Before you go out to find a co-op you need to know what your needs are and what you should look for in a co-op building. It is good for you to take a note pad and a camera so you can keep accurate records during your search. Remember, that a co-op is not an apartment, but an investment that you have to handle and select with care.
It is important that you select a neighborhood and a cooperative that fits your lifestyle and needs so you can enjoy living there until you're ready to move, if ever. Also, if you choose to sell your co-op unit it is vital that you select a cooperative and area where people will want to purchase. Here are a few things you should consider before beginning your search:
Area: The area you select should be desirable. You should make sure it is a nice looking neighborhood with well kept properties, preferably more residential than commercial, and low crime rate. If you have kids or have plans to make sure there are schools nearby, transportation and convenience shops.
Exterior of the Building: Before walking inside the building check to see the condition of the outside. See if the building is level, large cracks in the exterior walls or ground area, if it's clean from debris and garbage, is the garden well maintained if any, flooding problems (go back on a rainy day), updated windows, fire escapes and handicap accessible if necessary. The outside of the cooperative is just as important as the inside.
Co-op Owners: If you happen to see co-op owners coming in or out of the building or on the elevator, ask them how they feel about living in the building.
Security: If you plan to live in a large co-op building see if there's security cameras in the lobby, elevators, laundry room and in the hallways. Also, if there's a doorman, find out the work schedule. You can also ask the doorman questions about the building, they will usually give you plenty of information. You may want to try visiting the building and getting in to see what procedures the doorman will take. Also, see if the doors are strong and remain locked and the bell system is working.
Lobby Area: Your lobby should be pleasing to the eye. Take a look at the flooring, the bell system, paint job, walls and decoration. Also, see if you notice people hanging around the lobby, making noise etc.
Elevators: Make sure the elevators have been updated, clean and have a security camera.
Hallways: The hallways and doors should be freshly painted, nicely done flooring with tile or clean carpet. Plus the hallways should be bright and well lit.
Parking: If parking is important to you find out how much it costs per month and if there's a waiting list.
Laundry Area: It is common for co-op buildings to have laundry rooms in the building. If one is not in the building, then you should find out if there's one within walking distance.
Recreation Area: Most co-op buildings have a common area that is used for gatherings, parties, etc. that is usually free to co-op owners.
Storage Area: Many co-op buildings have additional storage available for rent in the building.
Other Bonus Amenities: Tennis, pool, gym, professional business services
Now that you know some basics of what to look for in a co-op building, now you need to know what to be aware of during the home buying process. I found a great source that will help you ease your fears and to make great decisions from beginning to end. Click here to check out this great ebook called, "Home Buying Defense Guide".
Print this list and carry it with you so you can make notes about each property you view. Also feel free to share this link with your friends and family on your Twitter and Facebook pages.
*Did this article help you to know what to look for in a co-op building? If you're looking for a co-op in Brooklyn, New York where I practice real estate contact me by email.
Showing posts with label coop. Show all posts
Showing posts with label coop. Show all posts
Friday, August 6, 2010
Reasons Why You Should Buy A Co-op
Are you wondering if you should buy a co-op or not? If you have been searching online you will discover that there are many co-ops for sale depending where you live. I am going to share with you some reasons why buying a co-op is a good idea, especially in today's market. Study these reasons and decide whether a co-op is right for you.Click here to see affordable co-ops in Brooklyn.
Less Responsibility:
With a home you are responsible maintaining the entire home and the land that surrounds it, with a co-op there's is a staff to clean, maintain and repair the common areas, the exterior, etc. So with co-op living there are no roof repairs, shoveling snow, gardening, exterior work on the home, and maelectrical and plumbing work for you.
Simpler Monthly payment:Your monthly payments are much more simpler than owning a home or condo. Why? With a co-op you pay your mortgage payment to the bank, your maintenance (usually includes one or more utilities, property taxes and fees to maintain the property), insurance, and depending where you live you may pay one or more of your utilities.
Affordability:
Co-ops are the least expensive real estate investment, especially today. If you earn between $40,000 to $70,000 close or over a 700 credit score with at leastt 10% of the down payment, then you could buy a co-op. The purchase price of the co-op depends on where you plan to live and how many bedrooms you need. With interest rates at their lowest right now, buying a co-op can get your foot in the door to investing.
Gain Equity:
That's right, the best word besides ownership is the word "equity". Just like a conds or home, your co-op gains equity as well. Of course, equity gained on a property is based on how much you paid and currently owe, the location and the condition of the home.
Community:When you own a co-op, it's not just some apartment building with alot of renters that usually don't care much about the property. A cooperative is filled with owners that care about the property and want to have it maintained in order to continue to increase the value of the cooperative building and their individual unit. Owners of co-ops also look out for one another and they all have a since of pride which makes it a great place to live. Co-ops are great for a single person, seniors, and small families or even people who are hardly home or travel often.
Amenities:
Many cooperatives come with extra perks that you will do not get in the average rental apartment building. Depending on the cooperative building sometimes you can have access to a gym, parking, laundry rooms on site, doorman, additional storage for rent, pool, recreation center, business center, etc.
Tax Benefits:
Your co-op is a real estate investment so that means you get perks at tax time. A portion of your maintenance and the interest on your mortgage payments are tax deductible (seek an accountant to go over all your benefits).
Pride Of Ownership:
Nothing is more rewarding than owning a piece of the American Dream called real estate. When you put your key in your door, it belongs to you and not someone else. The best part is, you are gaining equity and building your financial portfolio and not just filling up your landlords pockets. You can go in and decorate how you want and feel comfortable in your space. Ownership is a the best feeling in the world and a sense of true accomplishment.
Less Responsibility:
With a home you are responsible maintaining the entire home and the land that surrounds it, with a co-op there's is a staff to clean, maintain and repair the common areas, the exterior, etc. So with co-op living there are no roof repairs, shoveling snow, gardening, exterior work on the home, and maelectrical and plumbing work for you.
Simpler Monthly payment:Your monthly payments are much more simpler than owning a home or condo. Why? With a co-op you pay your mortgage payment to the bank, your maintenance (usually includes one or more utilities, property taxes and fees to maintain the property), insurance, and depending where you live you may pay one or more of your utilities.
Affordability:
Co-ops are the least expensive real estate investment, especially today. If you earn between $40,000 to $70,000 close or over a 700 credit score with at leastt 10% of the down payment, then you could buy a co-op. The purchase price of the co-op depends on where you plan to live and how many bedrooms you need. With interest rates at their lowest right now, buying a co-op can get your foot in the door to investing.
Gain Equity:
That's right, the best word besides ownership is the word "equity". Just like a conds or home, your co-op gains equity as well. Of course, equity gained on a property is based on how much you paid and currently owe, the location and the condition of the home.
Community:When you own a co-op, it's not just some apartment building with alot of renters that usually don't care much about the property. A cooperative is filled with owners that care about the property and want to have it maintained in order to continue to increase the value of the cooperative building and their individual unit. Owners of co-ops also look out for one another and they all have a since of pride which makes it a great place to live. Co-ops are great for a single person, seniors, and small families or even people who are hardly home or travel often.
Amenities:
Many cooperatives come with extra perks that you will do not get in the average rental apartment building. Depending on the cooperative building sometimes you can have access to a gym, parking, laundry rooms on site, doorman, additional storage for rent, pool, recreation center, business center, etc.
Tax Benefits:
Your co-op is a real estate investment so that means you get perks at tax time. A portion of your maintenance and the interest on your mortgage payments are tax deductible (seek an accountant to go over all your benefits).
Pride Of Ownership:
Nothing is more rewarding than owning a piece of the American Dream called real estate. When you put your key in your door, it belongs to you and not someone else. The best part is, you are gaining equity and building your financial portfolio and not just filling up your landlords pockets. You can go in and decorate how you want and feel comfortable in your space. Ownership is a the best feeling in the world and a sense of true accomplishment.
Do I Qualify To Buy A Co-op or A Condo
Since I sell so many co-ops and condos I am always faced with the statement, "I'm not sure if I should buy a co--op or a condo." The fact is, these two types of properties are very different when you go down the list of qualifications to purchase.
Most people don't have a choice between the two because of the requirements for each. Below I will share with you some of the information I share with my buyers.
BASIC QUALIFICATIONS FOR PURCHASING A CO-OP
- PRICE
The price of a co-op is usually much less than a condo
Below is an example of someone wanting to buy a two bedroom unit, but doesn't know if they meet the requirements to buy a co-op or a condo:
-For Co-ops: and your mortgage will automatically be lower than if you purchased a condo in the same area. So if your're mortgage broker pre-approves you for a two bedroom co-op ranging from $200,000 to $225,000 then you cannot go out and get a two bedroom condo that would most likely be $299,000 to $350,000, unless you plan to put down a HUGE down payment so your loan amount is less.
_______________________________________________________
*DOWN PAYMENT
-For Co-ops: Most co-op buildings require between 10-20% down depending where you live.
-For condos: Lenders usually require a 20% down payment, but some condo complexes are FHA approved and you may only have to put down 3.5% (simply ask your lender if the conod complex you're interested in is on the F.H.A approval list).
________________________________________________________
- Credit Score - Lenders are usually pretty strict when it comes to co-ops, so you need to have good credit.
- Income - If the buyer needs a two bedroom, to purchase a co-op the buyer will need to earn at least $80,0000. All the income must be verified with stubs and tax information.
As a buyer looking into purchasing a co-op or a condo you should look at the two scenarios above very carefully. Looking at the requirements for each, it's pretty easy to know up front which one a you qualify for.
**Did this article help you? Share this article with everyone you know on Twitter and Facebook.
Most people don't have a choice between the two because of the requirements for each. Below I will share with you some of the information I share with my buyers.
BASIC QUALIFICATIONS FOR PURCHASING A CO-OP
- PRICE
The price of a co-op is usually much less than a condo
Below is an example of someone wanting to buy a two bedroom unit, but doesn't know if they meet the requirements to buy a co-op or a condo:
-For Co-ops: and your mortgage will automatically be lower than if you purchased a condo in the same area. So if your're mortgage broker pre-approves you for a two bedroom co-op ranging from $200,000 to $225,000 then you cannot go out and get a two bedroom condo that would most likely be $299,000 to $350,000, unless you plan to put down a HUGE down payment so your loan amount is less.
_______________________________________________________
*DOWN PAYMENT
-For Co-ops: Most co-op buildings require between 10-20% down depending where you live.
-For condos: Lenders usually require a 20% down payment, but some condo complexes are FHA approved and you may only have to put down 3.5% (simply ask your lender if the conod complex you're interested in is on the F.H.A approval list).
________________________________________________________
- Credit Score - Lenders are usually pretty strict when it comes to co-ops, so you need to have good credit.
- Income - If the buyer needs a two bedroom, to purchase a co-op the buyer will need to earn at least $80,0000. All the income must be verified with stubs and tax information.
As a buyer looking into purchasing a co-op or a condo you should look at the two scenarios above very carefully. Looking at the requirements for each, it's pretty easy to know up front which one a you qualify for.
**Did this article help you? Share this article with everyone you know on Twitter and Facebook.
Are Co-ops Good Investments
Okay let's get down to the nitty gritty of co-ops and whether they make good investments or not. If you're not aware, I specialize in co-op (click here to see my sales in a down market) sales in Brooklyn and I do all my deals from start to finish. This gives me the insight on what co-ops are all about and why buyers should consider them.
So let's not waste anymore time and get started with why co-ops may be a good investment for you:
Affordability
Co-ops are very affordable depending on location and the lowest interest rates in the last 40 years. This is the biggest opportunity in decades for those that earn $40,000 to 70,000. That means, in most states like New York, you may not earn enough to be in the higher end neighborhoods, but you can definitely look into buying into a cooperative building. Co-ops are great to use as stepping stones to get you in the real estate game so you can get equity in 3-4 years to move to that more expensive condo or home.
For Example, the below available large 2 bedroom co-op in Brooklyn, New York in the Old Mill Basin area is only $189,000, if you earn at least $60,000 with very little debt. DON'T CALL ME, THIS ONE IS SOLD! CLICK HERE FOR MORE OF MY CO-OPS IN BROOKLYN!
Click Here To See More Hot Co-op Deals In Brooklyn, NY
Easy LivingIf you're the type of person that works alot, you don't care to do home projects and don't have the finances to fix a roof, flood in the basement, fix the electrical and heating system then you may want to buy a co-op, it's easy living.
You can invest in real estate without all the time and money it takes to care for a home. With a co-op there is a management team in place that has staff to maintain the exterior of the property, heating, water, snow and garbage removal, painting and cleaning common areas and taking care of the amenities and certain issues in the actual unit.
So instead of buying a home and going to bed praying every night that nothing else will need fixing when you wake up, you can get a co-op and take it easy financially and emotionally.
Now Let's Talk Maintenance FeesThis is the biggest objection I get when it comes to maintenance is that it's too high or higher than condos. But buyers fail to realize all the things that maintenance includes, so your going to get alot of bang for your buck. Let's go through why co-op maintenance is higher than condo common charges.
- Maintenance fees usually include utilities such as gas, water, heat and some buildings include electricity (but your maintenance may increase in the summer due to air conditioners being used). When you buy a co-op you can use unlimited amounts of heat, gas and water. Unlike a condo you most likely will have to pay these items separately.
- Mainteance includes your property taxes which is much lower than taxes for a condo or home.
- Maintenance for the co-op is also tax deductible, sometimes up to 55%, at least in Brooklyn where I do real estaet.
- Maintenance increases every few years, not every year like an apartment. I know maintenance increases are scary but they only go up by 5% to 10%. Within the next increase you may have a better job or an increase in pay at your current job. Cooperatives need to charge the market rate for maintenance to keep a reserve in place for updates, repairs, to pay staff, etc.
So if you are considering a building that has much lower maintenance than most in the area you should look at the building carefullyto see if it's being maintained well because that means the reserve fund is being used in the right way. When you pay less you usually get less and if the maintenance is low now watch out for a huge incease when all the work has to be done.
- Safefy and Care
If you are a single person, single parent or senior then you may want to live in a cooperative with a high percentage of shareholders in a great location where people take pride and care in their surroundings. Also having perks like a doorman, security system, handicap accessible, a management staff available to resolve problems, laundry and storage on-site and amenities (gym, sitting areas, etc.) doesn't hurt either.
- Gain EquityCo-ops are a form of real estate just like a condo or home, the only thing is you will receive a stock certificate stating how many shares you own instead of getting a deed. But with a co-op you can sell anytime on your own or through a real estate company and you earn your equity.
For Example:
If you bought a two bedroom co-op in 2002 for $150,000 in Old Mill Basin, Brooklyn and today you need more space and you need to sell. Your unit has been updated and is in move in condition. Today in 2010, you owe say $130,000 on that two bedroom. In today's markey that co-op should appraise for approximately $195,000.
Here's the formula:(In today's market you have a buyer willing to pay $195,000)
minus ($110,000 your mortgage balance owed to the bank + other miscellaneous closing costs) = $65,000 or so in profits in the buyers pocket, give or take some co-op fees, lawyer fees and if any real estate fees.
*Click Here To See Affordable Co-ops In Great Areas In Brooklyn
The fact is, you will run into people that will give you every excuse why you shouldn't buy a co-op, but there is so much misinformation being passed along. You have to seek a professional that sells co-ops regularly and can knows the ins-and outs of the process and how they work. Think about it, there are so much more co-op buildings that have been in existence for years over condo buildings. That tells you that they are in demand for many of the reasons of above and it's a great way for those that are unable to afford a home and condo to invest in real estate.
**Do you think co-ops are good investments?
So let's not waste anymore time and get started with why co-ops may be a good investment for you:
Affordability
Co-ops are very affordable depending on location and the lowest interest rates in the last 40 years. This is the biggest opportunity in decades for those that earn $40,000 to 70,000. That means, in most states like New York, you may not earn enough to be in the higher end neighborhoods, but you can definitely look into buying into a cooperative building. Co-ops are great to use as stepping stones to get you in the real estate game so you can get equity in 3-4 years to move to that more expensive condo or home.
For Example, the below available large 2 bedroom co-op in Brooklyn, New York in the Old Mill Basin area is only $189,000, if you earn at least $60,000 with very little debt. DON'T CALL ME, THIS ONE IS SOLD! CLICK HERE FOR MORE OF MY CO-OPS IN BROOKLYN!
Click Here To See More Hot Co-op Deals In Brooklyn, NY
Easy LivingIf you're the type of person that works alot, you don't care to do home projects and don't have the finances to fix a roof, flood in the basement, fix the electrical and heating system then you may want to buy a co-op, it's easy living.
You can invest in real estate without all the time and money it takes to care for a home. With a co-op there is a management team in place that has staff to maintain the exterior of the property, heating, water, snow and garbage removal, painting and cleaning common areas and taking care of the amenities and certain issues in the actual unit.
So instead of buying a home and going to bed praying every night that nothing else will need fixing when you wake up, you can get a co-op and take it easy financially and emotionally.
Now Let's Talk Maintenance FeesThis is the biggest objection I get when it comes to maintenance is that it's too high or higher than condos. But buyers fail to realize all the things that maintenance includes, so your going to get alot of bang for your buck. Let's go through why co-op maintenance is higher than condo common charges.
- Maintenance fees usually include utilities such as gas, water, heat and some buildings include electricity (but your maintenance may increase in the summer due to air conditioners being used). When you buy a co-op you can use unlimited amounts of heat, gas and water. Unlike a condo you most likely will have to pay these items separately.
- Mainteance includes your property taxes which is much lower than taxes for a condo or home.
- Maintenance for the co-op is also tax deductible, sometimes up to 55%, at least in Brooklyn where I do real estaet.
- Maintenance increases every few years, not every year like an apartment. I know maintenance increases are scary but they only go up by 5% to 10%. Within the next increase you may have a better job or an increase in pay at your current job. Cooperatives need to charge the market rate for maintenance to keep a reserve in place for updates, repairs, to pay staff, etc.
So if you are considering a building that has much lower maintenance than most in the area you should look at the building carefullyto see if it's being maintained well because that means the reserve fund is being used in the right way. When you pay less you usually get less and if the maintenance is low now watch out for a huge incease when all the work has to be done.
- Safefy and Care
If you are a single person, single parent or senior then you may want to live in a cooperative with a high percentage of shareholders in a great location where people take pride and care in their surroundings. Also having perks like a doorman, security system, handicap accessible, a management staff available to resolve problems, laundry and storage on-site and amenities (gym, sitting areas, etc.) doesn't hurt either.
- Gain EquityCo-ops are a form of real estate just like a condo or home, the only thing is you will receive a stock certificate stating how many shares you own instead of getting a deed. But with a co-op you can sell anytime on your own or through a real estate company and you earn your equity.
For Example:
If you bought a two bedroom co-op in 2002 for $150,000 in Old Mill Basin, Brooklyn and today you need more space and you need to sell. Your unit has been updated and is in move in condition. Today in 2010, you owe say $130,000 on that two bedroom. In today's markey that co-op should appraise for approximately $195,000.
Here's the formula:(In today's market you have a buyer willing to pay $195,000)
minus ($110,000 your mortgage balance owed to the bank + other miscellaneous closing costs) = $65,000 or so in profits in the buyers pocket, give or take some co-op fees, lawyer fees and if any real estate fees.
*Click Here To See Affordable Co-ops In Great Areas In Brooklyn
The fact is, you will run into people that will give you every excuse why you shouldn't buy a co-op, but there is so much misinformation being passed along. You have to seek a professional that sells co-ops regularly and can knows the ins-and outs of the process and how they work. Think about it, there are so much more co-op buildings that have been in existence for years over condo buildings. That tells you that they are in demand for many of the reasons of above and it's a great way for those that are unable to afford a home and condo to invest in real estate.
**Do you think co-ops are good investments?
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