The Differences Between Coops & Condos
What You Need to Know About Condos
Condominiums are buildings or complexes that house a multitude of families with shared grounds, services, and amenities. Condos are individually assessed real estate properties that will be taxed separately from the other units by the city. While condo owners don’t have to worry about the building’s mortgage, the condo association that manages the building will determine the budget for the building and its grounds, charging each unit for a monthly “common charge.” Although a condo’s monthly cost might be lower than a similar coop might be lower, the initial purchase price will be significantly higher.
What You Need to Know About Coops
What is known as a “coop,” or a cooperative, is a corporation that owns a building. If you own a “coop,” you own stock in the corporation, and thereby have propriety rights to a specific unit in the building. How many shares in the stock you own will determine the size of your unit, the floor of your unit, and certain amenities or view. Any monthly maintenance fees are based on the percentage of shares you own to the total number of shares in the building.
When you own a coop, your monthly maintenance payment covers your share of three types of expenses:
- Covers your share of any basic operating costs or upkeep, such as heat, water, electricity, etc. This also covers your share of any building maintenance staff, the superintendent, management, and other building employees. Liability and other insurance for the building is also covered here.
- You pay your share of real estate taxes on the entire building.
- The last expense is either your share of the building’s mortgage, or a refinance or equity loan.
Although the list of expenses may sound like a lot of things that you’ll need to cover, the purchase price of shares in a coop will generally be lower than the price of an equal condo unit.