You’ve dreamed of getting a place of your own for a long time, and now you’re finally ready to buy. When you’ve put so much effort into saving up to buy a home, you want to be sure that it’s just perfect. You’ve debated getting a condo and flip-flopped over whether to apply to a co-op. But which is right for you?

We’re here to help. At the end of the day, the differences are easy to understand. Co-ops and condos are different enough that at the end of this article, you will have a better idea of which is the right fit for you. Ready to get started? Read on to find out more.

There are endless types of homes available in the United States. From apartments to lofts, multi-family homes to single-family houses, and condos to co-ops, you have to admit that there is no shortage of choices when it comes to choosing a home.

You may be surprised to know that one out of twenty American residences is a condo or a co-op. Millions of people are happy to call a condo or co-op home. These buildings are often found in busy cities with lots of people and a thriving economy. But are they the same? Well, there are similarities… but the condo and the co-op are decidedly different in what they have to offer their residents.

If you are considering living in a co-op or condo, that’s great! The only decision left to tackle is which one is right for you. Co-op stands for cooperative housing, a type of building that has multiple living units. They are most often owned by a corporation and individuals own shares that allow them to have a Proprietary Lease on their apartment. These buildings also may have balconies or terraces or may not and other features and amenities that vary co-op to co-op.

How many people live in a co-op varies and depends on the size of the building and any restrictions or rules therein. You are more of an investor than an owner, however, so keep this in mind. You will never technically own your place– however, these buildings are typically very nice, well-maintained, and have a nice community atmosphere. You will also get a tax deduction for maintenance fees related to the building’s mortgage and property taxes as well as a mortgage interest deduction. However, co-op residents rely on everyone in the building paying their fee on time to keep the co-op from falling into default, which can create friction.

Condos are different in that they can be owned and get a deed. Condos have a lot in common with co-ops as they require monthly maintenance payments to cover upkeep, trash removal, and general maintenance of the building. The property taxes are usually part of this fee as well. These fees may or may not go up depending on the structure of your lease. You pay property taxes directly and will likely have lower maintenance fees than a co-op. You will also have liability for common areas and will need to have insurance or ensure your association has insurance that covers you– the requirements vary state to state.

More Differences Between a Condo and Co-Op

  • You can finance more of a condo than a co-op in most cases (in terms of percentage).
  • Many condos have pool and gym access, while not every co-op will have this.
  • You may find that co-ops are stricter while condos may seem more relaxed.
  • Co-ops can be more high-end and more expensive, depending on location and demand.
  • Co-ops may require a higher cash percentage for purchase, but will have lower closing costs than a condo.
  • Co-ops are more difficult to get into. Boards may turn down anyone for any reason they like, and they frequently require quite a bit of documentation as part of the application. More than one interview is likely (and also a good sign that you will be accepted).
  • Condos can only refuse members by purchasing the condo at the same price (right of first refusal).
  • Co-ops likely will not let you sublet, although exceptions are sometimes made for valid reasons. Condo owners are more likely to be able to sublet.

Regardless of their differences, condos and co-ops are both great home choices. Your choice ultimately comes down to your preferences. Do you like the exclusivity and quiet of a co-op, or do you prefer the atmosphere that a condo would provide? Meditate on your preferences and requirements and you might just find that you prefer one over the other. Thanks for reading, and good luck finding the co-op or condo of your dreams!