Retirement living in condos: The best way to spend your golden years

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If you're nearing the age of retirement, it's important to think about the next chapter of your life. Whether you want to stay in your hometown or move across the country to a warmer climate, there are more options available to retirees than ever before.

Condominiums are an increasingly popular choice, especially for people who are struggling to maintain a detached house but aren’t ready to live in a restrictive retirement home. From standard urban condos through to co-housing spaces and dedicated 55-plus communities, the condo lifestyle offers the perfect combination of independence and security.   

Retirees have a lot of options when it comes to condos. Standard condos include new and pre-construction condos, renovation condos, and existing condos on the second hand market. Age-restricted communities include rented co-housing, owned co-housing, niche communities, naturally occurring retirement communities (NORCs), and continuing care retirement communities (CCRCs).

Regardless of the community classification, condos offer numerous benefits over detached dwellings. Not only is the purchase price lower, the lifestyle and location are often much better, and you spend less time on maintenance. In many ways, condos are the ideal choice when it comes to retirement living. With the freedom to purchase your own apartment, and the ability to live in a community with people you can relate to, maybe condos really are the best way to spend your golden years.

What is a condo?

First and foremost, it's important to understand that a condo is a legal ownership arrangement rather than a type of dwelling. Retirement communities are the perfect example, with large high-rise condo projects available alongside townhouses, semi-detached homes, and even detached homes. Rather than a construction standard, a condo is defined by full ownership of the individual unit and shared access to common areas and assets.

While you own the interior of your dwelling outright, you don't own the exterior of the building or any of the surrounding land. While you have the legal right to use shared amenities and community spaces, you do not own these spaces and are subject to certain rules and regulations. Individual condo owners are also obliged to pay monthly condo fees in exchange for amenity access and building maintenance. Even though the official definition of a condo includes individual ownership, there are many retirement communities marketed as condos that include an alternative rental arrangement.  

Standard condos vs retirement condos

Before you start hunting for a retirement condo, it's important to distinguish between standard condo projects and dedicated retirement communities. A standard condo project has no age restrictions, with people of all ages and from all walks of life able to buy an individual unit and become part of the wider community. While some condo buildings are designed for specific age groups and market demographics, it is illegal to restrict ownership based on age alone.

In contrast, age-restricted or retirement condo communities only allow people in a certain age bracket to purchase condo units and become community members. In the United States, retirement condos are often called 55-plus communities, with a large percentage of all unit owners needing to be 55 years or older to satisfy the requirements of ownership. Also known as age-qualified communities, these projects have specific amenities and social support systems designed for older residents.   

While there has been some legal challenges to these agreements based on age discrimination, it remains legal to sell individual units on an age-restricted basis in most states. There is some flexibility, however, with some projects requiring at least one person of 55 years or older in each unit, and others implementing an 80 percent rule where 4/5 homes need to be occupied by someone of this age. While the 80/20 rule is common, this ratio is arbitrary from a legal perspective in some states and can be changed to meet the wider needs of the community.

What defines a retirement condo community?

Living in a condo can be a great way to enjoy your retirement and avoid the endless maintenance and other problems associated with owning a detached home. Condos are defined by a specific type of ownership arrangement, with retirement condos also including age restrictions, specific rules and regulations, and amenities and social structures designed for older people. While retirees can always buy a standard condo, a dedicated retirement condo is often the better choice.

Age restrictions

More than anything else, age restrictions are the one thing that defines a retirement condo community. Because ownership is limited to people in a certain age bracket, residents are more likely to feel comfortable and share values and worldviews with those around them. This has a number of flow-on benefits, with amenities designed for people of a certain age bracket, social clubs and activities more likely to appeal to retirees, and rules and regulations defined accordingly. As mentioned above, the 80/20 rule is common for retirement communities, which means at least 80 percent of all dwellings need to be owned by someone who is 55 or older.   

Amenities and common areas

Access to amenities and social activities are some of the main perks of condo living. This is particularly true for age-restricted communities, with people able to access common areas and assets designed especially for their age group. Examples of popular condo amenities include swimming pools, gyms, golf courses, bowling greens, and entertainment areas. Along with community assets, retirement condos also have age-specific activities such as social clubs, fitness classes, massage treatments, beauty treatments and more.  

Rules and regulations

There are certain obligations involved with condo living, with rules and regulations needed to support common values and ways of life. While all condo communities have rules, retirement communities may have different rules or additional rules to improve outcomes for elderly residents. For example, there may be noise restrictions after a certain time, especially in some areas of the building. Depending on the community, there may also be restrictions for pet ownership, outdoor cooking, hanging washing outside, and long-term guests.   

Benefits of condo living for retirees

Living in a condo offers a number of benefits over living in a detached dwelling, especially for retirees who want to change their lifestyle and avoid the complications of house ownership. While living in a detached house can be a great option for people during their younger years, the disadvantages often outweigh the benefits as time goes on.  

Affordability - First and foremost, buying a condo is generally more affordable than buying a detached home. You do not own the building exterior or the surrounding land, which can save you a lot of money on the purchase price and the ongoing maintenance. If you're nearing retirement age, a less expensive purchase price allows you to spend more of your money on hobbies, families, and other interests.

Amenities - Condos allow people to access a wide range of amenities, from sporting amenities such as pools and bowling greens through to social amenities and shared living spaces. Many retirement condos also include commercial amenities, with full-time shops or visiting practitioners allowing you to access goods and services on-site. Access to age-specific amenities helps you to stay active for longer and allows you to enjoy the company of your new friends and neighbors.  

Social support - Living in a condo can have a dramatic impact on your quality of life. Rather than isolating yourself in a detached house, a condo allows you to make new connections with people in a similar age bracket. Retirement condos often include intricate social support structures, from social and sporting clubs through to regular activities and day trips. Before choosing a condo, don’t forget to look into “membership” and review the activity calendar.

Lack of maintenance - When you live in a standard house, you are responsible for all of the maintenance and cleaning. In contrast, living in a condo requires very little maintenance, with each resident only needing to look after the interior of their own unit. All exterior and shared space maintenance is taken care of in exchange for monthly condo fees, so you never have to worry about mowing the lawn or cleaning the gutters.

Challenges of condo living

Despite all the benefits associated with condos, this way of living is not ideal for everyone. The existence of condo fees is enough to put many people off, with residents needing to pay monthly fees to the condo board in addition to their mortgage payments. Depending on the community in question, condo fees can add hundreds of dollars to your monthly budget for a property that you already own.

It's important to put this issue in perspective, however, with people who own detached dwellings also needing to pay a substantial sum of money on a regular basis for building maintenance and access to sporting and social clubs. In many ways, monthly fees are easier to budget for than large maintenance bills, many of which come by surprise. Condo fees have another important role to play, with retirees able to relax and enjoy life without needing to waste time and energy on property maintenance and repair.

Another challenge of condo living is the implementation of rules and regulations. While the vast majority of these restrictions are based on personal responsibility and common sense, not everyone likes being told what they can and can't do. Before you decide on a retirement condo, it makes sense to review the rules and regulations, meet the board in person, and get to know your neighbors to see whether or not certain rules are restrictive. Regulations can vary considerably between communities, so shop around and find an environment that is welcoming and flexible to your needs.   

Types of retirement communities

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Not all retirement condo communities are created equal, with different structures available to cater to different budgets and lifestyle needs. Many of the following differences are related to independence and healthcare, with some retirees needing more support and medical attention than others.

Co-housing condos vary widely, with some offering full medical support and others based entirely on independent living. It’s important to understand that a continuum exists between fully independent retirement condos and nursing home care, so you don’t have to pick one of these two extremes. Before you decide on a retirement community, it's important to research all of your options and try to anticipate your future needs.

Co-housing with property ownership

Full-ownership co-housing communities are a popular choice with retirees. These communities mirror traditional real estate structures in many ways, with the individual able to own their home outright. These condos are also known and marketed as gated communities, active adult communities, and independent living communities. Co-housing is designed for healthy and active people who are able to live independently.

Co-housing with a rental arrangement

Many retirement communities are designed to work with a rental arrangement, with residents paying monthly rent for their own dwelling along with amenity access. While this type of arrangement is similar to co-housing with property ownership, the resident is not able to build equity or enjoy the security of owning their own home. While condos are owned by individual residents by definition, many retirement communities include a rental option in addition to or as an alternative to ownership.    

Niche retirement communities

Niche retirement communities are designed around common beliefs, activities, and lifestyles. Common examples include Christian communities based on religious faith, artistic communities based on creating art, and communities that require labor union membership. While these condo communities are identical in most other ways, they may include dedicated amenities and group based activities based around the common element.

Shared housing

Retirees sometimes choose to share a large house in order to achieve financial freedom and maintain control of their lifestyle.

When two or more unrelated people choose to live together for cost sharing benefits and companionship, they can avoid many of the unwanted rules and restrictions often associated with 55 plus communities. A shared housing arrangement may involve a home owned by one of the residents or a shared rental agreement.  

Naturally forming communities

A NORC is a naturally occurring neighborhood that includes a significant portion of older people. Retirees are more likely to live in certain areas, with Florida being the obvious example. These neighborhoods occur as the result of people moving to a specific location, especially when younger residents move out at the same time as older people move in. When other retirees live in the local area, it may be desirable to live in a standard condo and set up external social clubs and activities to enable social connections.

"The village model" is a similar structure, only this time paid staff and volunteers are available to assist retirees in their existing homes. This can be organized by retirees or their families, with carers and healthcare professionals able to visit multiple homes in a nearby location. On a smaller scale, sharing housing with other retirees can also be an option in some situations. Sometimes called the "Golden Girls" retirement model after the popular TV show, retirees can share a condo apartment with others of a similar age.    

Continuing care

CCRC facilities provide a comprehensive continuum of care for elderly residents. These projects provide a number of living arrangements in a single location, from completely independent living through to assisted living and nursing home care. While CCRC can be more expensive and less independent than other 55 plus communities, this arrangement allows you to age in-place as your healthcare needs change over time. CCRC is similar in many ways to a standard condo project, with shared amenities and spaces available in exchange for monthly fees.

Where should you retire?

Along with deciding what type of retirement community you want to live in, it's also important to think about its location. Where you live will have a huge impact on your quality of life and your finances, so take some time to look around and find somewhere perfect for your needs. From the climate and purchase price through to accessibility factors, lifestyle compromises, and healthcare issues, retirees have a lot to think about before they make the big move.  

Home vs away

Perhaps the most fundamental decision you have to make is whether you want to retire close to home or away. There are pros and cons associated with each approach, with each person needing to make their own choice based on their personal needs and family relationships. While moving away to Florida is obviously very enticing, staying close to home where people know you can also be beneficial. Receiving regular visitors doesn't just make you feel nice, it also improves your mental health and provides you with a valuable support system.   

Climate

The weather seems to dictate a lot of retirement decisions, with a warm and sunny climate attracting many people to Florida and similar destinations. The condo market has flourished in Florida and provided people with a number of affordable choices and opportunities. If you do want to move to a warmer climate, it's important to acclimatize yourself first.

While it's nice to live somewhere warm when you retire and have the time to enjoy it, the climate should not be your only consideration. As mentioned above, staying close to your existing friends and family provides a number of less tangible, but equally important, benefits.

Accessibility

Regardless of the state and city you decide to live in, accessibility is an incredibly important issue that should always be addressed. As you get older, this issue is likely to become even more important, with people less likely to drive and more dependent on public transportation. Other than trains and buses, you should also think about proximity to shops, restaurants, cafes, entertainment venues, and sporting facilities. Many condo communities offer regular buses and day trips to neighboring towns and attractions, so factor this into your decision.

What should you review?

There are lots of things to consider before purchasing a condo, so take some time, do your homework, and create a short list of properties based on criteria that matters to you. While condos are a great way to access modern real estate at an affordable price point, you need to be careful to avoid problems down the track. From the construction standards and quality of amenities through to the building financials and condo fees, there are lots of things to review before you sign a contract.

Construction standards - Review the entire property and pay close attention to maintenance issues and cleanliness. Can you see any damp? Are there any cracks in the walls? Are there any building materials missing or in a poor state of repair? Before you decide to buy, you should use the services of a professional building inspector.   

Financial reports - Review the financials of the community and check for inconsistencies and budget problems. While you won't be able to access all of the data, you can ask to review the annual financial statement, maintenance fee increases and amendments, building plans and amendments, and detailed information about the physical condition of the building. It's also important to review the size of the contingency fund to see if it will cover natural disasters and other emergencies.

Condo fees - It might go without saying, but condo fees will be your biggest expense apart from your mortgage payments. Fees can differ widely between buildings and locations, from a couple of hundred a month through to thousands for exclusive condo communities. When reviewing fees and fee structures, don't forget to compare them with the amenities available, after all, maintenance of common assets is a major use of the funds. The age and size of community assets can also influence fee amounts, with older buildings needing more maintenance and smaller communities also more expensive.    

Legal issues - A single legal issue can cause a range of complex and unwanted problems. Before you make a decision, you should look into existing complaints and litigation, and review historic legal cases relating to the property in question. Whenever your buying into an established retirement community, it's important to use the services of a real estate lawyer who has experience with the retirement market.

The neighborhood - While many retirement condo communities are self-contained, it's always important to review the surrounding neighborhood. How close are the shops? Do you feel safe walking around? Is there anything for your kids or grandkids to do when they visit? Reviewing the neighborhood is often just a matter of walking around, but you can also check property prices, review property growth, and see if there's any plans for new developments.

Making the right choice for your golden years

Retirement is something that many people look forward to their entire working life, a time to relax and enjoy a slower pace of life. Rather than deal with the burdens of owning a detached property, more and more people are deciding to embrace the condo lifestyle and everything it represents. Living in a condo can provide you with an affordable home, access to modern amenities, and a lifestyle that's free from maintenance.  

After deciding on a location and budget, the first decision you have to make is between a standard condo or a community designed specifically for retirees. If you want a standard condo, there are more options available than ever before. If you're looking for a dedicated retirement condo, it's important to differentiate between communities based on the level of medical care and support services that they provide. While condos require individual ownership, many retirement communities also offer co-housing with a rental arrangement.

The distinction between retirement condos and retirement communities is gradual and not set in stone, from independent living right through to full medical care. While no-one has a crystal ball, you should try to anticipate your future lifestyle and healthcare needs before making a purchase. When you find a home that's perfect for you, it's time to put down the lawn mower and enjoy the wonders of the new condo lifestyle. Not only will you be surrounded by people of a similar age, you can also enjoy a range of modern amenities, social clubs, and exciting new lifestyle opportunities.