Co-ops or Condos in NYC: Which is a better fit for me?


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The co-op versus condo debate is an important one for anyone looking to buy a home in NYC. Your choice will have a significant impact on your finances and lifestyle, so it’s worth taking the time to understand what each offers before making a decision.

What Is the Difference Between a Co-op and a Condo in NYC?

A cooperative, better known as a co-op, is a type of housing in which the residents own shares of the property. To purchase one, you must be approved by the co-op board, which will consider your credit score, income, and other qualifications. Once approved, the buyer receives a stock certificate and a proprietary lease to the unit.

By contrast, condos are considered real property that owners purchase under a deed, rather than personal property in a co-op community. Condo owners are responsible for their mortgages, while co-op owners share in the responsibility for the property’s mortgage.

Both co-ops and condos have their pros and cons, but some key distinctions can help you decide which one is right for you. These include availability, sales price, house rules, monthly maintenance fees, and closing costs.

Availability: Are Co-ops More Common Than Condos?

Yes. In fact, co-ops account for 75% of apartments for sale in NYC compared to 25% in the condo market. In other words, co-ops offer a wide variety of options to choose from. But because co-ops are more popular, they can also be more competitive to buy into.

Sales Price: Are Co-ops Cheaper Than Condos?

Generally, co-ops are cheaper than condos. To give you an idea, the average co-op in NYC sold for $820,000 in the third quarter of 2021. Compare this to the median condo sales price of $1.6 million and you might consider overlooking the strict approval process and house rules that co-ops are known for.

House Rules: What to Expect from a Co-op

Most co-ops won’t allow owners to sublet their units unless they’ve lived in them for a certain amount of time. What’s more, most co-op boards will approve just one sublease for a maximum of two years per ownership cycle.

For example, let’s say you’ve recently accepted a three-year job assignment abroad and would like to move back into your co-op once the assignment is finished. The co-op board will allow you to rent out your apartment for only two of those three years, leaving you hard-pressed to either sell your unit or fork up the extra costs on year three.

Condos offer more freedom in this regard, as sublets are usually allowed with a 30-day notice to the condo board and are devoid of time restrictions.

Monthly Fees and Closing Costs: Where Can I Save More Money?

When it comes to closing costs and monthly common charges, co-ops typically offer more savings. This is because the buyer is not responsible for title insurance fees in a co-op sale, and there are no mortgage recording fees whatsoever. Condos, on the other hand, require both.

Additionally, common charges tend to be higher in a condo community because these are often newer and come with a suite of amenities, such as a pool, gym, golf simulator, and more.

Keep in mind, however, that most co-ops require a down payment of 20% or more, whereas some condos will accept a down payment of 10% or less, which can factor into your decision.

The Bottom Line: Are Co-ops a Better Alternative to Condos?

In the end, co-ops and condos have their set of benefits and drawbacks. If you’re looking for affordability, availability, and a greater sense of community, co-ops are the way to go. Alternatively, if you’re looking for more flexibility with your living situation and an easier approval process, condos are your best bet.

For more information on co-ops and condos in NYC, reach out to an Elegran advisor today!



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