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You’ll need to make considerations when buying into a co-op, no matter where you choose to live, so let’s start there. Co-op apartments are a housing type owned and operated by a housing cooperative. These apartments differ from other housing types, such as individual condos. The residents own shares of the cooperative and elect a board of directors to manage the property.
Now that the basics are out of the way, let’s go into detail about special considerations you should have when buying into a co-op in Manhattan, Brooklyn, and Queens, starting with the top five high-level considerations for buying into a co-op in New York City:
Considerations for Buying into a Co-op in New York CityConsiderations for Buying into a Co-op in New York City
- Location: The location of your co-op is essential for several reasons. You want to ensure that it is in a neighborhood that you feel comfortable with and is convenient for your lifestyle, as these vary widely between Manhattan, Brooklyn, and Queens.
- Price: Co-ops in Manhattan, Brooklyn, and Queens can range in price depending on the size of the unit, the amenities, and the location (both the borough and the specific neighborhood). It would help if you found a co-op that fits your budget.
- Maintenance Fees: Maintenance fees can vary significantly from one co-op to another, so find a co-op with reasonable maintenance fees that fit your budget.
- Board Approval: Most co-ops require board approval to purchase a unit, which we will discuss below. Find a co-op owned by a board you feel comfortable with so that you are confident you will be able to obtain board approval.
- Financial stability of the co-op: It is essential to find a financially stable co-op. You want to ensure that the co-op you are considering can pay its bills and has a good reputation.
Co-op’s in Manhattan, Brooklyn, and QueensCo-op’s in Manhattan, Brooklyn, and Queens
There are several considerations when looking for a co-op in New York City, but let’s start with one of the most important: the location. Some co-ops are located in prime real estate locations, such as near Central Park or on the Upper East Side. These locations are far more expensive, but they offer a higher quality of life, so their boards can be difficult to obtain approval from. They may require information not only about your current financial situation, like your current job and salary but a higher down payment, more robust post-closing liquidity, or require the purchase be made in cash. This can apply to many co-op boards in New York City but can be particularly difficult in the more affluent parts of Manhattan.
Co-op Purchase ApplicationCo-op Purchase Application
Many co-op boards require what’s known as a “board package purchase application.” These tell the co-op board all they need to know about you and whether or not you’re a good fit for their building. They can be notoriously difficult to complete and require meticulous attention to detail. We provide an article to help you prepare your package purchase application in New York City.
Apartment SizeApartment Size
Another consideration is the size and square footage of the co-op. Some co-ops are very small, with only a few units, while others are much larger. The size of the co-op typically determines the monthly maintenance fee. Many cooperatives charge a higher monthly assessment than a condo.
Financial StabilityFinancial Stability
It is also essential to consider the financial stability of the co-op. Some co-ops are run by professional management companies, while others are self-managed by shareholders. The costs of maintaining a cooperative can vary significantly. You should find out how much the monthly assessment will be and how the co-op uses those funds to maintain its financial stability.
Comparable Sales ResearchComparable Sales Research
The city of New York’s Department of Finance has a helpful resource when researching the size of co-ops across the city with more than ten units. Within this site, you can download spreadsheets with comparable sales for each co-op across New York City.
Searching for a Co-opSearching for a Co-op
The best way to find a cooperative is to ask friends or family members who have lived in one. You can also search online or contact a buyer’s agent, or start with a list of co-ops in the part of New York City you’d like to live, such as this directory of co-ops in downtown Manhattan. Once you have found a cooperative that meets your criteria, contact the management company, which will provide you with the house rules that outline the requirements for buying and living in the cooperative. You should review the house rules carefully to understand all the terms and conditions.
It is indeed a lengthy process to research co-ops in New York City. Still, since you are entering into a financial relationship and will be a shareholder in the building you live in, it’s well worth the effort.