How do I know if a senior living community is financially stable?
When you decide the time is right to move into a senior living community, you should expect that the community will review some of your finances – they want to make sure you can cover the costs associated with living there.
But before you choose a continuing care retirement community (CCRC), you should review its finances as well. After all, you expect it to provide housing for you for life.
A big question to ask is whether the community or its parent company are financially stable to continue to support you as you age.
Here are some factors to consider:
• Is there a board of directors?
A strong board of directors may include people of diverse backgrounds. Board members often bring experience from different industries. They’re tasked with holding the company’s senior leadership accountable and ensuring decisions are financially sound.
• Is the leadership team experienced?
Look into whether the community is led by an experienced team that understands how to best serve residents. Ask if they have current strategic and marketing plans -it could signal that they have plans for the future.
• Is the community meeting its financial responsibilities?
If you want to see whether a community and its parent company are doing well financially, look for strong financial ratios related to liquidity, debt, and profitability.
If a company uses debt financing, they’re held to financial covenants by their lenders. Review whether they’re meeting those covenants or if they have any violations.
Also review whether the company’s operations generate a positive cash flow from resident fees. Although a negative cash flow may be acceptable for short periods of time, it shouldn’t be the trend. You want to ensure the company’s income is sufficient to cover its annual operating expenses.
You also want to look at whether the company’s current assets exceed its current debts.
Financial documents for any business, including senior living communities, can be complicated. It’s best to consult with a qualified accountant who can help you analyze financial statements.
• What’s the community’s occupancy rate?
High occupancy shows a strong demand for the community, especially when it comes to independent living. Equally, an established, successful community should have a low turnover of independent living units.
It may be worth exploring beyond a community’s current occupancy rate and looking for trends over the past several years.
• Does a community have refundable entrance fees?
An entrance fee is a one-time payment paid when you sign a contract to move in. Many communities, like Topeka Presbyterian Manor, offer refundable entrance fees, paid back to you when you leave the community and the residence becomes occupied by someone else.
Be sure to review the terms and conditions of the refund provision in a contract. Find out if there are any time limits and how long it takes, on average, to resell a unit, so there are no surprises if you expect a refund.
About Topeka Presbyterian Manor and its parent company PMMA®
Topeka Presbyterian Manor has been serving Shawnee County since 1962 with independent living, assisted living and long-term care options. It also offers a short-term rehab program.
Independent living residents can choose one of two financial plans:
• A plan with monthly accommodation fee and no-upfront fees or non-refundable deposits.
Or
• The 75/25 deposit of care (entrance fee) plan. It allows you to pay a deposit when you move in with 75% of that deposit designated to be refunded to you or your estate when you leave the community, and the residence becomes occupied.
If you need guidance deciding whether Topeka Presbyterian Manor is right for you, contact us at 785-272-6510 and we’ll answer your questions. You can also fill out a form with your information.
Topeka Presbyterian Manor’s parent company is celebrating its 75th anniversary in 2024.
PMMA (Presbyterian Manors of Mid-America®) was first established in 1949 when the first community opened in Newton, Kan. Its founder is Alice Kalb, who, at 90 years old, asked the Presbyterian Church to build a home for seniors that could take her in.
PMMA is a 501(c)3 not-for-profit, and faith-based organization that’s driven by its mission to provide quality services by Christian values. Financial resources and profits go toward its 15 communities in Kansas and Missouri, like Topeka Presbyterian Manor to continue providing quality care for its residents and area seniors. PMMA has invested in renovating and upgrading many campuses over the years with the goal of improving residents’ quality of life.
Thanks to PMMA’s Good Samaritan program, residents who have outlived their financial resources through no fault of their own are allowed to continue to live in our communities.
Despite ownership changes at many communities in the senior living industry, PMMA is committed to building relationships for the long-term.
The organization maintains a volunteer board of trustees. Board members come from both Kansas and Missouri and their job is to hold PMMA and its leadership accountable so that decisions always put residents first.
The above article was partly written by Brad Breeding of myLifeSite and is legally licensed for use.
