Is a NYC co-op a good investment?

Is buying a coop a good investment? Buying a coop can be a good investment under certain circumstances as New York City’s real estate has been on an upward trend in recent years. That means that if you plan to buy a coop and live in it for an extended period, it will likely appreciate and prove to be a good investment.

How much is a co-op in NYC?

Overall when purchasing a co-op in NYC, buyers should expect to pay about one to two percent of the purchase price, or two to three if the apartment costs more than $1 million. As for condos, expect two to four percent as a safe range, the lower end for properties under a million dollars with small mortgages.

Do you own a coop in NYC?

In a NYC co-op, the building itself is considered a corporation. Every apartment “owner” is actually a shareholder in the corporation. The number of shares owned differs depending on the apartment. Typically, the bigger the apartment, the more shares it represents.

What does it mean to buy a co-op in NYC?

Co-ops, also known as cooperatives, are owned by a corporation and are not considered real property. When buying a co-op apartment in NYC you are actually buying shares in the corporation that are allocated to that apartment and this entitles you to a proprietary lease.

Why I should not buy a coop?

Disadvantages of co-op memberships Buyers are subject to intense financial scrutiny when applying to buy into a co-op, making it more difficult to both buy and sell co-op shares, since a seller may invest time and resources to find a buyer, only to have the buyer rejected by the co-op board.

Is buying a co-op a good investment?

Many say cooperatives are not as good an investment as condominiums, and indeed some cooperative associations have changed to condominium over the years. In the wake of the housing market meltdown, many condos are financially unsound and are just not good investments.

What is the benefit of owning a co-op?

Advantages of co-op living One of the main attractions of co-ops are lower expenses, as they operate on an at-cost basis, meaning they are not run for profit. Many co-ops, especially smaller ones are run and maintained by resident shareholders, further lowering expenses.

Is buying a coop a good investment?

What are 3 disadvantages to living in a co-op?

Co-op owners must pay not only for their shares, but a recurring maintenance fee. These can add up quickly, particularly if the unit is expensive. Overall this can still be less expensive than renting or home ownership, but some people consider it excessive. Cooperatives can also come with restrictions for residents.

Are coops a good investment?

Why you should never buy a co-op?

Buying a co-op may place limits on how much home equity you can accumulate or if you can accumulate equity at all. While market-rate co-ops accumulate equity much like single-family homes, limited- and zero-equity co-ops restrict your ability to profit if and when you sell your shares.