- Relocation.com - http://blog.relocation.com -

Co-op or Condo, Which is Right For You?

Posted By relocation On January 20, 2010 @ 4:17 pm In | No Comments

Buying your first apartment [1]is such and exciting time. In addition to choosing which neighborhood to move to and seeing all that is out on the market, you are invariably confronted with the question: should you go for a condo [2]or a co-op [3]?

The first thing you’ll notice is that condos usually cost more. That’s because buying a condo is more like buying a house. Buyers own their deeds and pay taxes. The good news is the percentage down-payment requirements are smaller and you can sublet condos more readily than co-ops.

Co-op is short for “cooperative housing project,” and you technically don’t own your apartment, as you do with a condominium. Instead, you own shares of the co-op corporation that owns your building. The larger the living unit, the more shares you own in that corporation.

While you’ll pay less money for a co-op you need to keep in mind the board, run by other shareholders, will have a bigger say in almost every facet of living.

As thus, everything that happens in a co-op must be approved. From purchase, when the board checks personal background and finance information, as well as comprehensive employment history and background checks; to any renovation that goes on in the apartment; to subleasing, which in many cases, is not allowed at all. Moreover, co-ops require larger down payments than condos, and those all-encompassing maintenance fees are higher than in condos, although they are tax-deductible.

Finally, selling a co-op can be little harder than selling a condo. Some boards assess a “flip tax” if you resell within a set period, such as one to three years.
So, depending on your financial status, how much money you have for a down payment and how much you want to be part of a group, you can decide for yourself whether you wish to go condo or co-op.

Related Articles:
First-Time Homebuyer: What You Need to Know [4]
Mortgages: The Realist’s View of How Much You Can Afford [5]
Five Key Steps to Landing a Mortgage [6]


Article printed from Relocation.com: http://blog.relocation.com

URL to article: http://blog.relocation.com/co-op-or-condo-which-is-right-for-you/

URLs in this post:

[1] Buying your first apartment : https://www.relocation.com/real_estate/

[2] condo : https://www.relocation.com/library/real_estate_guide/buyer_guide/condominiums.html

[3] co-op: https://www.relocation.com/library/real_estate_guide/buyer_guide/co_op.html

[4] First-Time Homebuyer: What You Need to Know: https://www.relocation.com/library/real_estate_guide/buyer_guide/first-time_homebuyer_guide.html

[5] Mortgages: The Realist’s View of How Much You Can Afford: https://www.relocation.com/library/mortgage_guide/affording_mortgage.html

[6] Five Key Steps to Landing a Mortgage: https://www.relocation.com/library/mortgage_guide/landing_a_mortgage.html

Copyright © 2014 Relocation.com. All rights reserved.