Living in a retirement community is an investment in your future, just like when you were purchasing your first home. Therefore, evaluate it as an investment and ask yourself: Which place will provide the most benefits for what I’m paying?
One great option for getting a return on your investment is a senior cooperative retirement community. The unique co-op structure gives you financial benefits you wouldn’t get at other retirement communities.
5 Top Financial Benefits of a Cooperative Community
We’ve broken down the top five financial benefits of a senior co-op living community to help you better understand what you’re getting for your investment.
(Not sure if you’re financially prepared to make the move? Compare your costs of living at home to a retirement community with this handy worksheet.)
1.) Tax Benefits of a Co-op Retirement Community
To begin with, it’s important to understand how a senior co-op community is set up. Cooperative retirement communities are co-owned by the residents. As a shareholder, residents get a say in the way the co-op is run—and even get a chance to sit on the board.
Typically, when you join a co-op, you pay an entry fee and then monthly fees to cover all the services and amenities included in the community. This is what makes you a part-owner of the co-op.
Because of that, you get similar tax benefits to those of a homeowner. It works like this: The co-op corporation (which manages the technical details of the co-op) pays real estate taxes on the property. You don’t have to pay those taxes directly, but you are allowed to deduct your share of the co-op’s taxes.
It’s also possible to get a tax break on your monthly fees. You can deduct a portion of your maintenance fees from your income to save on income tax.
These tax breaks are major advantages of co-ops compared to other retirement community types. For example, in a continuing care retirement community (or CCRC) you are no longer a homeowner, and therefore, don’t get the tax benefits you used to.
There are other financial benefits to entering into a co-op apart from taxes. The next big financial benefit of a co-op is the property itself.
2.) The Value of Owning Property at a Co-op Community
As we’ve gone over, residents of a co-op are part-owners of the property. But what exactly does that investment get you compared to other retirement communities?
Well, to start with, at both a continuing care retirement community (CCRC) and a co-op, you pay a fee upfront to live in the community. At a co-op, that fee is a share cost (think of it like a down payment on the apartment or cottage). At a CCRC, you’re paying an entrance fee.
A percentage of a CCRC entrance fee might be returned if you move out, as long as that’s spelled out in the contract. That refundable portion may also decline the longer you stay.
However, the benefit of a co-op is that the value of your piece of the property will be returned in part upon resale. At Sugar Hill, 92% of the value of your apartment or cottage goes to you once it sells if you decide to move.
Also, property often appreciates in value, and as a shareholder, you benefit from that increase. With limited liability, it’s easy to see the benefit of becoming a co-owner.
And if you do decide to sell, Sugar Hill markets your residence for resale at no cost to you. What could be easier?
3.) Co-op Costs: More Bang for Your Buck
The residents at a co-op play a big part in decisions about community and costs. At a co-op like Sugar Hill, residents are elected to a governing board to help keep priorities focused on residents.
As a shareholder, you know you’re being considered with every decision. You get a say in the services your money goes toward, meaning your money isn’t spent on services the community at large isn’t interested in.
If you’re considering a co-op, it’s also important to keep in mind that while you are a part-owner, you don’t need to worry about the daily running and decision-making of a co-op. That’s all handled by a competent executive staff. Maintenance and other amenities are also included to facilitate a hassle-free lifestyle.
4.) Co-op Living: Homeownership Without the Hassle
Co-ops are a good option for older buyers. If you want the benefits of owning a home without all the hassle of maintenance and upkeep, that’s what a co-op is designed for.
Almost all co-ops include a wide range of maintenance services to make co-op living a breeze. At Sugar Hill, for example, we have hardworking crews that handle snow and trash removal, exterior and interior maintenance, and more.
And because these services are paid for by all members of the co-op, it comes at a lower cost than if you were paying for them all on your own for one property. It’s a major co-op benefit—basically, you’re getting more services for less money.
5.) Typical Amenities Included in Senior Living Co-op Fees
In a co-op, you not only benefit from maintenance services but also a wide range of amenities to help you live the retirement lifestyle you’ve always pictured.
Included in your monthly payments are a whole host of fun and convenient amenities. At Sugar Hill, for example, you have access to great community resources like world-class cuisine, transportation, a coffee shop, a multimedia room, walking paths and gardens, and more.
Co-ops also organize a lot of great social gatherings to help you stay active. You can participate as much as or as little as you like, but the active lifestyle of co-ops are a big part of what’s helping them gain popularity with retirees looking for housing with a community feel.
You can check out some upcoming events at Sugar Hill here to get a feel for what social events and outings might be available at a co-op.
Sugar Hill Cooperative Living Benefits
Overall, co-ops pack a lot of benefits into their monthly fees. At Sugar Hill, you get a return on your investment, giving you peace of mind when you choose to move into an apartment or cottage.
If you feel like this is a lifestyle that fits the picture you have of your retirement, take a look at our “Why Choose a Co-op?” to learn more about the benefits of cooperative living.