One of the questions we are most often asked is “What is the difference between a buy-in senior living and a rental?”

This is an excellent question and leads to an important decision factor when choosing a senior living community – Should I rent or buy-in? We explain the options below so that you can make an informed decision.

Rental Senior Living
Rental communities are a very popular model for senior living communities. Additionally, they are the least expensive type of payment model. Usually a rental community operates much like any other type of rental housing: They require a lease signing, a monthly rental fee, and a security deposit of some type. The security deposit is usually refundable.

Many rental communities have different levels of care on the premises for residents whose care needs increase over time. However, if a resident’s care needs exceed the level of care available at the community, they will have to find housing elsewhere that fits their needs.

Rental communities also offer flexibility – if a senior decides to move closer to family or needs to relocate, they do not have to worry about selling their apartment or condo. The rental model also means that the resident retains their assets and when they pass their families do not have to worry about selling the apartment or paying out against a property value that may have decreased in value.

Buying in or Ownership Senior Living
A buy-in community makes an arrangement with a resident to either buy the apartment outright or the resident transfers their assets to the community’s equity trust. In either case, there is a large up-front cost to moving into the community, but the resident then is the owner of their apartment.

Residents pay monthly maintenance fees, or the fees are deducted from their equity trust, and any renovations are usually paid for by the resident. There is usually care available as well for an additional cost to be paid monthly or deducted from their equity.

If the resident care level exceeds the level of care available, they may have to move and sell the rental. Upon a resident’s death or departure, the condo will be resold. Depending on the real estate market’s increase or decrease, sellers or surviving family members might find it a boon or struggle.

How to Choose
Both renting and buying have pros and cons, so we recommend carefully examining financial and medical considerations before making a decision.