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The Difference Between Co-Op and a Condo Property Investments

Updated: Sep 11, 2018

Many people around the world are defying the paradigms stress at work to acquire the best of everything in life. All of these people are aiming to acquire valuable properties because investing in property act is an exciting and independently financially secure way to make money and secure their future wealth. Thus, as the real estate market is often known as a substantial opportunity with investment plans, several investors, especially first-time home buyers cannot differentiate between cooperative (co-op) and a condo property investment. Thus, without a clear understanding of what you are looking for can lead to purchasing the wrong home. Hence, to help you decide which property is right for you and how buying one or the other will affect you financially, below are the difference between the coop and a condo property investment.

Ownership: Condominiums. Also referred to as condos are owned by a person or a family. When you buy a condo, you own your living space, and you’ll be responsible for fees associated with utilities, maintenance, and upkeep of the property. As a person who owns a single-family home owns that structure. The same is not true for co-ops. When one buys a house in a co-op, you are not buying a piece of property. Instead, you are purchasing a share in a company which itself owns the property. Homeowners here are investors in a product in which they live. Because of this, co-op boards tend to be highly selective about who they allow to buy in. With condos, a neighbor who is unable to pay their debt is unfortunate, but not necessarily the worst case scenario.



Residents: Anybody who wants to live in a condo can do so - so long as they can get a mortgage to buy their unit and agree to abide by the rules of the condo homeowners association. So long as prospective buyers can do both, the other residents in a condo unit have no say in who lives there. That's not the case in co-ops. The people who live there determine who can buy shares and live in the unit. They may only allow people of certain financial means to live there, or of specific age ranges.


Tax Deductions: Condos are usually individually owned, so owners are taxed separately just as they would be in a single-family home while Co-ops are considered a single property, with a single property tax assessment that is split among the owners and usually included in the maintenance fee. Property taxes are typically lower on co-ops than on condos as they are being shared between the owners.




Cost: Condos is usually more expensive to buy than a co-op, but you have more control over your investment because you can easily sell or lease out your condo property while the initial cost of buying co-op is usually cheaper than a condo but a higher cost up keeping. It is generally harder to sub-lease or sell your share of in a co-op property, so it’s best to plan on living there. Also, maintenance fees in a condo are usually on a monthly or quarterly basis, and it covers costs like lawn mowing, snow removal, and specific routine maintenance. While maintenance fees in co-op are often higher in a co-op than in condo and sometimes include items like utilities. However, co-ops are less likely than condos to charge special assessments for things like capital improvement projects.

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