Condo or Coop?
I’d love to get opinions on whether people would lean towards a well-managed pre-war coop (24 units total) or a new development condo (8 units). Assume factors like layout, neighborhood, unit price & monthly costs are all relatively equal. I know we’ll have to negotiate transfer taxes on the condo; any other advice? The idea…
I’d love to get opinions on whether people would lean towards a well-managed pre-war coop (24 units total) or a new development condo (8 units). Assume factors like layout, neighborhood, unit price & monthly costs are all relatively equal.
I know we’ll have to negotiate transfer taxes on the condo; any other advice?
The idea of owning the property vs. shares is more appealing, but new construction is certainly a bit scary…they don’t build ’em like they used to.
Thanks Brownstoners!
Not as clear cut as you might think. A prewar co-op is going to have unforeseen infrastructure issues that at best can be inconvenient (spotty hot water) to financially devastating (having to replace a ruptured boiler mid-winter). And the finances can be a little byzantine, even for a “well managed” co-op.
When you say monthly costs are relatively equal, are you taking into account the tax abatement on the new condo?
coop flip tax (at the time of sale) could be 2% to 5% of gross sale price so that does reduce or equalize the higher upfront closing cost associated with condos.
if cost and pre-war vs new construction are not areas of concern, owning the unit is indeed better than owning shares.
Totally agree wih rob. Had a co-op and hated it. The board was full of ego maniacs. Ended up losing me $50k by not approving my prospecive buyer (right before the market turned) b/c they didn’t like his attitude. (IMO they were perhaps being racist; they were an all white, male board. The buyers were Indian, good financials, and were not warm and chatty). I should have sued, but the buyers were the ones who pulled out right before being formally rejected bc they thought the board was so shitty, giving them such a hard time about minor things… Can’t blame them; he board WAS shitty. Go condo, dude. For sure.
and one could argue that co-ops are for people who cant afford to buy condos!! it’s like the housing projects version of home ownership.
*rob*
quote:
condos tend to attract buyers who couldn’t make it through a co-op’s board approval process
:-/
*rob*
Posted by: Butterfly at March 16, 2010 10:48 AM
:-\ indeed
quote:
condos tend to attract buyers who couldn’t make it through a co-op’s board approval process
:-/
*rob*
halkaps is right about higher closing costs on a condo. In addition to the transfer taxes (on new construction), you pay mortgage recording tax and higher title insurance. So, you could easily be looking at an additional $10-15K, which you can’t finance. Condos are typically more attractive because there’s no board approval and you have more control and independence over things like subletting. The flip side is that condos tend to attract buyers who couldn’t make it through a co-op’s board approval process (for all kinds of reasons). I haven’t seen any studies on this, but I would be willing to bet that foreclosures and short sales are more common in condos.
it’s pretty simple. do you like people all up in your business? then go co-op. do you like to do whatever the heck you want? then go condo.
*rob*