CONDO VS COOP – WHICH IS THE BEST INVESTMENT?

Real Estate News

Are you looking to invest in New York City Real Estate? Planning to purchase a new Apartment?

In New York City there are three types of building structures;  Condos, Coops and Condops. Each building structure offers advantages and disadvantages. Lets have a look at all three:

Condos

• Advantages
  • Buyer owns the real property
  • Flexible sublet policy
  • Can rent as investment
  • Pied a Terres allowed
  • 90% financing
  • Easier board approval process
  • Less reserves required for board approval process
  • Greater pool of buyers when reselling due to limited board approval process
• Cons
  • Higher closing cost
  • New construction may include buyer paying transfer tax
  • Price of a Condo is typically higher than other building structures

Coops

• Advantages
  • Less expensive than Condos
  • More value for your money
  • Maintenance tax deductibility
  • Lower closing costs
  • No title search
• Cons
  • Own shares and not real property
  • Lengthy board application process
  • Stringent board review in some cases
  • Minimum reserve requirement after closing
  • Strict income/debt ratio required
  • Strict sublet policy in some cases
  • Certain coops do not allow pied a terres, guarantors or co-purchasers

Condops (This is an underlying Coop) 

• Advantages
  • Hybrid between Condos and Coops
  • Less expensive than Condos
  • More value for your money
  • Maintenance tax deductibility
  • Lower closing costs
  • No title search
  • Easier board approval process
  • Flexible sublet policy
• Cons
  • Few Condops in New York City

After looking at all three building structures, my thoughts are as follows:

1. If money is no object, a Condo is a better investment
2. If you are on a relative budget and prefer more space for your money, a Coop is the way to go
3. Condops are excellent for many buyers, but inventory is limited