Co-Op vs. Condo: What You Need to Know

The New York City housing market is truly a beast of its own. We are living in a world where you can't simply buy a house, white picket fence, and start planting the seeds of your American Dream. Instead, our homes are divided into a series of different housing types. For those of you looking to buy, or simply for those of you looking to understand more about the housing industry in the city, here is a breakdown of the most popular forms of home ownership in New York City:


Roughly 75 percent of the Manhattan housing inventory is comprised of co-ops. Unlike a condo, co-ops are are owned by a corporation. This means, when you buy an apartment that is in a co-op building, you are not actually buying real property (like you would in a condo). You are in fact, buying shares of the corporation. These shares entitle you to a proprietary lease, which relates your relationship to the building close to that of an investor, rather than a condo building, where you are the outright owner of your specific unit. Usually, the larger the apartment, the more shares you will have in the corporation you have bought into.

Now that you know what it is you are buying, we can now look into how a co-op differs from a condo. First off, the approval process for co-op buildings is significantly more intensive than in condominium buildings. Co-op shareholders, unlike condo residents also pay a monthly maintenance fee to cover building expenses and upkeep like heat, hot water, insurance, staff salaries, real estate taxes and the mortgage debt of the building. Assessments on the building can also be incurred on the building and will (sometimes) drastically affect the value of the property you are considering.

The infamous co-op board sets their own standards in terms of the approval process as well as how the building is managed. Seeing that everyone owns shares in the building, the community as a whole is more concerned with who the building does or does not allow into the building. Co-op boards also require an interview (or interviews) to meet you and ask any questions regarding the information you provided. They can approve or deny any applicant as they choose. The co-op buying (and selling) process is tricky one, where a real estate broker will certainly come in handy.


Condominium apartments differ from co-ops seeing that you will be owning real property. Think of purchasing a condo like purchasing a house in the suburbs, the purchaser is given an actual deed to the property purchased. Seeing that you own real property rather than shares in a building, each individual apartment will receive a separate tax bill from the city (rather than having your taxes be complied into monthly maintenance as seen in co-ops). Condo owners are required to pay monthly common charges similar to the maintenance charges in a co-op, however these charges tend to be lower than in co-ops because there is no underlying mortgage for a condominium building.

The straightforward nature of buying a condo plus the fact that in some cases you can finance up to 90 percent of the purchase price and sublet your apartment at will makes this form of ownership a top choice for flexibility, especially among investors, foreign buyers and parents purchasing for their children. That being said, there are significantly fewer condos to come by. The majority of the New York City real estate market takes the form of a cooperative, while most new construction tends to be condo. Many talk in high regards toward condos, however the community that is formed within a cooperative building is significantly closer. Condo owners tend to keep to themselves, seeing that they own their property, while co-op owners see their role as part of the whole, rather than as an individual. Either way both forms of ownership provide different costs and benefits to consumers. If you are looking for an apartment, I would recommend looking at both forms of property. Consult with your broker, move quickly (in this market you have to), and eventually find a house you can make your home.