Welcome to Episode 4 in my Series REAL ESTATE INVESTING IN NEW YORK!!
Topics covered in this Episode:
☆ Everything you need to know about Condos and Co-ops
☆ Similarities and differences
☆ Approval processes
☆ Are you a Condo person or a Co-op person?
NOTES FOR THIS EPISODE:
CONDO AND CO-OP SIMILARITIES:
☁ NYC's most common property types
☁ Managed buildings
☁ Both have Executive boards
☁ Both vary in terms of their policies
☁ Both have extensive due diligence process to purchase
☁ Both have monthly maintenance fees
☁ Both appreciate over time
☁ Both require an application and approval for purchase
CONDO-SPECIFIC CHARACTERISTICS:
☁ Considered Real Property
☁ You receive a deed when you close
☁ Many of the newer buildings in the city and luxury New Developments are condos
☁ Priced at a Premium, about 30% more expensive than co-ops
☁ Management reserves the Right of First Refusal before apartment is sold
☁ Minimum 10% down payment (usually)
☁ Easier review/approval process
☁ If you have the finances to make the purchase, you are typically easily approved
☁ Monthly fee is called Common Charges
☁ Property Taxes are paid separately directly to the city, not to the Condo
☁ Higher Closing Costs: Title Fees and Mortgage Recording Tax
☁ Tend to have more flexible building policies
☁ Subletting is usually allowed and more flexible
☁ Tend to have more transient residents (renters)
☁ Ideal property type for investors and non-US purchasers
COOP-SPECIFIC CHARACTERISTICS:
☁ Shares of a Corporation
☁ You receive a Proprietary Lease when you close
☁ Many of the older buildings with character are co-ops
☁ More affordable - about 30% less expensive than condos
☁ No Right of First Refusal, but very diligent and thorough review/ approval process
☁ Minimum 20% down payment (usually)
☁ Financial review during application looks into income and employment history, assets, bank accounts
☁ Financial requirements to purchase include DTI Ratio and Post-Closing Liquidity
☁ Board application is tedious
☁ Board interview is required for purchase
☁ Co-op Boards typically have more power over purchases and sales in the building and building culture than Condo Boards
☁ Monthly fee is called Maintenance, and it includes Property Taxes. The % of the Maintenance fee that is your property tax can typically be written off when filing taxes
☁ Typically has a Flip Tax
☁ Lower Closing Costs
☁ Community focused, often with stricter policies
☁ Subletting is usually not allowed or regulated/limited with associated fees
☁ Ideal property type for Primary Residence
☁ Can be difficult for non-US Citizens to purchase
Don’t miss the next video which will explain the property purchase process!
If you ever have Real Estate related questions, feel free to Email me any time: Christina.Kremidas@elliman.com
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