Co-ops Versus Condos - Which Are The Better Choice?
Coops or “cooperative housing projects” existed before the condominium ownership scheme. Instead of owning your apartment, you own the shares of the corporation that owns the building, wherein the number of shares are in proportion to the size of your apartment.
There is a monthly fee you will have to pay if you own a coop. These will contribute to staff salaries, insurance, real estate taxes, heat, and of course hot water. This monthly fee can certainly add up if property taxes, utilities, and maintenance are added on. For some, owning a coop is too pricey on a month to month basis, but you should remember that some may be tax deductible.
Another issue with co-operatives is that you may have to put more money up front and that finding finance can be hard as many institutions will not lend toward a co-op. Also, you will need to be granted permission from the co-op’s ruling body. This can be a long and drawn out process, and will often include all sorts of proof on income and personal references.
There is one advantage that coops have. The transfer of the apartment is a much simpler task, as it is considered to be a transfer of shares.
But you have to take other things into consideration with a condo, as the apartment is yours, meaning that you are a property owner. This is reflected in the cost of the condo compared to the co-operative, and also in any tax that you will pay.
Although you will not have to pay as much each month, the payments cannot be deducted from your tax bill like they can with a co-operative. You won’t need to have as much up front as you will be able to get more in the way of financing.
There is no Board of Directors that you have to seek for approval so there are no background checks, interviews or getting letters of recommendation to contend with. There are no restrictions as well on subletting since you own the unit.
There is a flaw with condos though, as you have no control over your neighbors. Without an approval process, it is much easier to get uncivilized neighbors living beside you.
This author has been publishing commentary on condos for the past two years. Additionally, the individual enjoys writing on NYC neighborhoods, including Midtown apartments as well as Central Park homes.