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Octoberlove
LIF Infant
Member since 1/06 160 total posts
Name:
Stephanie
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What is better to buy?
My DH and I would like to buy something. We are not financially ready for a house so we were thinking either a coop or a condo. Which is better? Also what are the differences between the two?
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Posted 2/5/06 12:19 PM  |
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Prudential Douglas Elliman Real Estate
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Palebride
I am an amazing bakist
Member since 5/05 13673 total posts
Name:
Lori
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Re: What is better to buy?
condos are generally more money and you're buying the actual apartment. the maintenance is lower, but you have to pay taxes as well.
co-ops are generally less money, but instead of buying the apartment, you're buying shares in the co-op association. you have to go before an interview committee to be approved, but so does everyone else, so only people who are financially able will be living in the other co-ops (ideally). the maintenance is higher, but the taxes are included in that payment, so it's about even.
i believe both you can do what you want to the inside, but the outside is the management's responsibilty and choice.
they're both about even...it all depends on your preference.
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| Posted 2/5/06 12:35 PM |
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Redhead
You Live, You Learn
Member since 5/05 31871 total posts
Name:
Jennifer
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Re: What is better to buy?
Condo is the better buy
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| Posted 2/5/06 3:27 PM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: What is better to buy?
Posted by Redhead
Condo is the better buy
Not necessarially.
Co-ops are still relatively cheap and have more room for growth and price increases.
The issue I have with condos are... they are expensive and to buy a house its usually just a couple bucks more.
Both a co-op and condo can be a good buy.
But in reality... the better buy is the place you are getting thats priced accordingly in relation to recent sales figures for that complex. That can be either or.
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| Posted 2/6/06 12:05 PM |
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MrsS1126
MY FOREVER
Member since 1/06 1671 total posts
Name:
Jackie
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Re: What is better to buy?
I would say condo's are the way to go...I believe Co-ops are harder to sell.
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| Posted 2/8/06 11:56 AM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: What is better to buy?
Posted by MrsS1126
I would say condo's are the way to go...I believe Co-ops are harder to sell.
Under what premise? Don't you think the cheaper property would generate more buyers?
I have sold two separate co-ops in the last two years and didn't have any problem selling either. The first one landed me three offers in the first week. The second one gave me two offers in the first week. Both sold at 40% profit in just two years of owning!
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| Posted 2/8/06 12:07 PM |
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CathyB
Member since 5/05 19403 total posts
Name:
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Re: What is better to buy?
Posted by DjPiLL
Posted by MrsS1126
I would say condo's are the way to go...I believe Co-ops are harder to sell.
Under what premise? Don't you think the cheaper property would generate more buyers?
I have sold two separate co-ops in the last two years and didn't have any problem selling either. The first one landed me three offers in the first week. The second one gave me two offers in the first week. Both sold at 40% profit in just two years of owning!
The board at our old co-op was a real PITA. We had to get approval for any work being done in our apartment, even just hanging new cabinets in the kitchen. I know a lot of people that won't consider co-ops due to the boards.
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| Posted 2/8/06 12:15 PM |
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DRMom
Two in Blue
Member since 5/05 20223 total posts
Name:
Melissa
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Re: What is better to buy?
Also keep in mind that banks will want to see not only your financials but the co-ops. Financing can be much harder to get for co-ops than for a single family residence. This is if you are even approved by the board.
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| Posted 2/8/06 12:20 PM |
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BabyBoy
is Skylar Elizabeth
Member since 5/05 4189 total posts
Name:
Tom
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Re: What is better to buy?
Posted by melijane
Also keep in mind that banks will want to see not only your financials but the co-ops. Financing can be much harder to get for co-ops than for a single family residence. This is if you are even approved by the board.
I wouldn't say harder about banks but rather limited. Alot of banks won't fund co-ops, but alot do, (we have ours with citibank )
The board depending on the area is not horrible. i've heard stories but every story is different. our board was a piece of cake to get though (they already made up there minds before we got there) the meeting is more about your $$ situation, job, etc... just to meet in person to make sure everything that you read can seem true.
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| Posted 2/8/06 12:29 PM |
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november12003
Love my boys...
Member since 5/05 2412 total posts
Name:
Jenn
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Re: What is better to buy?
I just sold my co-op in December and made a 100% profit...it worked in my case 
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| Posted 2/8/06 12:41 PM |
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schnapy
LIF Adolescent
Member since 9/05 766 total posts
Name:
Diana
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Re: What is better to buy?
I dont think buying a coop is a bad idea. Plenty of my friends did and they loved it
Is there really such a bad thing in buying real estate?
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| Posted 2/8/06 12:54 PM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: What is better to buy?
Posted by melijane
Also keep in mind that banks will want to see not only your financials but the co-ops. Financing can be much harder to get for co-ops than for a single family residence. This is if you are even approved by the board.
Yes but on the flipside... the co-ops that have the PITA boards are usually the same co-ops that are in financially superior shape.
Co-op mortgages are VERY common. Just about every major bank does them now. Even most smaller banks will give you a co-op loan.
Yeah they have to see the co-ops financials. The co-op knows this and they give them out all the time. Seeing the co-ops financials is in your best interest! The bank won't give you a loan to a financially shady co-op.
Yes you need to get board approval to put up stuff like cabinets and etc. There is a process... and it can be a pain. But that is the flipside you have to deal with when you can buy a 2br co-op for 200k when a 2br condo is close to double the price! 
My biggest issue with condos is... since they are not as financially strong as co-ops (they don't take in as much revenue as a co-op)... you get slammed with assessments a lot more. You will most likely have to pay for stuff like street repairs out of your own pocket... when a co-op board usually maintains a nice cash reserve for items like this.
The condo boards are usually not as smart as the co-op boards because frankly the condo board doesn't need to do much.
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| Posted 2/8/06 12:59 PM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: What is better to buy?
Posted by schnapy
I dont think buying a coop is a bad idea. Plenty of my friends did and they loved it
Is there really such a bad thing in buying real estate?
Buying either or is a good move. But to say one is better than the other... i dont agree. They are pretty much equal in terms of "whats better to buy" since both have their advantages and disadvantages.
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| Posted 2/8/06 1:00 PM |
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schnapy
LIF Adolescent
Member since 9/05 766 total posts
Name:
Diana
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Re: What is better to buy?
Posted by DjPiLL
Posted by schnapy
I dont think buying a coop is a bad idea. Plenty of my friends did and they loved it
Is there really such a bad thing in buying real estate?
Buying either or is a good move. But to say one is better than the other... i dont agree. They are pretty much equal in terms of "whats better to buy" since both have their advantages and disadvantages.
I agree, buy something its always better than renting..
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| Posted 2/8/06 1:08 PM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: What is better to buy?
Posted by schnapy
I agree, buy something its always better than renting..
Well that is not always true either. A lot of people think its ALWAYS good to buy. Thats is not the case.
Some people have insanely cheap rents due to rent stabilization. My buddy rents a 1bedroom apartment in Sunnyside Queens and he pays something like $700 a month. He wants to buy a house... but is still a year or two away.
He was considering buying a co-op in the meantime... but due to this market... this would be a bad move knowing he will be buying a house a few years down the road. The amount of money he will waste on maintenance, taxes, and mortgage interest defeats the purpose of buying for this short-term.
Now... if he was renting for $1400 a month... might be a different story.
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| Posted 2/8/06 1:12 PM |
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schnapy
LIF Adolescent
Member since 9/05 766 total posts
Name:
Diana
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Re: What is better to buy?
Yeah but if you are in a certain tax bracket isnt it better to buy. Thats what I was always told
I understand what you are saying. We only paid 650 a month for rent, and thats how we were able to bank every dime, we wanted to save more but we got sick of owing taxes every year
I guess its what works best for you...
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| Posted 2/8/06 2:04 PM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: What is better to buy?
Posted by schnapy
Yeah but if you are in a certain tax bracket isnt it better to buy. Thats what I was always told
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No... you should never buy because "you need deductions" or "your bracket is too high". Thats uninformed advice.
I think a lot of people greatly overestimate the tax "benefits" they get from owning compared to continuing to rent.
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| Posted 2/8/06 2:19 PM |
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schnapy
LIF Adolescent
Member since 9/05 766 total posts
Name:
Diana
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Re: What is better to buy?
Really, very intersesting. Why is that though?
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| Posted 2/8/06 2:41 PM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: What is better to buy?
Posted by schnapy
Really, very intersesting. Why is that though?
Because people think that tax deductions on a mortgage is the greatest thing since sliced bread. They think... "wow i can write off all my mortgage interest... that means i won't have to pay for any of it". Thats not true... because you only get a percent off it. You still have to pay the rest.
Here is a great way of explaining it that I read in an article on the internet. Really puts it in perspective.
Sometimes I really feel like people are incapable of thinking for themselves... Let's take a home loan for example.
It's widely known that you can write off the interest of the loan (not the principal) in your income taxes. Soon I'll be building a house, and everyone keeps telling me that I should get a loan so I can write off the interest. Okay, that's nice... but why not just pay for it outright I ask them? Their response is always, "Because then you can't write off the interest."
So if people would stop repeating what other people say and actually think about it, they might not think that way. Let's do the math here... A 30 year loan for $1,000,000 at 7% interest would be $6,653.02 per month. That means you have paid $2,395,087.20 over the course of the loan (roughly $1.4M in interest). Wow, that's fantastic, eh? Now you can write off $1.4M that you paid out that you otherwise could have simply kept. Which at a 30% tax bracket would be a savings of $420,000 because of your write off.
Hmmmm... pay $1,395,087.20 so you can get back ("save") $418,526.16. What a deal!
It is a good thing, but if you can pay cash, that's better... it's funny to see people argue that you should "keep" your money rather than pay off your loan so that you can have the tax "break".
If you are reading this, and you think it's a good idea, maybe you should shop around for the highest interest rate you can find, because then you get a bigger tax write off.
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| Posted 2/8/06 3:43 PM |
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schnapy
LIF Adolescent
Member since 9/05 766 total posts
Name:
Diana
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Re: What is better to buy?
Ok I see the point.
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| Posted 2/8/06 4:26 PM |
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DjPiLL
Member since 5/05 3664 total posts
Name:
Richard
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Re: What is better to buy?
If you need tax deductions... there are better ways to get this.
Maxing out your 401k and IRA every year is one very good way.
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| Posted 2/8/06 4:38 PM |
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schnapy
LIF Adolescent
Member since 9/05 766 total posts
Name:
Diana
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Re: What is better to buy?
Thanks we do, but well see this year. With our contributions, buying the house. Who knows
I have this feeling we will owe again
We dont claim any deductions so well see what happens this year
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| Posted 2/8/06 5:20 PM |
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Octoberlove
LIF Infant
Member since 1/06 160 total posts
Name:
Stephanie
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Re: What is better to buy?
Thanks guys for all the advice. It was a big help. I am going to look very seriously into both and try to pull out all the negatives and positives. Plus it really all depends on the cost of what we see.
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| Posted 2/8/06 7:09 PM |
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kently
LIF Zygote
Member since 5/06 7 total posts
Name:
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Re: What is better to buy?
Hello all,
I am about to buy a coo apartment, but when I read the coop questionnaire from the bank and I found out that the proprietary lease expiration is: 2087. What does this mean? Is that mean the year 2087 I will lose my coop. Thanks in advance.
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| Posted 5/31/06 7:45 PM |
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KLSbear
LIF Adult
Member since 1/06 1908 total posts
Name:
Karen
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Re: What is better to buy?
MIL and her now DH both had a terrible time selling their co-ops. His in Garden City was a nightmare - the board took forever to meet and finally turn down each candidate - took him over a year to sell it and it was a great place in a great building but there were issues with the potential buyers and the co-op board dragged out the process so much that it took a long time for each deal to be reviewed. MIL is in the midst of a similar situation - thought she had the place sold and after about 6 months of back and forth and getting paperwork etc, the board turned down the buyer. Now it's been almost two months with buyer #3 (#2 backed out after a few weeks) and she's paying maintenance on an empty co-op. The board approval issues can be OK, but they can also be such a nightmare I'd seriously think long and hard before buying into one.
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| Posted 5/31/06 10:13 PM |
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