How the money works
- Share price: paid up front. It is usually lower than the price of a comparable condo because the co-op carries a mortgage on the building.
- Monthly fee: your share of the building's mortgage, property taxes, insurance, maintenance, staff and amenities.
- Taxes: members may be able to deduct their share of the co-op's mortgage interest and property taxes; ask your CPA.
Equity vs. limited-equity co-ops
In a market-rate (equity) co-op, your share's price moves with the market. In a limited-equity co-op, the bylaws cap how much the share can grow, which keeps prices lower for the next member but limits your gain. Know which one you're buying.
Questions to ask
- How much of the monthly fee is the building's mortgage, and when does that loan mature?
- How have monthly fees changed over the last five years?
- How are shares resold, and how long does it usually take?
- What happens to the share if a member passes away?
- Is there a waiting list? Are pets allowed? Guest suites, parking, activities?
Have the bylaws and financial statements reviewed before you commit; we'll go through them with you.