The Great NYC Real Estate Debate: Co-ops vs. Condos - Choosing the Right Property Type for Your Lifestyle and Budget

Rosemarie Tucker April 4, 2023


Are you ready to say goodbye to renting and embrace homeownership in NYC? Or maybe you're in search of your dream home. Either way, it's crucial to understand the two primary types of residential buildings you'll come across: co-ops and condos. If you're feeling a bit lost, no need to fret - we're here to provide you with the ins and outs of co-ops vs. condos in NYC. Wondering why condos tend to have higher prices than co-ops? Curious about what exactly a co-op is? We've got all the answers and more, so get ready to explore the exciting world of NYC real estate!

What’s the Difference Between a Co-op and a Condo?

When it comes to purchasing a home in New York City, prospective buyers may come across two popular options: co-ops and condos. While these two types of residences may seem similar at first glance, they have distinct differences that buyers should be aware of before making a decision.

A co-op, short for cooperative, is a type of housing where buyers purchase shares in a corporation that owns the entire building. Each shareholder has the right to occupy a unit in the building, but they do not own the unit itself. On the other hand, a condo, short for condominium, is a type of housing where buyers own the individual unit and a percentage of the common areas.

Are Condos More Expensive Than Co-ops?

One common misconception is that condos are more expensive than co-ops. While it’s true that condos typically have higher asking prices, they often have lower monthly maintenance fees than co-ops. In a co-op, the monthly fee covers the building’s operating expenses, including property taxes, utilities, and maintenance. In a condo, the monthly fee typically only covers common area expenses.

There Are More Co-ops Than Condos in NYC

Despite the higher demand for condos in recent years, there are still more co-ops than condos in NYC. This is partly due to the fact that co-ops were the dominant form of housing in NYC before the emergence of condos in the 1970s.

What About Subletting Policies?

If you’re planning on subletting your property, it’s important to note that co-ops tend to have more restrictive subletting policies than condos. Board approval is often necessary for subletting in co-ops, and there are typically rules in place that limit the duration of subletting or rental periods. In some cases, this may be limited to one or two years, after which you may be required to move back in or leave the unit empty. Condos, on the other hand, typically have more lenient subletting policies.

Many Home Buyers Prefer New Construction

For buyers who prefer new construction, condos may be a better option. While there are some new co-op buildings being built in NYC, they are relatively rare. Condos, on the other hand, are more likely to be newly constructed.

Condos Have More Amenities

If access to amenities is important to you, condos may be the better choice. Condos often offer amenities such as gyms, swimming pools, and rooftop gardens, while co-ops may have fewer amenities or none at all.

Approval Process for Co-ops vs. Condos

Co-ops impose more restrictions on transactions and require potential buyers to undergo a difficult and lengthy approval process by the co-op board. The board has the power to reject a buyer for various reasons, including their character, without the obligation to provide a reason for the denial. If a buyer is denied by the co-op board, they will have to look for another property, which can cause delays and additional expenses. 

In contrast, condo boards only have the right of first refusal when they receive an application for purchase. They can either buy the property at the contract price or waive their right and allow the transaction to proceed. Overall, the condo approval process is simpler than that of a co-op. condos typically do not have the same cash liquidity requirements that co-ops do. Buyers may be able to finance a larger portion of the purchase price and have more flexibility in obtaining financing. This can make it easier for buyers to purchase a condo and potentially reduce their monthly payments.

Do Co-ops and Condos Have Different Down Payment Requirements?

Co-ops and condos may have different down payment requirements, with co-ops typically requiring a higher percentage down payment than condos. Co-ops may require up to 20-50% down payment, while condos typically require a 10-20% down payment.

Do Condos Have Higher Closing Costs?

Condos may have higher closing costs than co-ops, due to the fact that condos require the buyer to pay a mortgage recording tax. This tax is based on the purchase price of the unit and can be a significant expense.

Co-op vs. Condo: Which Is a Better Value?

Ultimately, whether a co-op or condo is a better value depends on your individual needs and preferences. While condos may offer more amenities and less stringent approval processes, they often come with higher asking prices and closing costs. Co-ops, on the other hand, may require higher down payments and have more restrictive subletting policies, but can offer a sense of community and may be more financially stable due to their ownership structure.

It's essential to consider all aspects of both options before making a decision. For instance, if you prioritize access to luxury amenities and a more relaxed approval process, a condo may be the way to go. However, if building a sense of community and having more control over the building's financial stability is a priority, a co-op could be the better option.

It's also worth noting that location can play a significant role in the decision between a co-op or condo. In some areas, co-ops may dominate the market, while in others, condos may be more prevalent.

At the end of the day, the best choice is the one that aligns with your lifestyle, budget, and long-term goals. With a clear understanding of the differences between co-ops and condos, you can confidently make an informed decision and embark on an exciting journey as a new homeowner in NYC.


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