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I GREW UP IN a small apartment. Truth be told, I was never enthusiastic about maintaining a house, but I did so for 45 years. Eight years after I retired in 2010, the house and its stairs became too much for my wife and me.
We considered moving to a smaller one-story house and briefly flirted with a continuing care community. We even looked at one community and found it too expensive, especially having to hand over a partially refundable $900,000 upfront fee, with no interest earned on the money.
When a condo in a nearby 55-plus community came on the market, our realtor convinced us to take a look. Here we are two years later and we’re pleased with our decision. We have two bedrooms with walk-in closets, two full baths, living room, dining room, large kitchen, laundry room and a family room with fireplace. In all, we have 2,000 square feet, plus an 80-square-foot balcony. The unit came with two garage spaces and two good-sized storage rooms. Amenities include a pool, tennis and bocci courts, putting green, well-equipped clubhouse, and beautiful grounds with ponds and walking paths.
There are nine buildings in the community. Each has three floors, with four condos on a floor. It’s quiet. Sound from above and below us is virtually nonexistent. Our building currently houses just four residents, as the snowbirds leave the cold of New Jersey and migrate south for the winter.
There are always rules. We can have pets, but a dog can’t weigh more than 50 pounds. Forget my dream of having an Irish wolfhound. Luckily, no weight limit applies to residents. There are also rules on deliveries and on which day of the week you can move in or out. Overall, the rules are common sense.
Now for the big question: Is it a good investment? Honestly, I don’t care. Our decision was based on livability. Still, we’ve done well so far.
We bought our unit in 2018 for $580,000, which was less than the purchase price in 2011, when the unit was brand new. Today, units our size sell quickly for around $660,000. We live in one of the highest-tax states. Our property tax is $12,500, compared with about $14,500 for our old home a mile away.
The homeowner’s association (HOA) fee is $770 a month. Thus, our annual fixed costs are $21,740. Of course, that $770 offsets some of what we previously spent on house maintenance, lawn care, snow shoveling and so on. A few months before we sold our old house, the air conditioning (AC) went and we needed to remove a tree. Those two expenses were equal to six months of our current HOA fee. I haven’t done all the math, but not worrying about maintenance and repairs is worth it.
Condo living is not worry-free, though. We have our own heating, AC and hot water equipment. Turns out the builder didn’t go for the best quality, so many residents have had major repairs or replacement. We have an estimate to replace heating and AC for $12,500. Ouch.
The HOA fee is tricky. Some residents want no increase, while a few—like me—would prefer a modest increase each year to avoid sticker shock down the road. So far, the no-increase group has carried the day, but that won’t last.
At last month’s association meeting, we learned the irrigation system was mismanaged and we wasted thousands of dollars on water. A new landscaper is being hired at a higher cost than currently spent. Explaining money issues to some of us seniors is no easy task.
Complying with the COVID-19 rules on opening the community’s swimming pool would have cost $30,000, so it remained closed this year. Several people wanted to know if there was an HOA refund coming their way as a result. Apparently, they don’t understand fixed costs. A small group wanted fans installed on the clubhouse deck, where sitting was allowed this year. The association spent $3,000 on that, despite the fact the area has been used for nearly 10 years without fans.
Yup, even affluent seniors are challenged by the concept that things you want cost money. Living in a multi-unit community such as this means some of your expenses are controlled by others.
The dreaded assessment occurs when an association has a major expense and there are insufficient funds to pay for it. Fortunately, our association is keenly aware of that and actively seeks to avoid it. A few miles away, at a high-rise condo building, each unit was assessed $20,000 to be paid over 10 years (with interest) to cover the cost of external repairs on the aging building.
Condo living is not for everyone, but for us so far, so good. In any case, there’s no going back. Should my wife survive me, she has a home that’s both physically and fiscally manageable for her. And our children have a bit less to worry about.
Bottom line: We aren’t moving again, at least not voluntarily.
Richard Quinn blogs at QuinnsCommentary.com. Before retiring in 2010, Dick was a compensation and benefits executive. His previous articles include The Late Show, For Your Benefit and A Seat at the Slots. Follow Dick on Twitter @QuinnsComments.
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Thanks for tackling this tough issue. My wife and I have so far chosen to age in our home. This is largely due to my wife’s love for this home: years of decorating, garden work, neighborhood relationships and she simply loves her home. She will far outlive me and the choice we make primarily affects her. As you brought out this is not primarily a financial issue but a quality of life issue. Maintaining the house and exterior are big challenges that we don’t have a handle on yet so we’ll see. Big questions, tough answers.
That’s unlikely, but we take heart in knowing they are going to pay for teacher and state employee pensions and other benefits significantly better than available to the taxpayers footing the bill 🥴
I think I should clarify two points. Our realtor was one of our four children all of whom, for a few years, were urging us to leave our three story house for something more manageable which I resisted for too long.
And, our purchase price was a bargain because we bought the condo from the estate of the women who was the community’s first resident and it had been on the market for a year as two previous sales fell through.
Richard, very nice article. My wife is concerned that 55 + communities limit the pool of people when you are ready or need to sell. Have you observed that resales are difficult, or is it not really an issue? Some of the communities in our area allow a certain percentage of owners younger than 55.
Actually it’s quite the opposite. Units sell quickly with the occasional exception of someone who insisted on asking an unrealistic price. That pool of people keeps growing and the 55+ group has the money to buy. But realistically, most people who move into a 55+ community aren’t planning on moving again so I suspect resale is not the top priority.
Initially, it may have looked smart to buy a property with a low HOA fee. It is going to be a false economy in 5 to 10 years because the value of that condo is going to go into the toilet because the association won’t be able to invest properly.
We moved from a single family home into a condo in 2019. Ours was new construction, and we have 3 bedrooms, 2 1/2 baths, almost 2000 square feet, a storage unit, and two parking spaces in the garage on the ground floor, including one with an electric vehicle charger if we ever go that route. We were fortunate to get a top floor unit with nice views. There are 15 units (5 per floor) in our building. It’s not a 55+ community, but most owners are retirees or empty nesters. There are a few students (we live in a college town) whose parents bought the condo for them to live in while going to college or professional school, but really nothing between students and empty nesters.
Thanks to California laws on taking our property tax basis with us when moving within the same county, our property taxes are only about $7000 per year. The base price of our unit was $690,000 and we added about $40K worth of upgrades. Comparable units in the newer phases are listed at $756,000, so the value seems to be holding.
Our HOA issues have been similar—a lot of controversy about opening the pool during COVID (hasn’t happened for similar reasons), and we just raised the HOA fees to make sure our reserves are fully funded. Our HOA fees will be about $550/month after the increase. For that we have a pool, hot tub, clubhouse, very nice walking trails, basketball and bocce ball courts and a dog park, plus exterior maintenance and landscaping. $550 isn’t nothing, but it doesn’t seem that bad compared to other places we looked at.
Thank you for writing about how HOA fees get used and how they can come up short in some instances. I am 66 years old, single, still living in my family home, but would love to sell it and get into a condo. Repairs and maintenance on the house are getting more expensive all the time. However, I would not want to jump from the frying pan into the fire. I have never before read anything about the condo community having a say over the HOA fees and their use, so now I have another perspective to consider before making a final decision that I may not be able to reverse.