What's better - a co-op or a condo?
Astoria, Queens listing by Real Estate Advisor Nicole Beauchamp with Engel & Völkers who lives and breathes FOLLOW YOUR DREAM. HOME.
Understanding the differences between a co-op and condo is crucial when making a decision that aligns with your lifestyle, financial goals, and personal preferences. So, let's explore - What’s the difference between these types of homes?
Co-ops and condos are similar in that residents live in separate apartments with shared common areas (hallways, lobby, roof terrace, community room, fitness center, etc.), but they have different rules and regulations, and while both are nonprofit corporations (or other legal business entities), the ownership structure of co-ops versus condos is different.
Co-ops, short for cooperative housing:
Affordability: Co-ops often have lower purchase prices compared to condos, making them a more affordable option for buyers on a budget. You do not outright own the apartment, but shares in the corporation with rights to a particular apartment via a proprietary lease.
Community and Control: Co-ops foster a strong sense of community and provide shareholders with a voice in decision-making processes. You have the opportunity to participate in shaping policies and rules that govern the cooperative, especially if you nominate yourself to the board to take an active role.
Stability and Security: Co-ops typically have stricter application processes and financial requirements, resulting in a more stable and secure living environment with like-minded individuals.
Board Approval: Buying a co-op requires going through a board approval process, which can involve submitting financial documents, personal references, and attending an interview. The board has the authority to accept or reject potential buyers. A great real estate broker will help you prepare for these 12 tough co-op board interview questions.
Restrictions and Rules: Co-ops often have more rules and regulations compared to condos. These can include limitations on renting out your unit, restrictions on renovations, and guidelines for noise levels or pet ownership.
Condos, short for Condominiums:
Ownership and Autonomy: Condo owners have more freedom and control over their individual units compared to co-op shareholders, and possess outright ownership of the particular apartment. You can make often decisions about renovations, leasing your unit, and property management without seeking board approval.
Amenities and Services: Condo buildings are generally newer builds, and often offer a larger range of amenities and services such as gyms, pools, and concierge services. These shared amenities enhance your living experience and provide additional convenience and luxury.
Flexibility: Condos offer more flexibility when it comes to renting out your unit. As a condo owner, you have the option to sublet your unit to tenants, which attracts investors that use them as investment properties providing potential rental income. Condos are also ideal for the ability to adapt to changing circumstances.
Higher Costs: Because of more freedom as listed above, condos generally have higher purchase prices compared to co-ops.
When deciding between a co-op and a condo, consider factors such as affordability, community involvement, ownership autonomy, and flexibility. It's crucial to thoroughly research and understand the specific rules, regulations, and financial implications of each option. By doing so, you can make an informed decision that suits your needs and preferences.
Stay tuned for Part 4 of our apartment buying series, where we'll discuss the importance of Size and Layout. Whether you choose a co-op or a condo, finding the right size and layout to fit your (and your family’s) needs plays a crucial role in your overall satisfaction with your new home.
For more resources on how co-ops and condos work, grab a download of the first chapter of Tina Larsson’s book Living the High Life, How smart co-op and condo owners protect themselves and their investment. You can also get the paperback or Kindle on Amazon.