Co-Op... So torn, need advice

DH & I currently rent a large 1br Apt & we like it just fine. It has a full sized washer & dryer (not stackable) I love that part.

Rent is basically money in the trash. All can agree on this.

DH & I aren't ready to buy a house however a 2br Co-Op opportunity has come our way. We don't know alot about these things however at first the deal seemed amazing. Our mortgage would be less then our rent. It is for sale by owner so he is more willing to come down on his already reasonable price. The condo is brand-new, totally re-built last year.

The kicker? "Maintenance fee/ property taxes" of $800 monthly. If we owned a house it would be more, so I guess thats not horrible.
Also... The washer/ Dryer is in a building across the street. I cannot imagine taking time to lug bags of laundry back & forth.

Our rent now is $1400 + utilities. The Co-op would bring us to just below $2000 including that $800 fee. The only utilities we are responsible for in a Co-Op is LIPA & Cablevision (same as now). We can easily afford it, but would be saving less (obviously).

Dh thinks we should rent forever until we can buy the water front $800,000 house he picked out (our dream home). If we stick out 8yrs in the Co-Op we can get that house.

Re: Co-Op... So torn, need advice

I would stick with renting... its throwing away rent $ vs throwing away taxes and maintenance fees.. same difference. If your going to buy a house down the line then you'll have to worry about selling a co-op - which has a limited buyer pool.

Re: Co-Op... So torn, need advice

We live in a co-op in smithtown and we LOVE it. The $800 maintenance, keep in mind, includes your water, heat, actual maintenance and TAXES.

Its just my opinion that its better to own and build up equity.....but it all depends.

Our laundry is in our building, but around the back, downstairs of the building and honestly....its really not that big of a deal to do laundry, at all.

Re: Co-Op... So torn, need advice

depends. Getting in and selling a co-op is tough. If it makes more sense for you to rent, then do it. If in a few years, you can buy a starter home, i'd go that route. I would never buy a co-op again. I just sold mine in October.

Re: Co-Op... So torn, need advice

The laundry is not so bad, when dh and I rented the laundry room was 2 buildings over, but we could do ALL of our laundry in one shot. The time it takes you to do one load, you can do 5, so that has its advantages. If you think the Co-op would be worth the resale then go for it. Its an investment. And in the long run its kinda like money going into savings.

Re: Co-Op... So torn, need advice

I would buy the co-op

Re: Co-Op... So torn, need advice

Co-op.

For one prices are lower now and you will likely make a profit when you sell.

Tax wise, even if the rent was equal to mortgage and maintance, you will get a lot more money back in taxes bc you own something. Usually part of the maintance is tax deductible--makes it worth it IMO

Re: Co-Op... So torn, need advice

Posted by DiamondGirl

Co-op.

For one prices are lower now and you will likely make a profit when you sell.

Tax wise, even if the rent was equal to mortgage and maintance, you will get a lot more money back in taxes bc you own something. Usually part of the maintance is tax deductible--makes it worth it IMO

Re: Co-Op... So torn, need advice

I personally am not a fan of Co-ops. I dont consider them real estate since you dont own property you own shares in a business. I would buy a condo or a house....or wait. Cause for not much more than you are going to pay for that co-op you can have a small house. Our mortgage isnt much more than that co-op

Re: Co-Op... So torn, need advice

Re: Co-Op... So torn, need advice

I would buy the co-op if you think you will be there for a good few years. I bought my co-op at the start of the boom and made a killing on the sale during the height of the market. Unfortuately co-ops are the last type of property to build equity in a bad market, but it is an investment in the long term.

Bear in mind that not only is approx. 40% of your maintenance fee property taxes, but you will also get tax relief on the interest you pay on your mortgage, while you get no breaks from the IRS for renting.

The best thing I ever did was buy my co-op and I think it's a great way to get on the housing ladder.

Re: Co-Op... So torn, need advice

Re: Co-Op... So torn, need advice

If the co-op is in a well desired area and you know you are going to be there for a little while and can wait till the market goes up a little to sell it I would go for it.

You also get a tax break for owning, so that is an advantage to renting.

It was in the height of the market but we owned a co-op for two years and doubled our $$ on it when we sold it. It was alot more that what we would have been to save in that time if we were renting.

Re: Co-Op... So torn, need advice

The two main factors to consider are how long you would live there & if itis a good co-op.

If owning a house isn't going to happen for a long time, I'd go with the co-op.
You will save less per month, but you do get tax beaks & since the market isn't great right now, hopefully by the time you are redy to sell, it will be better & you will make some $ of of it, making easier to buy a house. If you are thinking short term, you will probably save more $ by just renting & paying lower rent.

Not all co-ops are the same. You have to look into the financials of the shareholders assocation & see if there is money in the reservere, etc. Are there a lot of assesments, do maintance payments go up often for reasons other than tax increases? Is the building well maintained. How easy/difficult is their application process?
An ideal application porcess screens for people that can actually pay, but is not too restrictive that you can't sell.

I have to say though, I have been doing laundry out of my apartment for 16 years & I would love to have an in-unit washer/dryer, so I am not sure I could give that up!

Message edited 3/12/2010 10:35:44 AM.

Re: Co-Op... So torn, need advice

Re: Co-Op... So torn, need advice

Re: Co-Op... So torn, need advice

We have a co-op as well and laundry is down the hall. It's never been an issue and perhaps you would send it out - it maybe less expensive and save you time.

When the market was stronger, our building's apts. were selling quite quickly.

I agree go w/ the co-op.
Eight years is a long time to be in a one bedroom. We were in a studio and am so happy that we have 2 bedrooms.

Re: Co-Op... So torn, need advice

We are in the same exact poistion as you !!!! we have decided to buy the 2 bedroom coop bc we can get a really great price and I feel confident that we can make a good profit in 7 years.,we get the 8000 tax credit for first time home buyers and the maint. and taxes is a huge tax deductible and you will get a lot of it back. my dh was the same way until I presented all the benfits above to him.

plus we do not have thousands saved up for home maint.god forbid something were to break or one of us were to lose our job etc

Message edited 3/13/2010 8:52:27 AM.

Re: Co-Op... So torn, need advice

Another to consider....you need considerably less for a down payment on a co-op than you would on a house.

Re: Co-Op... So torn, need advice

don't like co-ops..I wouldn't buy. Rent and save your money. It's not throwing it away..it's your home, you live in it.

Save a ton of moolah and get the home you really want.

I too would hate the laundry situation. I had it and hated it and couldn't see myself doing that again.

It's not a good buy if it doesn't fit your lifestyle and long term plans.

Yes, the tax deduction is great but you have to spend the money to get the deduction. That makes no sense.

Re: Co-Op... So torn, need advice

I would stick with renting for sure. And honestly, you rent isn't money in the trash b/c the reality is what you pay in rent, you would be paying out in taxes each month on a home, kwiM?

Re: Co-Op... So torn, need advice

'Gona have to agree with dh on this one ;). I would stick with renting.

...also Ive had to go do off site laundry and HATED it, esp in the winter when I had to track through snow.

HEY I just had a sos..if he wants to stay for that waterfront, then tell him you simply must have that new furniture and you will be willing to stay.

Re: Co-Op... So torn, need advice

Re: Co-Op... So torn, need advice

My husband and I always say that buying our co-op was the best investment we ever made. We owned it for just over two years and made a great profit on the sale of it (we sold it ourselves and found a buyer the first weekend we advertised it). We had to go to another building to do our laundry. Although it wasn't ideal, we both had lived in apartments before where we did not have in-unit laundry facilities, so we were used to it.

Re: Co-Op... So torn, need advice