Buying coop shares
Dear Real Estate Adviser, I am looking to buy a co-op condo in Florida, but I am still not sure if this is the way to go. What do you think? While co-ops and condos can be identical in look, size and function, their financial structures are totally different.
Unlike condos, which are individually owned by buyers, a co-op is owned by a small corporation. Typically, the larger the co-op unit, the more shares you own. Unlike a condo buy, in which a condo board may lightly weigh in on your desirability as a resident, a co-op board typically will thoroughly vet you with an extensive personal interview, background and employment-history checks and a detailed examination of your personal finances.
Typically, co-op neighbors are more community-minded and neighborly, say their owners, while condo owners tend to be more individualistic and investment-minded. Subleasing is usually not allowed at co-ops.
Co-ops are also a bit cheaper per square foot than condos but offer fewer tax deductions. But there could be one big sticking point: Unlike New York City, where about three-quarters of for-sale multifamily units are co-ops, only about 10 percent of Florida units are.
If you can get preapproved for the necessary financing, ideally from a lender who understands co-op financing ask co-op management for the most accommodating ones , and gain acceptance from that picky co-op board, it may suit your lifestyle objectives better.
First, you may want to consult with your accountant or financial planner for advice on whether such a co-op best fits your fiscal profile. Read more Real Estate Adviser columns and more stories about real estate.
The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy.
Owning A Co-Op: Pros And Cons
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