I am considering buying an investment unit in a co-op. Now, I know there are some concerns with renting the unit, however this co-op does not have any restrictions in renting. I am looking into what the application fees are and what are the requirements for the renters, and thats pending.
What else should you look out for when looking at an investment in a co-op building?
Would you ever consider buying in a co-op?
@Rik Shaw I've owned investment co-ops and while I did make money on them they are a pain. I'm not a big fan of boards of co-ops or condos. I can pretty much guarantee you basically are going to wind up with the stupidest people in the building who were picked last in high school for everything and on a power trip who will be on these co-op or condo boards. The smart competent people usually don't have time or desire to be on boards.
On my investment co-ops I ran into issues such as the building changing the rules and deciding that you could only rent 5/10 years or that you had to live there for 3 years before you could sublet (whereas when I bought it had been unlimited), making investors in the building pay a larger share of maintenance than owner occupants, charging sublet fees or some buildings that have started out investor friendly suddenly changed and you can't rent at all.
Currently one condo that my friend owns the board decided the windows aren't good enough and doing a 25K assessment per apartment...knowing that a chunk of people are going to loose their homes but they don't care. These boards can basically change whatever rules they feel like or come up with assessments for whatever they feel like. My friend who is a real estate agent found a buyer for a co-op that was well qualified and the board turned him down cause he was under 50 years old and they felt he was going to be too loud and partying. So you can get into all these kinds of idiotic issues.
If all else is the same I would highly recommend buying a single family home or apartment building/multifamily that you own 100% and can control everything. If the deal for an investment co-op is smoking hot it still might be worth the aggravation but you are basically going to be at the mercy of the board and if you don't like what they are doing you won't be able to change or do anything about it. And from my experience the residents in these apartment buildings generally don't like investors and are jealous and hostile towards us.