PROS AND CONS OF NEW YORK CITY CO-OPS
Cooperative apartments, or co-ops, are a popular type of housing in New York City. Co-op residents own a share in the building rather than owning the physical apartment unit. There are several pros and cons to consider before investing in a co-op.
Pros
Affordability: Co-ops are generally more affordable than traditional condos or apartments in New York City, making them a cost-effective option for many buyers.
Community: Co-ops foster a strong sense of community as residents are required to work together to maintain the building in which they own a share.
Higher Standards: Co-ops often have more stringent application processes which can lead to a higher quality of residents and more desirable neighbors.
Financial Stability: Due to the collective ownership structure, co-op residents may have greater financial stability as operating costs are shared among all shareholders, enabling investment in reliable maintenance and sufficient reserves to cover future expenses.
Control and Influence: Co-op shareholders enjoy more control over the operations of the building, including decision-making around building upgrades, design changes, and security
Cons
Higher Initial Cost: Co-ops may have higher upfront costs due to application fees and down payments.
Restrictions: Co-ops may have restrictive regulations and rules on pet ownership, renovations, subletting, and length of stays preventing all ownership privileges from the start.
Liability: Co-op shareholders can be held liable for damages and legal issues related to the building, even if they have no direct involvement in the incident.
Higher Board Approval Requirements: Co-op boards can be strict in their screening process to ensure all resident ownership investments are suitable candidates, making the application and review process more rigorous.
Lack of Flexibility: Selling a co-op share can be more complicated and takes longer than the sale of a condominium unit because of the approval process and usually a smaller pool of potential buyers.
Considering all these factors is critical when deciding whether to invest in a co-op in New York City. While there are some drawbacks to co-op living, for the right individual or family, the pros of owning a co-op apartment may outweigh the cons.