Condos, Co-ops, and Condops: The variation in New York City's Real Estate

Oct 31 | 5 minutes read
Condos, Co-ops, and Condops: The variation in New York City's Real Estate

One of the most important things to consider while looking for a NYC apartment is what type of apartment is best for you. To do so, you must first understand the distinctions between three key NYC property types: condos, co-ops, and condops.


What are co-ops?

Co-ops outnumber condos in NYC, accounting for roughly 75% of the apartment market. Instead of owning the property itself, you hold shares in the corporation that owns the property in the co-op.

The number of shares you own is proportional to the size of your apartment, thus if you own a larger apartment in the co-op, you own more shares than someone who lives in a smaller apartment in the building. Apartment size is also strongly related to the co-op maintenance expenses you pay, which include your share of:

1) the building taxes

2) General operating expenses for the facility

3) heat and hot water (this is usually included in co-ops, though there are exceptions).

Co-ops are also distinct from other types of NYC real estate because of their (usually tougher) rules. Most co-op associations need a prospective purchaser to be approved by the co-board. The board can reject applications for any reason they wish, including financial reasons, employment history, lifestyle, a poor board interview, or presumed purpose for the apartment (i.e. it would be used as a pied-à-terre or something other than your primary abode).


Advantages of Co-Ops

In general, the most appealing aspect of a co-op over any other type of housing is the price. Co-ops are typically less expensive than condos since they provide greater power as a shareholder, have fewer closing fees, and are just more plentiful.

According to a 2006 study conducted by the Furman Center for Real Estate and Urban Policy, condos are valued around 9% more than co-ops. Another advantage of co-ops is their stability. The lifestyle is considered more stable because the co-op application and approval process is rigorous, and co-ops are often built for long-term inhabitants.


Disadvantages of Co-Ops

Searching for and establishing a co-op can be difficult at times due to the strict standards and demanding approval procedure. A buyer can be denied at any time for any reason. Foreign buyers have a more difficult time purchasing a co-op since they frequently lack the requisite U.S. documentation trail (with banks, U.S. credit, and whatnot). Co-ops normally require a greater down payment than condos, typically around 20% of the buying price (with some as high as 50%!).

Every co-op has its own set of regulations, but the majority of them limit or ban how your apartment can be used: many limit or prohibit subletting and the use of units as pieds-à-terre. If you intend to sell, the additional layer of permission might hold down the process: if a possible buyer is rejected by the board, you're back to square one. When you close as a seller, co-ops typically levy a flip tax, which is a technique of raising funds for a co-ops' overhead expenses.


Post-closing liquidity for New York City co-ops

Although co-ops are typically less expensive than condos, they nevertheless require a certain level of liquid assets in reserve. Post-closing liquidity refers to these cash reserves.

Each co-op will have various requirements for assets that purchasers can use to qualify, but in general, one to two years of reserves to cover monthly mortgage and maintenance payments will be required.


What exactly are condos?

Condominiums, sometimes known as condos, vary from co-ops in that you will own real estate. Instead of owning shares in a building, as in a co-op, each individual unit receives its own tax bill from the city. Condos also have monthly fees to pay building operating costs and management fees. However, because there is no underlying mortgage for a condominium structure, they are frequently significantly cheaper than those of co-ops.


Advantages of Condos

Purchasing a condo is a simple process. Condos are a popular alternative for flexibility, particularly among foreign investors, because you may rent your unit and, in some situations, finance up to 90% of the purchase price. When you buy a condo, you buy the property rather than shares in a corporation. This allows you more control over your unit and frees you from the restrictive rules that can sometimes burden co-op owners.

Condos can be purchased as an investment property, and owners are usually free to sublease their apartments. Condos are frequently easier to sell since they have fewer limitations.


Disadvantages of Condos

Condos are far more difficult to find because co-ops account for roughly 75% of the market. The flexibility of condo living is coveted, which drives up the price of condos.

Now that we've covered co-ops and condos, let's look at a third sort of NYC property: the condop, which is a cross between a co-op and a condo.


What are Condops?

An example of a condop is a co-op that exists within a condo complex. Commercial and retail applications are common for the ground floor condo. Ordinary condo regulations apply here. The co-op apartments are owned in common by the tenants and are located above the store. All condop owners must comply with both co-op and condo regulations, as the residential units above are governed by co-op regulations and the commercial units are governed by condo regulations. Condops make up only about 5% of the New York City real estate market.


Condop: Advantages and Disadvantages

Condops combine aspects of both co-ops and condos, both good and negative.



  • Versatility in subletting (Condo)
  • Reduced Final Expenses of Closing (Co-op)
  • Building Financing for Selected Properties (Condo)
  • Price (in between Co-op and Condo)



  • Have a stake in the company (Co-op)
  • Board Approval Procedures (Co-op)


How can you know which kind of property would suit you best?

It's not simple to locate the ideal dwelling. When looking for a place to live in New York City, there are many options to weigh, such as whether to buy or rent, whether to get a studio or a one-bedroom, whether to get a co-op or a condo or a condop, and so on. Do you want to rent out your apartment or use it as your primary residence? Is your application ready for the co-op board's stamp of approval?

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