When considering a retirement community there are many factors to consider, including the financial risks associated with various financial models. At The Cedars, we have reduced the financial risks to Members by having no debt on the community and eliminating the vacancy risk.

What is vacancy risk?

In non-equity or entrance fee communities, monthly fees are received only from occupied homes. Communities budget for vacancies by using an estimated percentage occupancy based on historical norms, trends, etc. This works fine until there are things that cause vacancies to be higher than projected, such as the current economic environment or aging of a community.

In our current economic environment most all non-equity communities across the country are experiencing higher vacancy rates as people defer moving because of an inability to sell their homes and concern about the economy. Higher vacancies reduce the revenues available to cover operating costs, sometimes significantly.

The response to lower revenues has to be a reduction in operating costs, which requires a reduction in services, or an increase in monthly fees. Either scenario has the potential to be devastating to the residents.

At The Cedars, there is no vacancy risk because the owner, or an estate, is obligated to pay the monthly service fee even though the home may not be occupied. For homes that have never been sold, the developer pays the condominium fee portion of the monthly service fee, which is approximately 40% of the full fee. Thus there is always a steady stream of revenue with which to operate and monthly fees don’t have to be increased to cover higher vacancies.

Some older communities experience lower occupancy because of aging of their facilities and failure to maintain and update them, which puts a greater financial burden on the remaining residents. At The Cedars, Members own their homes so there is an incentive for Members to update their homes and the facilities to attract new owners. Without having to worry about vacancies, maintenance and updates of common areas can be accomplished without undue hardship.

Having no debt on the community and elimination of the vacancy risk are but two of the many reasons to purchase a home at The Cedars. The time to move to The Cedars is now so you can begin enjoying the wonderful lifestyle.

If you want to learn more about The Cedars, call us today at 259-7929 and we’ll be glad to come to your home or meet you here at The Cedars so you can see what a great community it is.