Owning a cooperative can be a very big decision. Co-ops are different than a condo and are not always available in all areas but are frequently a choice for many in big cities. They are commonly exclusive and often located in business districts or metropolitan areas. So what are co-ops or cooperatives exactly?

Co-ops are real estate developments that consist of multiple units and are densely put together. Condos can be purchased, but those who live in co-ops do not technically have the deed to their apartment or living space. They have a share of the development which means that everyone in the community is invested in the property together. Because of the nature of a co-op, it can be an involved application and interview process to get accepted to one.

When it comes to owning a co-op, you’ve got to know what you’re getting into. Here are the pros and cons of entering into a share of a co-op.


  • More affordable than something of similar size like a condo.
  • Financially stable; rarely foreclosed on.
  • Great as a primary home you plan to live in.
  • Higher owner occupancy.
  • Good amount of space for your money.
  • Other tenants are invested in preserving and taking care of the space.
  • Often respectful neighbors as opposed to transitory renters, and occupants are rigorously screened by a board.
  • Very family friendly and not very noisy.
  • Monthly dues are high, however, they go towards maintenance, upkeep, and paying off the loan used to purchase the property.
  • Same as condos in terms of monthly meetings.
  • Buying a co-op with the help of a mortgage loan can result in lower property taxes.


  • Usually require 10-20 % down payment.
  • The application process is very rigorous and you must also have a pretty good credit history.
  • Tough to transfer shares in co-op to someone else or sell it– not a good idea if you plan on selling or moving ever or want the option to do so hassle free.
  • Very high monthly dues as opposed to other places that do not have monthly dues.
  • Many rules for renting.
  • Difficult to get into.
  • Restricted loan options.
  • Not a good investment property, better for living.
  • Long approval and interview process.

When it comes to buying a co-op, you must evaluate whether it is right for you. If you are someone who does not like difficult processes that take a long time or you like to have the option to move or go where you like, a co-op may not be the right fit for you. For someone who is looking to settle down and have a nice life in the co-op and that city, it could be your next home. Figure out what your budget is, what your needs are, and any sources of conflict or reasons why you shouldn’t be choosing a co-op. If you think a co-op is right for you, you can begin looking into options and seeing what the application process is like.