Coop vs Condo
The Difference between Condos, Co-ops, Condo-Ops
Condominiums
Condo apartments are "real" properties, much like owning a house. Condo units have their own deed and tax bill.
Pros:
In most cases, 10% down allowing up to 90% financing.
NO board approval.
Sublets are allowed.
Monthly maintenance fees are lower than co-ops.
Cons:
More expensive than comparable co-op apartments.
Monthly maintenance fees are not tax-deductible.
Co-ops
You don’t actually own your apartment. Instead, you own shares of a co-op corporation that owns the building. The larger your apartment, the more shares within the corporation you own. Maintenance fees cover building expenses including heat, hot water, insurance, staff salaries, and real estate taxes.
Pros:
Less expensive than comparable condominium apartments.
Some of your monthly maintenance fees are tax deductible.
Cons:
All purchasers must be approved by the Board of Directors.
Board approval process is time-consuming and rigorous…requiring extensive information regarding finances, employment, and personal background.
Monthly maintenance fees for co-ops are much higher than condos; the monthly fee may include part of the underlying mortgage for the building.
Co-op boards limit the amount of the purchase price that can be financed and require higher down payments.
Difficult to sub-lease a co-op.
Any renovation or upgrade to co-op must be approved by the board.
Cond-op
Refers to a residential Cooperative where the ground floor is converted into a separate "condominium" which is either owned by an outside investor or the original sponsor of the building. Thus, although the residential units are a co-op, the commercial units are owned as a condominium by an entity other than the co-op. The co-op does not receive the benefit of the income from these units.
Pros:
90% financing allowed.
Cons:
You don’t actually own your apartment. Instead, you own shares.
Townhouse
Provides you with a "fee simple" ownership of real property, the responsibilities include payment of all real estate taxes, maintenance and repairs of the property. Sale of a town house may be sold to any party without prior approval by anyone other than you, the homeowner. The Pro’s & Con’s are the same as Condominiums.
There are two Types of Town Houses:
Single Family
The property must only be occupied by one family, either owner or renter.
Multiple Family
You can occupy or lease out one of the units while leasing out the other units as income producing units.
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