Choosing Rental Versus Entrance Fees in Senior Housing

Choosing Rental Versus Entrance Fees in Senior Housing

Many seniors or adult boomer children looking for housing struggle to understand the difference between selecting a month-to-month rental choice vs. selecting an entrance fee at a Continuing Care Retirement Community.  I have seen people create excel spreadsheets in order to understand what may have better financial implications in the long run for their family member.

A couple of key question to ask yourself in your search for senior housing are:

  • How long do you plan to live? (I know it’s a tough question, but are you living a healthy lifestyle now?  The age of parents at death can be a small factor, but how you treat your body with exercise and eating healthy is considered a key to aging well now.)
  • Do you have long-term care insurance? (Having it can be considered an asset, but it comes with an expensive monthly fee and some policies have limits of two or three years of maximum care in a skilled nursing center.  Older policies do not include in-home care or assisted living, so check your policy.)
  • Can your savings and assets survive, if you and/or your spouse needed assisted living or skilled nursing care for 5 or more years?

The average cost of Skilled Nursing Care on a national basis runs between $6,500 and month and $9,500 a month according to a national Metlife survey.  Why is this cost important?  Because this is a cost that can quickly wipe out your savings account.

Month-to-month retirement community rentals offer no protection for the future…what if you live there for eleven years and run out of assets?  If you can’t make your monthly fee – you would be asked to leave period.  There is no long-term contract with you.  We have all read articles in the newspaper talking about someone spending $300,000 plus at a rental community over the years and then being turned away because they ran out of assets.  You might be asking yourself – could this really happen to someone?

Well, my own mother ran out of her resources after living in a Continuing Care Retirement Community for eleven years.  She had not anticipated living in a higher level of care for three plus years.  It was horrible when her annuity and assets shrank and she was unable to pay the full monthly payment at her Assisted Living.  The great news is that she was not asked to leave.  Her Continuing Care Retirement Community in Seattle had never asked anyone to leave because of financial reasons.  What a relief for my mom and my family…

Many Continuing Care Retirement Communities offer a guarantee of care for the rest of your life, if you outlive your resources.  What incredible peace of mind this provides for residents and their family members.  Yes, this guarantee comes with the price of an entrance fee and those vary nationally.  I represent a Continuing Care Retirement community in California, whose entrance fees start at $55,000.  What a reasonable price, it’s less than the cost of one year of Skilled Nursing Care… Plus, when a resident pays an entrance fee, the monthly fees at Continuing Care Retirement Communities tend to be much lower than month-to-month rentals.

What are your thoughts on rentals versus entrance fees?

Diane Twohy Masson is the author of “Senior Housing Marketing – How to Increase Your Occupancy and Stay Full,” available for sale at  If your curiosity is piqued to inquire on Diane’s availability to speak at a senior housing conference (CCRC, independent living, assisted living, skilled nursing or memory care) – please call: 206-853-6655 or email  Diane is currently consulting in Southern California for Freedom Management Company, the proud debt-free owners of Freedom Village in Lake Forest and The Village in Hemet, California.  For more information:   Twitter: @market2seniors Web: Blog: