Living in Coop vs Apt?

Is it better to live in a coop or an apartment? I noticed that there are maintenance fees plus a mortgage to pay every month for a coop.

For example: martgage each month could be $800 and then the maintenance could be $800. Then there is the utilities bill.

Apt. is paying rent and utilities.

Am I right? Please help, I'm trying this out. I found a coop online, and now I am curious about possibly living in one instead of an apartment.

My FH and I were looking into co-ops but decided to buy a house instead.

With a co-op you own shares of stock in a corporation. You don't actually own the space you live in. You have to be approved by the board to get into a co-op and you must live by their rules. Basically don't expect to do anything to the outside of your co-op that would make it look different or they could fine you or even ask you to leave. If you can live with all the rules placed on you a co-op is a good way to start out in the real estate world.

Personally I think a condo would be better (and it costs basically the same) but you get a deed therefore you have ownership. The same rules apply with condos though. While you don't need board approval to live there you can't make any changes to the outside without a board giving the okay.

The maintenance fees do add up to be quite a bit. When we were looking at co-ops and condos the maintenance fees were anywhere from $200-500 each month. Factor in mortgage, utilities and home owners insurance and it could be a huge amount of money.

Also what most people don't realize when looking into co-ops and condos is the 'other fees'. This means that if the board decides they want new siding on the outside of your co-op or condo you have to pay your part for it. If they want to fix the swimming pool or tennis court that comes out of your pocket as well. Leaky roof? Guess who pays for it? You again. Each condo or co-op is assigned a number of votes which also effects the amount they have to pay. If you go for a place with 2 bedrooms for you and your fiance you'll be paying more than someone living across from you that has 1 bedroom. So basically if you are living on a very tight budget and don't plan for those things you can screw yourself big time.

We opted to buy a house because honestly a house ended up being $100 more per month than a condo or co-op when you factored in maintenance and everything. We decided that the extra $100 is worth being able to do whatever we wanted. So we have to shovel our own snow and mow or our own lawn but at least we completely own the driveway and lawn.

If you want to get your foot in the door and build some equity I would say look into condos. If you can afford it it definitely is a lot better to have a deed and build equity instead of shelling out money and getting nothing in return.

Oh and I don't know if you have pets but some co-ops don't allow pets or they are strict about the breed of animal.

Condos are more expensive than coops, for the reasons that were stated above. But, the maintenance is generally cheaper. I live in a condo and they decided to redo the maintenance....lets just say the maintenance was literally 4X the normal amount for one month. It's true, you build equity and credit, which is important for your next big purchase.

Also, you have to follow the rules of the condo board too! We couldn't knock down a wall by the kitchen without getting in trouble. Also, they didn't allow us to change our electrical outlets without the super!

I know that most of the Coops in Queens include utilities and everything in the maintenance. The ones in Manhattan generally do not. BUT in Manhattan we get a little discount on Time Warner Cable

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Posted by jessica08bride

FH and I bought a co-op and its just an investment we will use to eventually buy a house. Renting an apartment won't give you anything back in return...so if you can afford to, try to buy instead of rent. The maintenance and mortgage is like paying the mortgage on a house. And the maintenance is tax deductible.

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While in generaly, it is usually better to buy than to rent, it's important to think about the current real estate market and how you plan to be in the apartment before selling. Taking all of the costs into consideration, right now real estate is not a good short-term investment. If you plan to stay longer-term (more than 5 years), then yes, definitely buy. If you are planning to get out in under 5 years, there's no gaurantee you'll see any return on your investment looking at the whole picture (taxes, closing costs, etc.)

Certainly a coop or condo (I prefer condos for many reasons, but they tend to be more expensive) will be a better bet for the short term than a house - but it's still good to weigh all your options carefully when deciding whether to buy.

In many major metropolitan areas, including NY, renting and owning can both be as beneficial as the other, depending on your goals... do some research and talk to a financial advisor about your goals. If you plan to stay in the area a while (and in that coop a while), buying may be a good idea.

FH and I put an offer in on a house that fell through after the inspection... after that, we spoke to our financial advisor and realized that a home purchase (this was a house, not a coop) was probably not the best idea for us right now. We can certainly afford it easily, but with our plans to move out of NY in 5 years, there was no guarantee we'd see any return on our investment (and we can actually do much better continuing to save more and invest our money as we are doing). Of course, once we move and know we'll be somewhere long term, of course we'll buy.

We may still consider buying a condo or coop if the market straightens out, but we'll probably wait until we move somewhere we plan to stay long term before we throw $1,000 a month at taxes. (Again, taxes on a condo or coop are much lower)

If, on the other hand, you're talking about just renting an apartment in a coop building, it's much the same as renting any other apartment -- except you'll need to be approved by the coop board (a somewhat invasive and lengthy process, but should not be a big deal).

You should talk to a good financial advisor about your long and short term goals. (And honestly, don't ask real estate agents b/c to them it's always a good time to buy And I have nothing against real estate agents) Do what's best for you and your FH -- just remember that while buying is usually best, it isn't always.