-style relocation assistance to help would-be tenants sell their homes, the Minneapolis Star-Tribune reports. Other facilities are waiving fees, offering introductory discounts, or deferring rent payments or deposits until homes are sold.
If you or a loved one is considering moving to a senior or retirement community, ask about promotions or specials and negotiate firmly. But don’t just ask for deals. Ask for financial statements, too, which will show all the income and expense statements and balance sheets of the facility. Some communities are closing because there are too few residents.
Others are cutting back on services. Before you get enticed by the sales promotions, conduct due diligence to make sure your new home will be all that you expect. The provider’s disclosure statement should show how the facility would operate in the event of financial problems and should include escrow accounts, reserve funds and a description of how the money is invested.
If it’s a new facility, financial projections should be provided. Financial reports should be audited, and a history of annual fee increases should be provided. (Annual increases beyond living and medical inflation could be a sign of cash flow problems.) Find out if your entrance fee is held in an escrow account and when and how it can be released to the provider. Also, ask about occupancy rates. (Declining occupancy can cause financial trouble.) Meanwhile, it’s worth the trouble to find out if a facility is accredited.
The Continuing Care Accreditation Commission accredits continuing care retirement communities and other facilities on a voluntary basis. Lack of accreditation doesn’t mean a community is a poor choice, but accreditation means that it has met certain financial standards.
Once you have all the documents, ask your planner to review them. While there are deals to be had if you have the cash to buy in, you need to make sure you’re making the right decision — for your finances and your future.
You could get a great deal
The slowing economy and battered housing prices have made life difficult for many senior housing communities and retirement homes, because retirees interested in moving in are having trouble selling their homes.
As a result, several companies are offering incentives to attract new tenants. In Minnesota, for example, one retirement home is offering $2,000 to pay for moving expenses or furniture, along with three months of free parking, meals or housekeeping services. Another is offering corporate-style relocation assistance to help would-be tenants sell their homes, the Minneapolis Star-Tribune reports. Other facilities are waiving fees, offering introductory discounts, or deferring rent payments or deposits until homes are sold.
If you or a loved one is considering moving to a senior or retirement community, ask about promotions or specials and negotiate firmly. But don’t just ask for deals. Ask for financial statements, too, which will show all the income and expense statements and balance sheets of the facility. Some communities are closing because there are too few residents.
Others are cutting back on services. Before you get enticed by the sales promotions, conduct due diligence to make sure your new home will be all that you expect. The provider’s disclosure statement should show how the facility would operate in the event of financial problems and should include escrow accounts, reserve funds and a description of how the money is invested.
If it’s a new facility, financial projections should be provided. Financial reports should be audited, and a history of annual fee increases should be provided. (Annual increases beyond living and medical inflation could be a sign of cash flow problems.) Find out if your entrance fee is held in an escrow account and when and how it can be released to the provider. Also, ask about occupancy rates. (Declining occupancy can cause financial trouble.) Meanwhile, it’s worth the trouble to find out if a facility is accredited.
The Continuing Care Accreditation Commission accredits continuing care retirement communities and other facilities on a voluntary basis. Lack of accreditation doesn’t mean a community is a poor choice, but accreditation means that it has met certain financial standards.
Once you have all the documents, ask your planner to review them. While there are deals to be had if you have the cash to buy in, you need to make sure you’re making the right decision — for your finances and your future.
