What is an entrance fee and what does it really cover? Forefront Living CEO, Tim Mallad, and CFO, Steven Ailey, sit down to discuss how FL’s entrance fee model works, how it compares to rental communities and what prospective residents and their families should consider when evaluating the long-term value of senior living.
For someone considering a continuing care retirement community (CCRC), the entrance fee can be one of the biggest questions. But just looking at that initial number doesn’t provide the full picture. While a portion of the fee may be nonrefundable, it helps support the community’s services and infrastructure. Another difference is the amount of common space available for residents to enjoy. Entrance fee communities typically have larger dining areas, more extensive fitness facilities and dedicated staff to support those amenities and activities. Rental communities may have smaller fitness centers and fewer dedicated spaces for programming, with residents often taking a more active role in organizing activities. Rental communities generally do not require an entrance fee, but monthly costs are typically higher.
There’s also more than one way to structure an entrance fee. Communities may offer contracts with different refund options, allowing residents to choose between a larger potential refund and a lower upfront or monthly cost. The best option depends on what matters most to the individual, such as how long they expect to stay, how much they want to save for their estate and how much monthly income they want available for other expenses and experiences. Before deciding, prospective residents and their families should carefully read the contract, compare the entrance fee and monthly costs, review the organization’s financial history and understand what is provided if future care is needed. When you look at the whole picture rather than just the upfront price, you get a better sense of the long-term value of the community.