ACTIVE RETIREMENT LIVING – MADELINE HILL & FRIENDS
The long-term advantage of owning your own property is still a strong motivating factor for many people in their search for a senior community, even after several years of declining property values. There is a distinct advantage in ownership which preserves your estate and gives you direct control over how the community is managed. But this is a many sided issue requiring close study, and I’ll need two posts to cover it adequately. To begin….
When a community is owned and operated by a corporation, the managers owe allegiance first to the corporation (their employers) and only second to the community itself (the people–that’s you).You can count on it–if corporate needs do not coincide with resident needs, those of the corporation will have priority.
But there is a good side to this arrangement. A corporation will take care of business, and that includes marketing, competitive salaries, and keeping the place in the black– sound business practices that also work to ensure the future health of the community you’ll be living in. These priorities can easily get lost in a resident-managed community, where people predictably take careful aim at the size of their fees and seldom waver in their resolve to keep them low in the near future.
Resident owned and operated senior communities are especially vulnerable to such short-term vision because, as many people will tell you, “I don’t have that long to worry about. Who will live here in twenty years or how the building will look or whether the complex is fully occupied–that might matter to them, but not to me.” (This attitude strikes me as a good example of the “Tragedy of the Commons,” in the economics of sustainability theory. Fortunately, not everyone falls into this way of thinking.)
Corporate-owned communities have a product to sell and are motivated to deliver. Such places tend to enjoy more lavish accommodations, better staff ratios, higher levels of service and more personal attention than owner-owned communities. Of course this also means that costs to residents are higher, and rate increases more frequent. (Some such facilities do contractually declare a ceiling on rate increases for a defined period; if you choose a corporate-run community, look for that). You can learn here from trust administration attorneys which is better for you and your retirement.
So when money is not an issue, many folks will be more secure and happy in a corporate-owned facility. But don’t decide quite yet: there is another side to the story, which I will treat in my next post, “Chapter 2.”