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Independent Senior Living Communities: Upfront Fee vs. Rental

It’s fair to say that a great deal of thought goes into choosing the right independent senior living community for you. There’s a lot to consider and the decision can be overwhelming without all the facts. Often times, there is confusion around the types of payment models these communities offer. Particularly, this confusion revolves around the difference between upfront or entrance fee communities and rental communities.

We’re going to cut through the jargon and give you the facts. As such, we’ve taken the mystery out of these terms and summarized the differences so you can make the best decision for you:

What is an upfront or entrance fee senior living community?

An upfront fee (also known as an initial entrance fee) plus a monthly service fee is typical for an independent senior living community like The Manhattan, which is coming soon to St. Pete. This upfront fee gives residents access to higher levels of care and services like assisted living. Additionally, the upfront fee offers financial advantages that save you money over time and on your future care expenses.

While it can vary by community, an upfront senior living community often includes more services, amenities, life enrichment opportunities, and thoughtfully planned events focused on holistic wellness for its members.

Outside of the upfront expense, many communities offer various refundable contract options with up to 90 percent of your upfront fee positioned to be returned to your estate or beneficiary. These options provide financial flexibility and security to align with your goals.

What is a rental senior living community?

As the name implies, you pay a monthly fee for your independent living residence at a rental senior living community. Often, these communities do not offer higher levels of care onsite. If they do, this care won’t be included in your independent living monthly fee. That means you’ll pay full market rates for any support or healthcare you may need.

The differences at a glance

Is an upfront fee or rental senior living community the better choice for you? Here’s a quick comparison.

Upfront Fee

  • Upfront fee at move-in with varying options for refundability (upfront fee typically paid for with proceeds from the sale of a home)
  • Peace of mind for the future with the assurance of priority access to any onsite healthcare services should you need them—and possible member discounts
  • The upfront fee can offset more expensive future care costs—providing predictability of expenses
  • Consistency of members and staff staying long-term
  • A portion of the upfront fee is considered a prepaid medical expense by the Internal Revenue Service—meaning tax deductions could be available.
  • Often, not-for-profit ownership offers future security with a lifetime commitment to residency and constant reinvestment in the community.


  • Community fee due at move-in with no option for refund
  • If there is care on campus, it would be on a fee-for-service basis and often open to anyone—If there is no care, you’re forced to look outside of the community you’ve come to know for the care you need
  • Undetermined future healthcare costs—the fear of not being able to pay for future health expenses is a top concern for seniors
  • Transient population with move-ins and outs monthly
  • No available tax deductions
  • Often, for-profit ownership, requires alternate housing to be sought if financial resources are exhausted, and profits are disbursed to stakeholders.

Which option is better? In reality, both upfront and rental models are worthwhile options for senior living in the right circumstances. Ultimately, your wants and needs for the future and your budget will drive your choice.

Independent senior living communities like The Manhattan, coming soon to St. Pete, want to help you make the best decision. They offer personal appointments to tour and explore options. This way, you can understand pricing options, the lifestyle offered, and items to consider in your journey.

To learn more about The Manhattan, contact us to schedule a personal appointment.