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New York City Real Estate 101 -- Condos vs. Co-ops

What’s the Difference Between a Condominium and a Co-op?

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Are you tired of paying rent and ready to purchase your own apartment? Learn about the differences between condominiums and co-op apartments and decide which one is right for you.

What is a Co-op?

In New York City, 85% of all apartments available for purchase (and almost 100% of pre-war apartments) are in co-operative buildings.

When you buy a co-op, you don’t actually own your apartment. Instead, you own shares of a co-op corporation that owns the building. The larger your apartment, the more shares within the corporation you own. Monthly maintenance fees cover building expenses including heat, hot water, insurance, staff salaries, and real estate taxes

Advantages of Buying a Co-op

  • Co-ops are generally less expensive than comparable condominium apartments.

  • Some of your monthly maintenance fees are tax deductible.

    Disadvantages of Buying a Co-op

  • All prospective purchasers must be approved by the Board of Directors. The Board approval process is often time-consuming and rigorous -- requiring extensive information regarding finances, employment, and personal background. Even celebrities have been turned down by some selective New York co-op boards.

  • Monthly maintenance fees for co-ops are much higher than for condos. This is because the monthly fee includes part of the underlying mortgage for the building.

  • Many co-op boards limit the amount of the purchase price that can be financed and require higher down payments than are usually required for condominiums.

  • It is harder to sub-lease a co-op. Each co-op building has its own rules, but many limit or forbid subletting.

    What is a Condominium?
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