Is This Your Situation: Should I Invest in a Condo or a Co-Op?

Is This Your Situation: Should I Invest in a Condo or a Co-Op?


It’s imperative that you do your research before deciding whether to buy a condo or a co-op. Many people are unaware of their differences, but we’re here to change that. Keep reading to get the lowdown on condos versus co-ops.

The Co-op Lowdown

What you own: Contrary to what you might think when you buy into a co-op, you’re not buying the apartment itself—you’re buying a share of the building. A corporation usually owns the entire building or land and gives individual leases to every member of the co-op. 

Changes to the unit: Changes that you are allowed to make to the unit are limited. They have to get approved by the board first. 

The board: This is hugely important and is made up of residents of the building. The board controls monthly maintenance fees and even gets to decide who can buy stock in the building. This means that if you’re looking to buy into a co-op, the board must approve you first, and if you’re looking to sell your shares in a co-op, the board has to approve your buyer. 

The financials: Co-ops tend to be a little less expensive to purchase than condos. However, the monthly maintenance fees are higher, and it’s harder to sublease the apartment. Boards may also have restrictions on buyer financing.  

Fees: The monthly maintenance fees are higher than those of most condos. However, some portions of these maintenance fees are tax deductible. 

The Condo Lowdown

What you own: When you purchase a condo, you own that specific unit as well as a stake in any of the common areas like pools, gyms, etc. 

Changes to the unit: Owners of condos are free to make whatever changes they deem necessary to their unit. They can change the floors, paint and make home improvements. In some cases, there may be restrictions, but they are far less strict than those of co-ops.

The board: Condos are run by a homeowners association (HOA). They maintain the property and make decisions regarding the monthly maintenance fees. By contrast, in a co-op, you have voting power in what changes are made regarding the building; in a condo, this is less common. 

The financials: Condos typically cost more than co-ops. However, there is more leniency when it comes to buyer financing. You can also take tax deductions on your mortgage interest and property taxes.

Fees: Condos usually have lower maintenance fees than co-ops. The fees cover things like snow removal and maintenance inside and outside of the building. These fees are billed monthly or quarterly. 

Of course, these are just the basics. Keep in mind that laws and regulations change frequently. Give me a call and we’ll discuss your particular situation.

Powered by HomeActions for Laura Schein Rossinow, Broker Associate, Keller Williams Realty, Newton, MA