Co-ops vs Condos?

jane__nyMarch 8, 2011

My son is looking to buy a Co-op or Condo. Co-ops are much less expensive than condo's. We understand owning a Condo you own the actual apartment. Co-ops you own shares in the entire building. A 1-bed/bath co-op sells approx $75,000-$129,000.

Condo's, same size, same sq ft, start close to $220,00 and go up from there.

What are the pros and cons? Why do Co-ops cost much less? This is all new to us and don't want to get involved in something we don't understand.



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Shares are simply not as valuable or as desirable as actual property. The building is owned by a corporation....and the individual pays for the right to occupy a unit. Re-sale value is pretty much the lowest on the home "ownership" food chain outside of Manhattan or other major cities.

The co-op board usually gets to say who can buy and who can't...which can make the unit harder to sell. Those with the biggest units usually have more shares and therefore a bigger voice than those with small units or shares. The share holder is far more regulated in terms of what they can and can't do with their unit, since they don't own the unit. Everything has to be approved by the co-op board...including who buys the unit. I think they require a large down payment as well..and there are of course maintenance fees.

IMO, a co-op a glorified rental..with the co-op board as your pesky "landlord". A condo, IMO, is a much better choice..because it is an actual piece of real estate, and as an owner you have more control over your living space...with no restrictions on whom you may sell to if and when that time arrives.

    Bookmark   March 9, 2011 at 12:50AM
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We had a very bad experience with a co-op in NJ. We purchased in 1986 for 90K and within a few years the price was $25K. The monthly co-op fee was very high. After about ten years the co-ops were converted to condos.

    Bookmark   March 9, 2011 at 9:10AM
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On the resale side, Co-ops are very hard to sell.

I would also check the HOA fees every month. Usually CO-Op fees are a small mortgage. (although tax deductible), what you are saving in paying off your own mortgage with a condo, you are paying monthly in fees on a co-op.

    Bookmark   March 9, 2011 at 9:16AM
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I guess that explains why the selling prices are so much lower. Condo's are at least double that of co-ops. The maintenance charges are similar. Property taxes are high here and condo's have maintenance charges plus taxes. Co-ops have combined.

Lower prices of co-ops make them more attractive to single people who don't have high incomes. I don't think he could afford a condo.

Thanks for the information. It has been difficult to get a straight answer from agents.


    Bookmark   March 9, 2011 at 11:37AM
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