Home Owners Associations Struggle with Delinquencies

The growing problem of delinquencies is a very serious problem that is starting to affect almost every Home Owners Association (HOA) in the country. And unfortunately, the problem gets worse every day.

At the Kensington of Royal Palm Beach condominiums on Florida’s east coast, 70 percent of the owners are in arrears on their association fees. Many other associations have delinquencies in the 40-50% range. These fees typically pay for insurance, maintenance, landscaping, some taxes, staff, and energy. Clearly when not everyone pays their dues, which represent an equitable sharing of costs among all the owners, financial problems will ensue. Usually that means the remaining owners in the community association have to pay more to keep the ship afloat, a serious hardship. Many other problems spiral out from that.

Delinquencies can come in many forms. Owners who are in default on their mortgages typically stop paying everything, since they have nothing to lose. Banks often stall foreclosures, possibly to avoid having to pay the HOA fees once they retake title. In some cases banks don’t have to, or refuse to pay all of the arrears. Owners who are in financial trouble simply stop paying, since the HOA Board has limited recourse. And in yet another scenario, owners rent out their condos/homes to collect the rental income, but refuse to pay the HOA dues. In all of these situations the result is dire for the community association. Money becomes short, and the increased or advanced payments made by the remaining members can drive them into default or non-payment. Meanwhile employees, services, and amenities have to be cut to remain solvent. The spiral continues as homes become difficult to sell and prices plummet.

Some states are working on remedies to help these associations. One court in Florida awarded a blanket rule that allowed the association to collect dues directly from renters, thus bypassing the owners. Other legislation might impose more restrictions on banks to collect more money. The ultimate delinquent assessment collection tool is foreclosure, but this is a radical step with many complications (chief of which is many delinquent owners are already underwater; there is no equity left over for a second tier creditor like an HOA).

References
Condo Associations turn to Receiverships to Collect Rent
Seeking Solutions to Condo Delinquencies
Lenders Should Pay Up
The Great Foreclosure Debate
Community Associations Network (whose excellent newsletter provided all of these references)

Discover and Stay Is the Way - to Retire

You, and perhaps your significant other, might be obsessing about how to find your best place to retire, and what you might do once you get to the state of retirement. The process is fun for many folks, but an intimidating hassle for others. Wherever you come out on this spectrum, this article, in which we will discuss Fly and Stay packages, will be a help.

Fly and Stay packages (also called Discover and Stay, Play and Stay, Weekend Getaway, etc.) are the fun and low risk way to check out various best places to retire. You can usually purchase them at low cost from active adult communities, or you can make up your own for the towns you might be considering. The offers are so attractive that you just shouldn’t pass them up (but hurry, the high season is starting in the Sunbelt).

Active Adult Communities
Many good marketers often make it a point to offer Stay and Play packages. The theory being that if the community is really that good, nothing will sell it better than a fun-filled visit of a few days. Indeed if you ever visit the Visitor Center at a community like The Villages in Florida, your head will spin with how many people come in and pick up their keys and orientation packets. Some of our friends take advantage of these subsidized stays over and over again they are so much fun. Often, but not always, they end up buying in the communities they sample. One problem is that smaller communities usually don’t have the resources to offer these packages, so they are harder to sample.

Some of the packages we have encountered cost $199 for 3 nights, others charge more or less. Some stays are for longer or more flexible periods. The Villages charges $179/night. Most of these packages are a genuine bargain because they typically include bonuses like free golf, tennis, access to all recreational facilities, use of a golf cart, some free meals, even discounts at shops. The attraction for the community is that by making you feel like a resident, you get to sample the lifestyle, and you might just decide to purchase. For you, the package offers an inexpensive vacation and a very low risk way to try out a new lifestyle and location.

Here are some of the active adult 55+ communities we were able to identify that offer Stay and Play packages, but there are many, many more out there:
(Important: It doesn’t hurt to ask! If you are interested in a particular community call them up and ask if they offer a Discover and Play package -they might just make one up for you! Just be aware that these packages typically will not be available once the community is fully developed and the sales office closes up shop).
- Southern Dunes, Haines City FL. Play 10 Orlando golf courses.
- Mariner Sands,Stuart FL. Available Jan 20 - April 20.
- SunRiver, St. George UT. Packages starting at $99.
- The Villages. $175 per night Jan 1 - March 31.
- Pebble Creek, Goodyear, AZ. Most if not all Robson Ranch properties offer a peak season, 3 night package for $199.
- Talking Rock, Prescott AZ. Package available for $450.
- Wild Wing Plantation, Myrtle Beach SC. Choose from 3 different packages from $99 to $249.
- Golden Ocala, near Ocala FL. Live like a resident. Play like a member.
- The Settlement at Powhatan Creek, Williamsburg VA. Choose from $99 or $149 packages.
- Hot Springs Village, Hot Springs AR. Weekend Getaway packages.
- Porters Neck, Wilmington NC. Weekend Getaway Package.
- Hampton Lake, Bluffton SC. Their “Sneak a Peek” program even offers a $1500 travel rebate

Touring Retirement Towns (not 55+ developments)
You say you are not interested in a 55+ or active adult community? Well go ahead and make your own stay and play package to sample the retirement towns you have been considering. If you are flying, pick out a few towns in a manageable area. If you are driving, select some retirement towns a day’s travel apart and visit them. Stay in B & B’s or motels (use TripAdvisor.com to find the best ones). Make a date with a realtor and tour a few homes - you will learn a lot. Use the National Directory of towns and active communities at Topretirements to identify the towns and active adult communities you want to pursue further.

Bottom Line
Fly and Stay packages are too good a deal to pass up. They are cheap, fun, and educational. You will at some point during your visit meet with a sales representative, but you can also view that as part of your learning process about the community. The New York Times just ran an article, “Like a College Visit, Minus the Kegs“, in which they profile several successful “Fly and Stayers” and their journeys to a host of more communities offering these visits. Most important of all - a Stay and Play package can save you from making a terrible and expensive mistake. If a community isn’t for you, a short stay like this will probably help you find that out…before you make a big purchase and difficult move.

Have you been on a Stay and Play visit? Share your experiences in the Comments section below.

For further reference:
25 Best Active Adult Communities of 2009

January Real Estate Dribs and Drabs

As 2010 begins most experts predict that record numbers of foreclosures will continue. That being the case, home prices will probably go nowhere until that distressed inventory is cleaned out.

Rentals are the way to go. The Wall Street Journal reports that apartment vacancies hit a 30 year high late last year, and landlords are scrambling to fill them. Reis, Inc., a research firm, said that rents fell 3% last year, led by declines in west coast cities. Conclusion - you might be better off renting than buying. Particularly in a lot of active adult communities, there are plenty of places to rent.

Miami Dade County just went online with foreclosure auctions. In a somewhat amazing step, Miami-Dade county has started online auctions as a way to clear out a mountain of foreclosed properties. Auctions are risky, but they can offer bargains. The County is hoping to attract better prices as more people have access to information about these homes.

Walkability is better according the NY Times article “Street Corners vs. Cul-de-Sacs“. The Walk Score from C.E.O.’s for Cities, rates the number of destinations that are within walking distance of a home. 100 points is perfect (The White House on Pennsylvania Ave is a 97), 50 is average, most homes in the suburbs get low scores. The study concludes that homes with better Walk Scores lower crime, improves quality of life, and raises property values. Makes sense to us. Rate your home at Walkscore.com.

Most Under-Rated Places to Retire

Picking towns for “best places to retire” lists can get to be a lot like selecting prom dates - the bright lights overshadow the deserving candidates who don’t get asked to the big party. All too often the result is best places to retire myopia - too many lists that share the same old towns and cities - Asheville, Athens, Austin, Beaufort, etc.

This week we set out to identify 20 best retirement towns that aren’t on that many lists. We looked for towns that we know are terrific, but don’t seem to have the press that their more famous brethren do. Some will be familiar and some will not. Our apologies to all of the other great places to retire whose lights are still hiding under the basket; please give us your nominations in the Comments section below.

Bisbee, Arizona. Bisbee is an historic mining town in south central Arizona, almost at the Mexican border. If you are looking for an interesting, off-beat place to retire, Bisbee might be the place.

Flagstaff, Arizona. At an altitude of 6910 feet the climate is dry and much cooler in the summer than anywhere else in Arizona. Cecil B. DeMille tried but failed to make Flagstaff into an earlier version of Hollywood because of its great scenery, which includes the Grand Canyon and the San Francisco Peaks .

Eureka, California. Eureka’s northern isolation means that it missed much of the post-war redevelopment. As result Eureka is filled with examples of 19th and early 20th century architecture and historic districts. It’s been likened to a west coast Williamsburg, Virginia.

Jackson, California. Jackson is a small town (4,000 people) in the historic gold mining country of California. Jackson is nestled at the 1200 foot level in the Sierra Nevada foothills in Amador County.

Klamath Falls, Oregon. Klamath Falls is a beautiful town for retirement in south central Oregon, east of Medford and Ashland. Nearby are 2 very large and beautiful lakes: Upper Klamath Lake is the largest natural lake in the Pacific Northwest, and Crater Lake.

Maryville, Tennessee. Maryville is blessed with Maryville College, a private liberal arts college of about 850 whose campus is in the center of town. Its 400 acre campus has several buildings on the National Register of Historic Places and also has trails and paths for walking and running.

Yakima, Washington. Located in the Yakima Valley midway between Walla Walla and Seattle, this area is one of the best apple growing regions in the world.

Huntsville, Alabama. Huntsville is famous for its NASA Marshall Space Flight Center , the Redstone Arsenal, and as a high-tech center. It is a popular destination for retirees from all over the country, based on availability of desirable housing, beautiful parks, and a vibrant cultural infrastructure.

New Haven, Connecticut. New Haven, long downtrodden, is having a resurgence with young adults and retirees. The downtown is packed with restaurants, Yale students, and top-notch theater and music.

Merritt Island, Florida. In Florida the competition for best place to retire is pretty stiff. Melbourne has the beaches and nature, it just doesn’t toot its horn as much.

Warner Robins, Georgia. Warner Robins is a growing town of 61,000 about 15 miles south of Macon, Georgia. Robins Air Force Base, one of the largest employers in the State of Florida, helps make this a more diversified and cosmopolitan town than others of its size in Georgia.

Valdosta, Georgia. A college town, Valdosta has everything from Valdosta State University to the revitalized downtown venues for dining, shopping and cultural activities.

Columbus Indiana. Columbus has the distinction of being one of America’s top cities for architecture; in fact it is a showcase of modern architecture. Six buildings are designated as National Historic Landmarks. There are 60 other distinguished buildings from the world’s best architects.

St. Francisville, Louisiana. St. Francisville, Louisiana is one of the prettiest and most charming small towns along the Gulf Coast. It is a quaint town on the Mississippi and very popular with both tourists and people in retirement.

Brunswick, Maine. Brunswick is a beautiful small town near the southern coast of Maine. It is home to the elite Bowdoin College as well as the Bowdoin College Museum of Art. There are many homes and places on the list of historic places thanks to Brunswick’s early history and its prosperous sea captains.

Salisbury, Maryland. Salisbury is an interesting town and seaport on the Wicomico River on the Delmarva Peninsula. Its population was about 28,000 in 2008.

Plymouth, Massachusetts. Like the original Pilgrims, active adults are choosing to move to Plymouth. These modern day 55+ pilgrims come for its location on the ocean and quieter lifestyle. There are many waterfront homes in the area as well as charming old homes within the town. Outside of the town there are a large number of active adult communities.

Red Wing, Minnesota. Red Wing had an early heyday as a stop for steamboats on the river as well as for its rich farm land. Blessed with a beautiful downtown, it also has an impressive economic base with several recognizable manufacturers.

Vicksburg, Mississippi. It has old southern charm with squares, tree-lined streets, riverfront casinos, and the Vicksburg National Military Park. The park commemorates General U.S. Grant’s successful siege of Vicksburg in 1863, one of the Civil War’s most decisive battle.

Bartlesville, Oklahoma. One of the world’s top Mozart Festivals, Frank Lloyd Wright’s only skyscraper, an Arts Center, a stunning Community Center, plus 2 college campuses – these are just some of the surprising treasures in Bartlesville, Oklahoma.

Comments or suggestions for your favorite under-appreciated best place to retire? Use the Comments section below.

For further reference
25 Most Popular Places to Retire

How to Retire in Style and on a Budget

Let’s just say that Plan A for your retirement didn’t quite work out the way it was supposed to do. Whatever the reasons, the fact is you are a 60-something baby boomer looking to retire on a lot less money than you thought you would have. Luckily for gritty you, sulking is not an option. Here are 10 of our best ideas on what you can do to retire in style - and on a budget.

1. Move, now. Most people about to retire are living in a lot more house than they really need. So downsizing, the sooner the better, is the smart move. You’ll end up paying less in taxes, utilities, and maintenance right away. But you say the market for your home is terrible? It is, but this works two ways - you’ll get less for your current house than at the peak but you’ll be able to replace it with a steal. By selling your suburban home in the northeast or rust belt you might be getting out when the getting is good, while setting yourself up for possible sun belt real estate appreciation.

2. Look for low cost housing areas. Up until a year ago we would caution anyone to move away from the coasts to get a good deal in real estate. In Tennessee, Kentucky, Oklahoma, Alabama, Texas, and Mississippi you can usually pick out a very nice home or condo in a desirable area for less than $100,000. While it is still almost always true that real estate more than 50 miles away from a coast is less expensive, the real estate melt down has created opportunity in south Florida, the southeast, and Arizona. There are some really nice homes in the Fort Myers and Miami areas going for unbelievable prices (the median was $92,000 in October, 2009). For recommendations on low cost housing towns at Topretirements use our free Retirement Ranger (just specify lower than average cost of living when you take the quiz).

3. Look for a short sale or foreclosure. While not for the faint of heart, short sales and foreclosures offer the potential for huge savings (the National Association of Realtors says they typically sell for 15 to 20% less). They are the big reason why real estate prices are so low - other types of sellers just can’t compete with these sales. To succeed you need to be smart and energetic. You need to have a good real estate agent with expertise in short sales and foreclosures. You also have to use common sense. To find good deals spend time cultivating banks, checking out neighborhoods, and talking with residents (See NY Times article about the Cape Coral, FL real estate market, where over one fourth of the homes have been foreclosed). Many experts advise individuals from buying at auction because of the risks, which can include faulty title. In south Florida you can even go on foreclosure tours as a way to find properties. Just be careful, you are usually buying a home “as-is” with no recourse. (see foreclosure resources at bottom).

4. Look for a resale. Many marketers of new 55+ communities have a lot of unwelcome competition in their own projects - previous buyers who want to sell their units. You can almost always pick up a unit for less than a brand new one. You might not get to specify all of your personal touches, but you will probably get many custom features at no or low cost, with the bugs worked out.

5. Consider moving abroad. This plan is not for everyone. But if you like learning foreign languages and customs, don’t need to frequently visit friends or family, and are up for adventure, an expatriate retirement might be for you. Mexico, Guatamala, Costa Rica, Ecuador, Panama, and Nicaragua all have very desirable and safe towns where the almighty dollar actually still has some purchasing power (see our Directory of Active Adult Communities).

6. Go with a manufactured home. Prices are generally much lower in communities of manufactured homes. You won’t live in fancy architecture, but you will generally get a well-built, comfortable home for fewer dollars.

7. Look for a cooperative community. Florida, California, and Arizona are filled with cooperatively owned active adult communities. These are places where the developer long ago sold all of the lots and built all possible homes. Now the community is owned and run by the residents, who generally try to keep expenses (dues/HOA fees) low and services efficient. With the housing market down, resales are almost always available at a good price.

8. Get creative. There are lots of ways to lead the good life without paying top dollar. Buy a 2nd hand mobile home (or boat) and move south in the summer. If you live in a desirable place, swap or rent your home during the season and go on vacation. Swap your handyman skills for lower rent. Talk with everybody you know, read, and look online for different ideas.

9. Keep working. If you have a good job and you can save some money, consider working a few years longer to give yourself more options. Or, cut down your hours and semi-retire. Other options are looking for part-time work or starting a home based business. Is there a way you can make money with your hobby? If you want part time work, be careful about where you retire. Make sure there is industry nearby that matches your skills, or a vibrant tourist trade where part-timers are always in demand.

10. Be positive. Maybe everything hasn’t worked out the way you dreamed it would. Keep looking for the silver lining, and don’t waste your time complaining. You’ll be happier, and so will your friends and family.

Foreclosure/Short Sale Resources:
Redfin.com, Foreclosures.com, Foreclosure.com, Realtytrac.com, Zillow.com

Most Affordable Places to Retire
Most Affordable College Towns
Most Important Criteria for Best Place to Retire

What Are Your Ideas?
Please post your ideas for great retirement living on a budget in the Comments section below.