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Is a co-op the right real estate option for you?

On Behalf of | Jul 18, 2022 | Real Estate |

Maybe you are looking into buying a condo in New York. Have you looked at an alternative to condos in New York City — co-ops? They may prove to be the right real estate purchase for you.

What is a co-op?

A co-op is an alternative real estate option in New York City. A condo is a residential home that you purchase shares in, in exchange for living there. So, while they are not a direct real estate transaction, they are still a form of affordable, sustainable housing.

Co-ops are generally a building or housing development that is owned by all those living in the individual units. It’s a type of nonprofit corporation. Each property owner is considered a shareholder. Like corporations, co-ops have a board of directors but all property owners, as shareholders, have a voice in how the co-op is operated.

How do co-ops differ from condos?

Co-ops are different than condos, as condos are independently owned. However, in a co-op you generally need the board’s approval to make both exterior and interior renovations to the unit. Also, in a co-op you may not generate the equity in your home as you would if you purchased a condo.

You pay monthly co-op fees to cover expenses such as the mortgage on the property as a whole. Expenses such as taxes, maintenance and utilities are split among all co-op residents based on their unit’s value.

A co-op may be attractive because, while it may cost more per month than a condo, your co-op fees cover expenses you would have to pay on your own if you owned a condo. It is an option those looking for real estate in New York City will want to keep in mind.