By Jeff Ostroth
THE ERICKSON TRIBUNE
So you’ve finally decided it’s time to “right-size.”
In other words, trade in that 7 to 12 room house that once served your family well, for a home that better fits your lifestyle now. The question is, what kind of home should you choose?
Obviously, you’ll want something small, so you don’t have to clean—and heat—more rooms than you use. You’ll also want to be free of the worries of keeping up your home and yard.
And ideally, you’d like your new home to come with a range of amenities, such as a pool, fitness center, and quality dining. Generally, that means looking into a community for active retired adults.
Now that you know what you’re looking for, there’s something else you need to think about: Should you rent, buy, or put down an entrance fee?
Renting
Few retirement communities offer homes on a rental basis. And if they do, they generally don’t offer a wide range of amenities.
Even if you can find a pool, fitness room, and other amenities in a rental situation, your monthly rent is likely to be quite high. And, of course, once you make a rent payment, that money is gone for good, because there’s no return on your equity.
Buying
Retirement communities that offer condominium homes for sale are also quite rare. One that does sell condos promises prospective residents “the chance of appreciation on their investment.” It sounds good, but it ignores the fact that there’s also the chance of depreciation.
Recently, in fact, FORTUNE magazine published projections of where home prices are heading around the country. By 2007, New Jersey prices in selected areas outside New York City were projected to undergo a 1.8 percent to 3.5 percent decrease. And if the last decline is any indication, that could be just the beginning of an extended period of lower prices.