In the first part of this series, Engel & Völkers shed some light on the sometimes bewildering world of co-operative buildings. While these apartments account for around 80% of those available for purchase in NYC, they aren’t suitable for all buyers. We’d like to introduce you to a type of apartment already long common in other parts of the USA – the condominium.
As new residential buildings spring up in the city, the condo is becoming increasingly popular. There are still far fewer generally available, however, meaning a prospective buyer has fewer options. Nevertheless, a condo has some distinct advantages over a co-op, especially for a non-US investor.
A condo is a real piece of property – you’ll be presented with a deed, just as you would when buying a house. Often, condo properties will come with certain facilities, such as a gymnasium or a pool, which you will not own, but have the right to use under the terms of your contract. This means that your apartment will be far easier to sublet, making it perfect for investment buyers.
You will have to pay ‘common charges’; similar to the maintenance payments you would owe for a co-op. This goes towards the upkeep of the building and its staff salaries. As all condominium buildings have to be owned outright, there will be no mortgage contributions to pay.
As a deed holder for your property, you will get an individual tax bill for the apartment. This will sometimes include a percentage of the tax on the communal facilities of the building, but this will vary from place to place. The maintenance contributions you make on a condo are not tax deductible like they are on a co-op.
Board of Directors
There will be a condo association attached to the building, which sets the rules for the community and deals with its day to day running, but this functions slightly differently from the group that forms the structure of the co-op. There is no detailed investigation of prospective buyers, for instance – the process from offer to closing is far quicker, as the board will only undertake the normal financial disclosure checks. Condo associations are also far more likely to approve buyers from overseas, something that is rare among co-op associations.
The Buying Process
This is very similar for both co-ops and condos – the main differences lie in the amount required in down payment, and the time it can take to approve a buyer. Co-ops often require between 20%-50% of the purchase price as down payment, whereas a condo will often accept 10% when you sign. Because of the need for Board approval, co-op purchases can take up to 90 days, whereas it is unusual for condo approvals to take more than 60 days.
No matter which type of apartment you choose, E&V will be there to guide you through every twist and turn of the buying process. Our detailed local knowledge and experience will prove invaluable to buyers from the US and elsewhere, ensuring that everything runs smoothly. Visit E&V USA to find out more.