Curious as to the thoughts here. Wife and I are looking at buying a SFH for my FIL in a new 55+ community. Gated with lots of amenities, etc. I'm thinking this is a pretty safe investment to at least get our dough back eventually given the aging population. Wanting to know others thoughts. Also, will likely end up buying one for my MIL too at some point.

Sounds like a good plan to me, as long as it's run and maintained well.

Probably no trouble getting your money back assuming it's a decent community (but impossible to say for sure).

A few other thoughts:
-will you own the house, or will he? Paying cash or financing?
-who is responsible for ongoing upkeep, insurance, maintenance costs, taxes, HOA, etc.
-if he owns the house, will it be specifically willed to you upon his passing? Any potential sibling issues?
-if you'll own the house, will he be renting from you? Any issues with this arrangement in the community restrictions?

Goldie Wilson said:

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Probably no trouble getting your money back assuming it's a decent community (but impossible to say for sure).

A few other thoughts:
-will you own the house, or will he? Paying cash or financing?
-who is responsible for ongoing upkeep, insurance, maintenance costs, taxes, HOA, etc.
-if he owns the house, will it be specifically willed to you upon his passing? Any potential sibling issues?
-if you'll own the house, will he be renting from you? Any issues with this arrangement in the community restrictions?

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Thanks!

Buying, 20% down and financing on 30yr note. We will own.
-HOA is responsible for front yard, he would pay
-We will pay insurance and taxes
-maintenance would have to be us
-renting from us. CC&Rs are good with this

Any other things I should think about?

Thnx for sharing. Sounds like she needs a roommate or 2

I know someone who bought in Del Webb Sweetgrass in Richmond.

I thought it was a mistake at the time, but it's turned out to be a great move. Very supportive neighbors, lots of activities, nice landscaping throughout the community that is well maintained, etc.

I don't have any idea about home values but everything else has been a positive.

As an old guy 55+ communities have a lot of appeal and I think probably their own market separate from the overall RE market, depending on location.

It seems though your question and conundrum, if it is one, is unrelated to the type of community and completely focused on the family relationship and wisdom of doing this.

Have you looked into the Family Opportunity Loan? It allows you to buy the property in your name only and get the same terms as you would for your primary residence. I'm closing loans with 2 physicians today that got the best terms and maintain 100% ownership themselves even though they will not occupy the property. I don't know if either is charging rent to the parents for whom they're buying.

Didn't know that was a product. I'll definitely look into the Family Opp Mortgage. Thanks!

My email is on my profile if you'd like to discuss it.

We have had a very good experience in our 55+ neighborhood. Friendly, helpful neighbors and our home's value continues to rise.

BTW, our HOA does not allow renting.

My parents lived in one for a time (Frisco Lakes) and it was a good spot. That said, the inventory there did seem to turn a little more slowly, but they ultimately did not have trouble selling and did make some money on it

I will say that the cookie cutter homes in these communities have a range of flooring/finishes, and as you'd expect, the ones that were nicer sold more quickly. The not-as-nice tended to sit much longer. My parents had purchased one that was at the nice end, and that helped for sure when they needed to sell (mom got cancer and they wanted to move closer to me).

QBCade said:

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Thnx for sharing. Sounds like she needs a roommate or 2

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She definitely needs something! I could write pages and pages.....

Only shared that to reinforce that sometimes "No good deed goes unpunished." Not to dissuade you.

Would add a couple things.

As someone in the Real-estate business, who has decent experience with 55+ communities, I see no issues with the house being there. I know a few people who have investment strategies based on owning in them and they have done well. I have met tons of people who live in them and love it. The vast majority, really.

To expand on the renting to a parent thing. I cannot say we would not do it again, even knowing how it turned out. But, being older now and hopefully a little bit wiser and having been exposed to some financial things as I have gotten older and parents have gotten older, I would approach it differently.

I would strongly recommend that, in addition to reaching out to someone like Jed, you seriously consider sitting down with a Family estate/financial planning expert to discuss all of your (you and your Dad) options. Would there be advantages to some sort of trust, a life estate, etc? Considering things like property taxes (definitely a concern in Texas), capital gains on you later, income taxes from the "rental." etc. I have come to learn that there are strategies that can be used and can be helpful, but may not be known to us normal folk. In our case, we were reacting to a situation and moved quickly. Were I to have to do it again, I would make the time to talk to some experts about the very best way to set things up for everyone involved (even if it would not have protected from a parent turning deadbeat."

Will reach out. I'm in CA, does that matter?

Our bank also has a California charter.

Absolute said:

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Just a devils advocate type thought. Be prepared for worst case. Dealing with family can be tricky.

We did similar for MIL (bought house (not active adult community) she would pay rent.)

For a couple of years it was okay. Then she decided she was retiring. Part of her retirement was apparently to stop paying rent. No discussion, no warning. Just stopped paying. As it is hard/impossible to kick an aging parent to the street, we now continue to pay the mortgage, utilities and hoa due and she lives there for free. It is a pia and a burden and a definite negative in the relationship.

To be fair, we knew it was a possibility going in, so we're not completely surprised. We will do okay when she passes and we sell. But thought I would share a story with a less Than perfect outcome.

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Is it an option to buy a tiny condo for her to live in so you could rent the house?

Possibly, but at this point we are far enough in that we are not willing to throw good money after bad. Her health isn't great and for now waiting things out seems the best course. If the other siblings would or could afford to help, maybe. But they cannot or will not, so.... There you are.

As long as I don't do a deep forensic analysis of the money, I can convince myself we will do "OK" when we selll it and 1031 it into a couple properties here in dfw. We actually bought it at a great time as a builder foreclosure in 2008. We could have done better with the money sunk into things with real investments, but sometimes you do what you have to do. We will do okay when we sell it and plan to roll all the proceeds into rentals that are more local.

There are some family dynamics going on that I would rather not get into. Lesson learned I guess, but like I said, I can't say we wouldn't do it again to help out. Sometimes you just do what you can to help family, right?

To me and my wife, the biggest issue is more the principle of things than the money (not that we are anything close to rich.). Her somehow deciding it was okay to decide we didn't need to be paid is a huge issue. We really cannot fathom the thought process that went with that conclusion. Her deciding never to actually ask or talk about it is even bigger. But what can you do? Not going to leave her homeless. Don't really want a true rental out of state. Kind of a no win. At this point we are okay with waiting it out. But it did ruin an already Rocky relationship,at least from our perspective.

I passed 55 a long time ago and this type community is somewhat of interest to me. I've looked at some in Arizona and I guess I'm wondering if my logic is flawed here. I think this type community in an area that attracts tons of retirees is somewhat insulated from the overall RE market. Let's say I buy in one and decide I don't like it. I would think the market for the resale is going to be people from Minnesota and Manitoba that have retired, sold their house and are moving away from the snow and miserable weather whether the job market is good or bad and to some extent regardless what interests rates are if they sell back home and follow with a buy. If they're just going to winter in Arizona maybe they're more sensitive to the overall market but my thought is there's people retiring every day and looking to relocate regardless of the market conditions.

That may not add anything to this discussion but I'd be curious if others think I'm looking at this wrong.

I can't even begin to imagine being in your shoes.

jja79 said:

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I passed 55 a long time ago and this type community is somewhat of interest to me. I've looked at some in Arizona and I guess I'm wondering if my logic is flawed here. I think this type community in an area that attracts tons of retirees is somewhat insulated from the overall RE market. Let's say I buy in one and decide I don't like it. I would think the market for the resale is going to be people from Minnesota and Manitoba that have retired, sold their house and are moving away from the snow and miserable weather whether the job market is good or bad and to some extent regardless what interests rates are if they sell back home and follow with a buy. If they're just going to winter in Arizona maybe they're more sensitive to the overall market but my thought is there's people retiring every day and looking to relocate regardless of the market conditions.

That may not add anything to this discussion but I'd be curious if others think I'm looking at this wrong.

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Kinda my thought. With our aging population, seems to be a good investment for the next 10ish yrs.

I like the idea of 55+ communities even though I'm young and no where near that point yet. But from an investment side it seems tricky. A community that is popular now might not have the demand in 10 years. Yes demand should increase as demographics change but I would rather have a house to sell to the entire population vs age restricted. I think it could be a questionable investment and still a good decision overall.