When you purchase a condominium, you own the actual unit itself. You also have rights to use common areas, such as the exercise room, the party room, and so forth. Fees are charged against occupants for maintenance, insurance and management of these common areas.
When you buy into a co-op, you do not own the actual real estate or the apartment. Instead, you own shares or a membership in the cooperative housing corporation. The corporation owns the underlying real estate. Typically, taxes, mortgage payments and maintenance expenses are shared by the tenants as monthly maintenance charges.
Co-op apartments often come with approval requirements—which vary greatly from building to building.
Co-op board requirements differ greatly from building to building. Typically, after closing, co-op boards require two years worth of mortgage and maintenance reserves in your bank account, derived typically from your income and savings, and after your other expenses.
The answer differs from building to building. Some co-op boards have a strict prohibition against subletting your co-op apartment. Others may allow for it, subject to certain conditions, which vary.
Fewer lenders are willing to finance the purchase of a co-op over a condo. Before you begin your search, make sure you are pre-approved.
On average, it takes 45-60 days to close a condo, and 60-90 days to close a co-op.
In Manhattan, the standard fee is 15% of the yearly rent. However, there are several significant offsets. A good broker can negotiate on your behalf to save you money on rent or building fees. A good broker might also be able to get owner to offer a cash or “free rent” incentive.
You will need to show proof of income equivalent to 40x the rent. For example, an apartment that rents for $1,500 a month will require $1,500 x 40, or $60,000, worth of yearly income. You’ll also need good credit, a reference letter from your current landlord, a letter of employment, and two months’ worth of bank statements.
Management companies typically view your application as “high risk.” So you’re better off looking at apartments owned and managed by individuals—who may accept extra amounts for security purposes.
Most owners and management companies will allow a NY or tri-state area guarantor help you qualify for an apartment. The guarantor must demonstrate income of 80x the rent —in the event that you default.
Renting an apartment typically takes anywhere from 1-30 days.
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