Co-ops and condos are both properties that provide a homeownership experience that is lower maintenance and not as expensive as owning traditional single-family property. But when comparing a condominium vs. cooperative apartment it can be hard to figure out the differences. So what’s the difference between a co-op and a condo? A co-op is a housing cooperative where the owner owns shares in a corporation as opposed to owning the specific unit. However, the co-op will be looked at them as real property for tax purposes. Co-op owners have a big say in decisions with the building. But the expenses associated with improvements must be split with other members. Condos are more like apartments that are owned by the resident. They come with shared amenities. Repairs are covered by a Homeowners Association (HOA) and HOA fees must be paid in addition to rent.
How To Live There
Now let’s take a look at the difference between a condo and a co-op when it comes to how you get to live there. To live in a condo, you must be approved by the co-op board. Co-op shareholders are financially responsible for the whole building so the approval process may take some time. As compared to condo owners, co-op applicants may also be required to put up more money upfront. Condo owners will also need to go through an approval process, but this will not be nearly as rigorous. Condo owners will only be responsible for their units as opposed to co-op owners that are responsible for the whole building. Therefore, the HOA will not spend as much time looking into your financial and personal situation before deciding you’re fit to move in.
What You Pay For
Even though co-ops require a rigorous approval process, they are not as expensive as condos. Co-op owners pay a co-op fee or maintenance fee which goes towards the building’s mortgage payments, property taxes, and maintenance costs. The more shares you have in the building the more you pay. However, you may also have to pay for additional repairs that are needed around the building. A percentage of these fees are tax-deductible. Condo owners pay for their mortgage as well as property taxes. They may also have to cover their utility bills. HOA fees cover most repairs but some repairs may not be covered by the HOA and may end up coming out of the owner’s pocket. Most condo fees are not tax-deductible.
What’s Right for Me?
If you are trying to decide which is right for you, a condo or a co-op, there are several factors to consider. If you are looking to move in fast, a co-op may not be the best choice because the application process takes so long. If you are looking to be very involved in your building’s decision-making processes, a co-op is a better choice but go for a condo if you like more of a laidback approach. In both a condo and co-op, you will have to follow rules but in a co-op, you will be more involved in the rulemaking process. You will also have to consider the cost. In most cases, a co-op will be less expensive, but this depends on the building you move into and the fees you will have to pay. Which do you think will be best for you?