Buying a home in NYC is like nowhere else in the country. Whereas in the rest of the US, home choices are mostly limited to individual houses or condos, in NYC most people opt for a condo or a co-op. Despite the prevalence of these two types of homes, you might be wondering what the difference even is between the two and which one makes more sense for you as a home buyer. Here's what you need to know.
#1 Condos and co-ops may look the same, but the way they operate is completely different. Condos and co-ops offer similar living spaces, but the basis for what specifically you own when you purchase a condo or co-op, what rules you must follow, and even how and if you can buy a unit in the building are worlds apart when it comes to the two property types.
#2 Buying a condo is like buying a car, whereas a co-op is more akin to leasing one. When you buy a condo, you fully own the unit you've purchased as well as a portion of the common spaces. In contrast, in a co-op, you do not own your unit. Rather, you, along with the other tenants of the building, are shareholders with shares in the building and your rights are more similar to those of a tenant in a rental building.
#3 Based purely on supply, it's easier to find a co-op in NYC. Around 80% of properties for sale in NYC are co-ops, though this is slowly changing. This is likely because most buildings built before the 1980s are co-ops, whereas newer constructions tend to be condos.
#4 Even though it's easier to find a co-op, it can be way harder to get into one. Whereas a condo board can't outright bar you from buying a unit in the building, co-op boards have the final say on who can purchase a unit in the building and often have strict guidelines for who they will and won't accept.
#5 Both condos and co-ops have boards, but how much control they have over residents and their living spaces differs drastically. In addition to having ultimate say over tenants accepted into the building, co-op boards have the authority to create rules governing everything from whether or not pets are allowed to what activities can take place in common spaces and can evict a tenant if they so choose. Though there can be similar rules within condo buildings, condo boards are much less hands-on and since the condo owner owns his or her unit, condo boards are not able to evict an owner whom they feel to be disruptive.
#6 Due to greater supply, less amenities in general, and lower monthly fees, co-ops tend to be considered less expensive on the whole. Monthly fees in co-ops are often less pricy than their condo counterparts due to the fact that most co-ops are within older buildings with less high-end amenities that can be found in newer buildings. That being said, at first glance, these monthly fees may seem cheaper in a condo, but it's important to note that property taxes are included in the monthly fees charged to co-op owners.