Co-op vs. condo what’s the difference?

4 Replies

Hey, From a buy and hold investment perspective what’s the difference between buying Co-op and a condo? Is one better than the other? I only own condos at the moment but see some decent deals for Co-ops. Thanks!
Originally posted by @Mayer M. :
Hey,

From a buy and hold investment perspective what’s the difference between buying Co-op and a condo? Is one better than the other? I only own condos at the moment but see some decent deals for Co-ops.

Thanks!

Neither... 

When you buy into a co-op, you become a shareholder in a corporation that owns the property. As a shareholder, you are entitled to exclusive use of a housing unit in the property. In Condo's you actually own everything within the 4 walls of the house. You know everything that is not common area. Common area is owned by the community, and you pay a very hefty fee to maintain it.

I am not sure you can sub-lease the coop or not. I guess you will have to read the agreement you have with the corporation. With condos, yes you can rent them out as long as COA approves it. 

The best real estate investment is Single Family Houses or Small/Big Multi Families, depending on your business model, goals, and affordability. 

Thanks for the response!

I would tend to agree with you that single-family and multifamily may make the best long-term investment. However, currently I invest in Southern New Jersey and with the high property taxes so far the best deals I’ve found is to be condos/townhouses.

I currently own 22 condos/townhouses all acquired in the last two years. I used the BRRRR method on every single one getting 65-75% LTV with 10-20 year amortization. At this time I have not left a single penny in any property. I think that’s pretty decent. And they all cash flow.

I’ve been looking for multi family is in my area for a long time and have yet to find a decent deal even one that needs a ton of work. At the moment I am beginning my search for an out-of-state multi family investment. I have family in Tampa, and Columbus so I will start my search in those places.

Best,
Mayer