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To help you compare the different types of properties, below is a description of each property type, along with the advantages and disadvantages of each. With the help of your Kurland Realty agent, you will now be able to make an informed decision about the type of property that is right for you.
CO-OP (Co-operatives)
Co-operative ownership is a unique form of ownership found almost exclusively in Manhattan. In New York City, co-operative apartments make up approximately 75 percent of all apartments available for sale, condos make up about 25 percent, and condops make up only a small fraction.
Co-ops are actually owned by an apartment corporation. You, as purchaser, are a shareholder in the corporation and own stock in said corporation, which entitles you to a “proprietary lease.” Generally, the larger your apartment, the more shares of the corporation you own, though factors such as location in the building, view and light are also taken into account. Co-op shareholders contribute a monthly maintenance fee to cover the building expenses, including items such as heat, hot water, insurance, staff salaries, real estate taxes and the mortgage indebtedness of the building.
ADVANTAGES
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Prices are substantially lower than for condos |
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Closing costs are much lower compared to condos |
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A portion of your monthly maintenance fee is tax deductible |
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All purchasers must be approved by the Board of Directors |
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High quality of life and comfort |
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High level of security |
DISADVANTAGES
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Minimum cash down set by Board of Directors, which is usually 20-25 percent |
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Purchasers are subject to a thorough review of financials and an interview for approval by the Board of Directors |
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Subletting is usually more difficult than in condos, often requiring approval from the Board of Directors |
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When selling, Board of Directors must approve the new buyer |
CONDOMINIUM
The appeal of owning a condo is the 10% down-payment, providing maximum financing ability, and that there is typically no Board approval. Notably, condo rules set by Boards and managing companies are becoming stricter and more selective, often conducting thorough background checks that include financial inquiries as well as requisite reference letters. Additionally, the prices of condos remain substantially higher than for co-ops, ranging from 10%-30% more. Yet, a condo is a “real property,” like owning a house, where the buyer receives a deed of ownership, and owns what is “between the walls.” Each unit has a separate tax lot and each purchaser must pay individual property taxes on his/her unit - these taxes are deductible. The deed also grants a small percentage of the "common elements" of the building such as the halls, stairwells, basement, etc. Each owner pays a "common charge" to the condominium association to pay for items such as heat, hot water, repairs and employee salaries. This monthly fee is not tax deductible.
ADVANTAGES
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Financing is flexible - often up to 90 percent |
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Typically, there is no Board interview |
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Rejection is extremely rare |
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Subletting is usually flexible |
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Investors are permitted |
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Own real estate |
DISADVANTAGES
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Prices are usually much higher than in a co-op |
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Closing costs are higher than in a co-op |
COND-OPS
Cond-ops are a hybrid between co-ops and condos. They are co-ops with condo rules. When buying a condop, you are buying shares of stock in a corporation (co-op) but there is typically no Board interview and rejections are as rare.
ADVANTAGES
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No Board approval necessary |
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Rejection is extremely rare |
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Subletting rules are usually extremely flexible |
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Price lower than that of a condo |
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Monthly maintenance fee is tax deductible |
DISADVANTAGES
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Prices are usually higher than in a co-op |
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Higher interest rate on financing than on a condo |
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