Advice: co-op vs home

Hi everyone,
I'm a little stressed out so if anyone can offer me any advice/suggestions I would so appreciate it. My boyfriend and I are starting the process of looking for a home, and when we get engaged we'd actually buy it. We had first thought we would get a home in the $350 range, but my boyfriend just switched jobs and the pay decreased so we're really stressed about money. We're trying to decide whether it's a better investment to buy a house but we'll literally be living pay check to pay check, or go in on a co-op where we have a better quality of life but perhaps the investment isn't as wise. I've heard such mixed things about co-ops, and so I'm uneasy. I have friends who SWEAR by them, and others who say it's a bad investment. All "professional" usually say not to get a co-op, so I'm just not sure. Anyone have advice either way? Thanks so so much :)

Re: Advice: co-op vs home

IMO, I would not buy a co-op because they tend to be harder to sell because you have to get approval from the board & depending on the co-op can be very strict--I know someone that has had 3 buyers and the board has rejected all three. In this market though everything is harder to sell. That being said I am all for owning something--with a co-op you only own shares of the corporation and not the actual property.

I would say it isn't worth it to live pay check to pay check--you want to be able to have money for a rainy day. Have you thought about looking at condos because then you actually own the real property and sometimes they tend to be cheaper then a house but a little more expensive then a co-op.
Good luck!

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I have owned a co-op, condo and we now have a house.

I loved my co-op. I had no problems with anything and it didn't cost a lot of money. I was able to afford it on my salary alone and I was a 2nd year teacher. I had no problem with board approval and even was allowed to have a large dog. When I went to sell it I had no problem and actually made money because it was the height of the market.

When my Dh and I got engaged we bought a condo. I hated it. We sold it a year after we bought it and again made money because the market was still great. We did have a lot of trouble selling because there were so many units in my complex for sale. Finally we got an offer and jumped on it.

We now own a house and love it. If we had to live pay check to pay check however it would be really tough. A house costs more money then I could even imagine for things that I didn't even know about ie: cleaning the gutters, fall clean-up, clogged A/C ducts....to name a few. You always should have money in the bank for those irratations that pop up. If there is one thing I miss about the co-op and condo it is calling matainence when something goes wrong!

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I would go for a condo/co-op and then upgrade to a house in a few years. There are ups and downs to both of them. OR I would continue to rent as long as it was low and you are still able to save more money towards a down payment.

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we had a co op and although you're living with others in the same building, we would not be in our house now if it was not for the co op. it was a HUGE stepping stone for us. if you plan to live there for a few years it is so worth it opposed to paying rent and with anything, its an investment so you will make money off of it. with this market right now, it might be hard to sell but the market will go up again in a few years i'm sure..it always does. don't stretch yourself when you don't have to..at least that's my opinion from my own experience!! good luck with what you decide!!!

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I would rather hold off on buying and rent. The market isn't like it was and when you factor in closing costs/real estate commission you might be better off just saving for another year or so if you don't plan on staying in whatever you buy for a while..

It depends though how much you are going to put down and what your mortgage pymt vs rent would be but I bet renting would be the best bet

Re: Advice: co-op vs home

thanks so much everyone, keep em coming. This is so helpful :)

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Message edited 12/27/2007 9:47:30 AM.

Re: Advice: co-op vs home

This is a very personal decision but you have to remember that there are so many extra costs associated with buying a home. If you live paycheck to paycheck, what if an emergency comes up? There's also taxes (which increase every year), homeowners insurance and then repairs to the home. These things all need to be factored in addition to the mortgage payment.

DH and I decided to hold off on buying until we had enough money saved and felt that we could buy a decent home in the area we wanted and feel okay financially. But our rent is super cheap and does not increase year to year so that allows us to save.

You will hear different stories about co-ops. For people who bought when the market was low and sold high, it was a great investment. However, I know people who bought in the last year or 2 and need to sell and will probably break even.

Good luck! And if you choose to buy, check out all the options for first time home buyers.

Re: Advice: co-op vs home

We bought a co-op when we first got married for $63,500. We had to redo the kitchen and the bathroom. We sold it 4 years later for $165,000. This was a HUGE help when we went to buy our house. We knew that we didn't want to rent in the beginning but we also knew that we couldn't afford a house. When we lived in the co-op, our mortgage was about 300 dollars a month and the monthly co-op fees were $700. We were able to live there, save some money (since we were both working in the beginning) and be comfortable.
We sold our co-op in a month and had no problems with the board accepting the buyer.

Good luck.

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I think you should do whatever it takes to move to Smithtown

Re: Advice: co-op vs home

DH and I decided to buy a coop to keep our payments small, so we can sock away $ for retirement while we are young. It has been great for us, our payments are low and we have a lot of $ left every month. we will probably sell with in one or two years and buy a home. HTH!!

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Message edited 1/6/2008 9:19:01 PM.

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I would rent for a year and save for a house. Of course, this is my opinion and my situation may be very different than yours.

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When we got married I insisted we buy SOMETHING because I absolutely hated where we lived. We couldn't afford a house in the neighborhood we wanted to live in so we bought a co-op instead. We bought in 2004 and we knew the market was going to change sooner or later, so we bought a place that we could stay in for 10 years if we had to. It was the right decision for us. We bought it low because it was not in the best condition and we've renovated about 75% of the apartment. I'm confident that with the work we've done, if we had to sell today we would still make a profit in spite of the market. We don't plan to sell any time soon though.

We live in Brooklyn which makes a difference - there are very, very few condos available here (at least where I want to live). For the most part, it's only co-ops or houses.

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If you can't afford a home, I would invest in a co-op instead.

You will be investing your money and will have a tax write-off.

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I bought a co-op in forest hills and DH and I lived in it after we got married. It was great. We decided to buy a house this year and put the co-op up for sale. We got alot of offers but went into contract with a buyer who got denied by the board for lying on their application. We would have made $45K on it in 2 years. But because we were in contract for so long and had already closed on our house, we decided to rent it. We break even with the rent. I would say it's been annoying, but not because it's a co-op, just because the buyers were bad. I think it's a great investment! But location is a big factor, if co-op's are in high demand, i.e. NYC, Queens and Brooklyn, than you can make alot of money. Just don't buy into a place with strict board approvals and rules.