Empty nesters are often thinking of their next move and the question comes up – condo vs. co-op? I thought I would provide some of the basics.

When you purchase a condo, you are purchasing real property that is recorded with a deed much like a house. Owners of a condo get their own real estate tax bill as well as a monthly charge to cover their share of the cost of running the condo association. Co-ops are owned by a corporation, and when you purchase a co-op, you are buying shares of that corporation. Co-ops are run by a Board of Directors, and have a monthly maintenance fee to cover building expenses such as heat, hot water, building staff, insurance, elevator maintenance, and the debt service on the property.

The approval process to purchase a co-op is much more thorough and time-consuming than with a condo. Co-op boards often do not allow subletting at all and, if they do, the rules are very restrictive, as co-op boards want most of the building to be owner-occupied. It is much easier to purchase a condominium, and the rules are generally more relaxed. Lastly, Co-op ownership provides shareholders tax deductions that are similar to the deductions that homeowners, including condo owners, are permitted. They can deduct the interest on their mortgage and the portion of their monthly maintenance that pays for the real estate taxes and debt service on the property.

In southern Westchester County, co-ops are much more common than condos. Condos tend to be properties that were built as condos as opposed to being converted from a rental to a condo and are generally younger than co-op buildings. Co-ops are a highly cost efficient way to live since there is a collection of owners sharing the cost of operating the property.