Condo Vs. Coops In NYC Real Estate

Now let's talk about the approval process, so for a condo there's not really an approval, there's a waiver that the condo gives. Still a board application, but pretty straightforward with a co-op, you will need a formal approval from the co-op board. This is after a board application and after a board interview.

If you're financing and getting a loan through a bank, a condo, usually you can get 10% down with a co-op, you usually are working between 20 to 50% down payment, sometimes even 100%.

When it comes to what you'll be paying on a monthly basis, especially looking at a property online, you'll see some variations with a condo. There are two monthly fees you're paying, one of them is the real estate property taxes and the other are the common charges. Basically the cost for operating the building. With a co-op you're only going to have one fee, a maintenance fee that encompasses everything.

Moving into closing cost usually condo is more expensive because you're paying a mortgage recording tax and you're also paying title Insurance. In a co-op because you're a shareholder, you don't have title insurance, and you don't have mortgage recording tax.

Now if you're an investor, there's some really important differences between a condo and a co-op. Investors typically target condos because there are less restrictions in the ability to actually rent out the apartment and have rental income. Co-ops will have a lot more in the way of subletting barriers, some allowing a couple years every few years, some allowing only a certain amount of years for the lifetime of ownership. So co-ops are not typically as favored by investors.

People who are looking for more flexibility tend to favor a purchase with a condo. You're able to rent it out, you could use it also as a pied-à-terre, you could have family coming in. It's much easier to live in a condo if you need the flexibility, a co-op does not have the flexibility in the same way.

So, when it comes to resell and appreciation, condos are typically the way to go. We'll see a faster growth of appreciation with condos due to higher demand and fewer restrictions, much more so than we would see with a co-op, which does have restrictions along the lines of board approvals and other purchase scenario restrictions.

So we've told you about the differences between purchasing a condo and a co-op. Give us a call and we'll figure out what is best for you.