Co-op or Condo? The Top Seven Questions to Ask Yourself

Co-op or condo?  There are definitely advantages and disadvantages to each form of ownership.  Here are the top seven questions to ask yourself to help decide what's best for you:

Do I want to spend less money?  Answer: Co-op.  Co-ops generally cost about 20% less than condos.

What neighborhood do I want to live in?  Answer: It depends.  If you want a home on Lower Fifth Avenue, you're pretty much looking at a co-op.  If West Chelsea is more your style, you'll have plenty of condos to choose from.  Different neighborhoods can have different kinds of inventory.  As a rule of thumb, more established neighborhoods tend to be co-op heavy while recently developed areas have more condos.   High Line anyone?

What if I want or need to sublet at some point?  Answer: Condo.  While most co-ops will allow limited subletting, there are usually time (and other) restrictions, along with a lengthy approval process.  A condo is the better way to go.  And if this is an investment property, it's the only way to go.

Am I buying an apartment for my child?  Answer: Generally condo.  If you want to straight out buy an apartment for a child at NYU or just moving to the city, a condo is really the only option.  However, if the child is well-employed with a salary that can cover basic monthlies, some co-ops will allow substantial parental gifting, guaranteeing, or co-purchasing.  

Do I wish to purchase through a trust or LLC for financial planning purposes?  Answer: Condo.  There are co-ops that allow trusts, but we haven't seen one yet that will let you buy through an LLC.

Do I absolutely want to keep my private business private?  Answer: Condo.  Co-op applications are notorious for the amount of personal and financial information they require.  The plus side is when prospective buyers' finances are vetted, there is much less likelihood of their defaulting on their obligations and sticking their neighbors for unpaid monthlies.  It is this financial cushion which is credited with saving the New York market from the worst of the 2008 real estate debacle. 

Do I want to be able to renovate the way I want without getting it approved by some board?  Answer: Condo or co-op.  Trick question!  There's a misconception that co-ops are all in your business when you renovate and condos aren't.  The truth is they both will review your plans.  They're not passing judgement on your aesthetic choices (Purple kitchen cabinets? Go for it).  They just want to be sure that your construction doesn't compromise the building's structure, plumbing, or electricity and the work is done safely by insured contractors.  Inconvenience to neighbors can also be considered with some buildings capping proposed duration or even limiting work to certain months.  We can recommend inspectors and contractors for a professional's evaluation. 

Co-op or condo, we're more than happy to sit down for an in-depth review of your personal situation.