How Do You Know If a Co-Op Is for You?
Do you know the difference between living in a condo, an apartment or a co-op? Though they might seem similar, co-ops operate on a very different level when it comes to buying. Here’s how they differ from other options:
You buy into a corporation. You don’t own real property. When purchasing a condo or apartment you’re buying that specific unit all for yourself. But when you buy into a co-op, you don’t own the actual unit. Instead, you purchase shares of a corporation that will grant you exclusive use of the unit you’ll live in.
Co-ops may cost less per square foot. Although co-ops could cost less per square foot than condos, the monthly fees are usually higher with co-ops. Those fees go toward anything from the building’s mortgage and taxes to on-site amenities, security, and maintenance.
You’ll need to play by different rules. Since you don’t own the unit you’re living in you’ll have to abide by the rules of the whole organization. Typically, you can’t sublet or rent out your unit, you might have pet restrictions, and there may be rules for how you can decorate or use shared areas of the building. Co-op rules may even limit what appliances and features you can add to your unit. Always read the fine print.
Another important difference: Large co-ops are run by a board of directors that will have the final say in who can purchase stock and live in the building. Smaller co-ops are run jointly by all residents. If you’re interested in buying into a co-op, you’ll likely need to provide a package containing financial documentation, character references and other information to be reviewed.
Is there a co-op you’ve got your eye on? Do you need help putting together an impressive board package? Please get in touch.
Nicole Kasten | Colfax Realty Group
Licensed Broker Associate
Phone: (786) 266-7523