Buying an Apartment in NYC: Condos vs. Co-Ops
While buying a home in the city may seem daunting at first, according to the latest census data, a third of NYC residents are homeowners — and you could be one of them! Here are some things to keep in mind when buying an apartment in NYC.
According to Forbes, buying an apartment in NYC commands a median sales price of $855,000. But, if you know where to look, you might be able to find something for less than $300,000. And with down payments typically ranging between 10 and 20 percent, it is doable for the average buyer to own a home in New York City. But there are many factors you need to weigh when thinking about buying an apartment in NYC. Let’s examine a few.
Condo or Co-Op?
First, you need to decide between purchasing a condo or a co-op. What’s the difference between the two?
- Co-ops tend to be found in older buildings; most new construction (post-1980) tends to be condo.
- In a co-op, the entire building is owned by a single corporation. Buyers get shares in the corporation, and a proprietary lease that outlines the rules and rights much like a lease in a rental building. In order to be approved to buy, you need to appeal to a co-op board, which also settles issues that arise in the building.
- Buying a condo, by contrast, is like buying a single-family house. You get a deed like you would if you purchased a house. Condo owners work with a condo board.
In addition to these basic differences, there are a few other factors that distinguish a condo from a co-op and may influence your purchasing decision.
Whether you go with a co-op or a condo, each comes with a set of fees. Co-op owners usually pay a maintenance fee that can increase anywhere between 3 and 10 percent annually. When there are damages to common areas of the building (if an elevator breaks, a water pipe blows, etc.), payment for repairs comes out of the co-op budget.
In a condo, owners must pay not only monthly fees, but also property taxes. The monthly fees (called “common charges”) can vary widely and really depend on the area that you choose to live in and the amount of space you purchase.
For both condos and co-ops, there is an approval process that all interested applicants must go through. For a co-op, in addition to all the financial requirements they have a board that reviews all applicants. This board has the right to approve or deny anyone trying to get into their building. With condos, this approval process tends to be more of a formality. So for some it’s much easier to get an approval with a condo.
While the process of buying a home in the city may seem daunting at first, according to the latest census data, a third of NYC residents are homeowners — and you could be one of them!
Image Source: Flickr/Peter Zoon