When buying a CO-OP apartment, you need to take into an account:
- The down payment required by the building is most cases 20%-50% of the purchase price.
- Each co-op offers a tax-advantage as a portion of the monthly maintenance that is tax deductible.
- An interview with the board of directors is taking place for each potential buyer. Most co-op boards typically request financial disclosure with supporting documentation, employment history, current salary, personal and business references, tax returns and credit history and have the right to reject any candidate while looking to select the best qualified tenants in order to protect the interests of the shareholders.
- Most co-op's aren’t very flexible in their subleasing policy and if subleasing is allowed, it will still require a board approval.
- Although co-ops have their disadvantages, it’s important to keep in mind that they are usually less expensive than condominiums and that currently 85% of the apartments available in NYC are co-ops, although this number starts to change as more condominiums are being built.
- The down payment required in most condominium apartmenst is much more flexible than in a cooperative, where the buyer can finance up to 90% of the purchase price.
- There is greater flexibility in subleasing your apartment, which makes a condominium choice for an investment property.
- Lower monthly charges than in a co-op.
- They are the ideal choice for non-U.S citizens and buyers who would like to revile less financial information than is required in case of a co-op purchase.
Since condominiums allow much more flexibility in their financing, future sublet options and have lower monthly charges, they are priced more than co-ops.