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I have been to at least 100 master planned communities and can offer these observations:
1. Fancy entrance, the more luxurious the community the nicer the entrance. They range from a stone/brick wall to a long treed road with a manned gatehouse. Almost every community puts a lot into their entrance.
2. Amenity center. This is another "must have" in almost every community. They range from a meeting space to luxurious buildings with a pool or 2, restaurants, community meeting rooms, fitness center, bar and anything else you can imagine. You of course pay for this in terms of a higher HOA fee, the fancier and more exclusive the community the more you pay. If its a huge community of 1000's of houses its lower, but the facilities may be crowded. Some communities have amenity centers only for residents with correspondingly high fees.
3. Equity buy in - some exclusive Golf communities have equity buy-ins which can range from several thousand up to 100 thousand or more. I have noticed this more in SE Florida. It can have a detrimental effect on resale because the buyers have to come up with the equity buy-in and their down payment. They usually have higher HOA fees as well.
Some things to keep in mind:
Resale - if a community is not finished (and some never are) you are competing against new houses with incentives and unless you are planning to stay awhile you can take a beating on your investment. Its a good deal if you are buying but not so good if you are selling.
Completion - some communities never get finished and the original builder may go bankrupt and the amenity center may never get built. They usually wait until a certain amount of houses are sold before they start construction, you also have to deal with construction noise and activity.
HOA fees - sometimes the developer will subsidize the HOA fees and after the project is done and the developer moves on to the next project your HOA fees can skyrocket. HOA fees pay for maintenance and upkeep of your community. There are also HOA boards which tell you what you can or cannot do with your property. These are called "deed restricted" communities which may or may not be good depending on your outlook. Some folks hate being told what to do while, others prefer a nice clean orderly community.
CDD fees - in some newer communities there are CDD fees "A community development district (CDD) is a local, special-purpose government framework authorized by Chapter 190 of the Florida Statutes as amended, and is an alternative to municipal incorporation for managing and financing infrastructure required to support development of a community". In layman terms, you pay for a period of time the costs the developer incurred building your community. A CDD issues bonds for financing infrastructure improvements such as roads, sewer, water, and community amenities such as swimming pools,clubhouses, parks, etc. The CDD will last for a period of years and has 2 components, one for paying for the improvement and another for continuing maintenance. The improvement part has a finite term whereas the maintenance does not. The may be an HOA fee on top of this. CDD fees can have a detrimental effect on resale as well.
Lot size - many new communities have small lots because of the skyrocketing cost of land acquisition. As you look around you will notice most communities look the same if you ignore the amenity center and concentrate on your house. There is also a dearth of trees which comes with clear cutting the land to build your community. It cost more to retain the trees and many don't bother.
Water features - many communities have lakes and retention ponds scattered throughout the development and some have fountains. They can contain undesirable wildlife (gators, snakes) but are nice to have.
This is Florida Master Planned Communities in a nutshell. Welcome to Florida
I have been to at least 100 master planned communities and can offer these observations:
1. Fancy entrance, the more luxurious the community the nicer the entrance. They range from a stone/brick wall to a long treed road with a manned gatehouse. Almost every community puts a lot into their entrance.
2. Amenity center. This is another "must have" in almost every community. They range from a meeting space to luxurious buildings with a pool or 2, restaurants, community meeting rooms, fitness center, bar and anything else you can imagine. You of course pay for this in terms of a higher HOA fee, the fancier and more exclusive the community the more you pay. If its a huge community of 1000's of houses its lower, but the facilities may be crowded. Some communities have amenity centers only for residents with correspondingly high fees.
3. Equity buy in - some exclusive Golf communities have equity buy-ins which can range from several thousand up to 100 thousand or more. I have noticed this more in SE Florida. It can have a detrimental effect on resale because the buyers have to come up with the equity buy-in and their down payment. They usually have higher HOA fees as well.
Some things to keep in mind:
Resale - if a community is not finished (and some never are) you are competing against new houses with incentives and unless you are planning to stay awhile you can take a beating on your investment. Its a good deal if you are buying but not so good if you are selling.
Completion - some communities never get finished and the original builder may go bankrupt and the amenity center may never get built. They usually wait until a certain amount of houses are sold before they start construction, you also have to deal with construction noise and activity.
HOA fees - sometimes the developer will subsidize the HOA fees and after the project is done and the developer moves on to the next project your HOA fees can skyrocket. HOA fees pay for maintenance and upkeep of your community. There are also HOA boards which tell you what you can or cannot do with your property. These are called "deed restricted" communities which may or may not be good depending on your outlook. Some folks hate being told what to do while, others prefer a nice clean orderly community.
CDD fees - in some newer communities there are CDD fees "A community development district (CDD) is a local, special-purpose government framework authorized by Chapter 190 of the Florida Statutes as amended, and is an alternative to municipal incorporation for managing and financing infrastructure required to support development of a community". In layman terms, you pay for a period of time the costs the developer incurred building your community. A CDD issues bonds for financing infrastructure improvements such as roads, sewer, water, and community amenities such as swimming pools,clubhouses, parks, etc. The CDD will last for a period of years and has 2 components, one for paying for the improvement and another for continuing maintenance. The improvement part has a finite term whereas the maintenance does not. The may be an HOA fee on top of this. CDD fees can have a detrimental effect on resale as well.
Lot size - many new communities have small lots because of the skyrocketing cost of land acquisition. As you look around you will notice most communities look the same if you ignore the amenity center and concentrate on your house. There is also a dearth of trees which comes with clear cutting the land to build your community. It cost more to retain the trees and many don't bother.
Water features - many communities have lakes and retention ponds scattered throughout the development and some have fountains. They can contain undesirable wildlife (gators, snakes) but are nice to have.
This is Florida Master Planned Communities in a nutshell. Welcome to Florida
Excellent summation. However, to that I would add, there is also something called "developer fees" or "amenity fees". This is sort of a new/old wrinkle based on the model of Florida's most notorious 55+ community, The Villages. It's where the developer "retains an interest" and basically owns and manages the streets, the common areas and the amenities. Instead of an HOA fee, you pay the developer. And the developer can raise those fees pretty much any time they want. The higher the developer fees, the lower the prices on the houses, generally.
It provides a nice income stream for the developer. Someone bought the house and the land it is on, but in essence, they're paying a sort of "lot rent" as if they lived in a mobile home park. And they can't move the home to get away from the escalating fees. In The Villages, the developer actually owns the hospital. Local governments LOVE this model. They get to collect the tax money while the residents pay the developer for the maintenance of the streets and other stuff.
I'd avoid a golfing community if you're on a fixed income. It's becoming less and less popular and why should you pay for it if you don't play? Furthermore than that, who really owns the golf course in your community? And what if that entity decides to shut it down and let it sit there and does little or no maintenance? There are a number of communities in Florida dealing with this issue right now. How'd you like to have purchased a nice home with a "golf course view" only to find out, years later, that now you've got a nice view of a scaggy, weedy bunch of land. Which may, in fact, eventually be developed and now you're staring into someone's lanai?
Check out the foreclosures in some of the 55+ communities. How does this happen? It's not that the people can't afford the house they bought or the utilities, they suddenly realize they can't afford the fees on a fixed income and decreasing pensions. They don't need "amenities". Maybe just a pool and little club house. They just want a nice, safe, modest place to live out their days.
Excellent summation. However, to that I would add, there is also something called "developer fees" or "amenity fees". This is sort of a new/old wrinkle based on the model of Florida's most notorious 55+ community, The Villages. It's where the developer "retains an interest" and basically owns and manages the streets, the common areas and the amenities. Instead of an HOA fee, you pay the developer. And the developer can raise those fees pretty much any time they want. The higher the developer fees, the lower the prices on the houses, generally.
It provides a nice income stream for the developer. Someone bought the house and the land it is on, but in essence, they're paying a sort of "lot rent" as if they lived in a mobile home park. And they can't move the home to get away from the escalating fees. In The Villages, the developer actually owns the hospital. Local governments LOVE this model. They get to collect the tax money while the residents pay the developer for the maintenance of the streets and other stuff.
I'd avoid a golfing community if you're on a fixed income. It's becoming less and less popular and why should you pay for it if you don't play? Furthermore than that, who really owns the golf course in your community? And what if that entity decides to shut it down and let it sit there and does little or no maintenance? There are a number of communities in Florida dealing with this issue right now. How'd you like to have purchased a nice home with a "golf course view" only to find out, years later, that now you've got a nice view of a scaggy, weedy bunch of land. Which may, in fact, eventually be developed and now you're staring into someone's lanai?
Check out the foreclosures in some of the 55+ communities. How does this happen? It's not that the people can't afford the house they bought or the utilities, they suddenly realize they can't afford the fees on a fixed income and decreasing pensions. They don't need "amenities". Maybe just a pool and little club house. They just want a nice, safe, modest place to live out their days.
Then there are developments where the HOA is low even after the developer turned the development over to the home owners, nice "town" area with restaurants, markets, gym, beauty salons, etc and while a golf course and club house and pools exist, joining is voluntary and you only pay a yearly fee if you join. Nice quiet area with hiking trails, ponds with fountains (Checked regularly for alligators) sidewalks with street lights and even an association that is quite reasonable as to what you can and cannot do. And my favorite, 8 miles to the beach.
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