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fartness (banned)
Donald Trump 2016
join:2003-03-25
Look Outside

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fartness (banned)

Member

[OT] Coop housing

I live 5.5 hours away from NYC, in Upstate NY. The concept of a coop is new to me, so I read what it is and get the basic idea (does not own it, does not pay property taxes, pays a monthly maintenance fee etc). So what seems to be the catch?

I was looking at small apartments or condos that I can buy somewhere north of NYC if I decide to move there. We will use White Plains for example. I don't see many apartments or condos listed. They mostly seem to be coops. Prices don't seem bad, anywhere from $120k to $180k for something that seems decent (I am fine with 700 sq ft, as I live alone). Maintenance fees seem to be around $700 a month. With a 15 year mortgage on $150k with nothing down, that's about $1000 a month, plus the $700 maintenance fee. Heat and taxes are included. $1700 total for 45 minutes from Manhattan seems low/too good to be true? I'd have a down payment of course.

What happens if I want to paint tohe walls, change the carpets, remodel the bathroom, rent it out, or sell it?

Again, this concept is new to me since it's not common where I live. Can you explain it a bit more? Or are these ripoffs?

Do condos have similar sets of rules? Are they better? What would one pay with a condo versus a coop?

In terms of budget, I'd say $2000 a month (mortgage, taxes, common maintenance fees) would be easily doable. I'd want as close to NYC as possible, but not in NYC or anywhere I'd have to pay extra income tax for living there. Some of my coworkers who work in our NY office rent places in NYC for $2000 a month in decent neighborhoods, which seems low. I don't want to rent since it's a waste.

altermatt
Premium Member
join:2004-01-22
White Plains, NY

altermatt

Premium Member

In a co-op you don't own the physical apartment outright, but you do own "shares" in the co-op, the number depending on the apartment (more shares for larger/more expensive apts.) But in many ways, it is just like owning. You actually DO pay property taxes---they are included in your maintenance fee, and you are eligible for the NY State STAR credit (a rebate on taxes given once a year), more or less depending on your age and income. Very generally, anything considered "within the apartment" is your responsibility and anything considered communal is the co-op's, so if something breaks i.e. a pipe under the sink, that is considered inside, you pay, and if it's, say, a pipe within the wall, usually it's the co-op's responsibility. Usually you pay your own electric and gas, but heat is paid by the corporation. But of course, any costs to the co-op are eventually passed along through maintenance increases or one-time assessments.

There are house rules, usually requiring carpeting over 80% for instance. You can paint any way you like, but remodels usually require board approval, and sublets are always restricted, some buildings being more restrictive (not allowed or allowed with a 'sublet fee', or more liberally allowed) but often require board approval of the tenant as well as VERY strict rules when it comes to selling. The prospective buyer must submit many financial docs (you will probably go through this yourself) and have to be interviewed and approved by the board.

In a condo, you own the actual apt. so it theoretically can be easier to sell. Westchester has way more co-ops than condos (NYC, I believe, even more so) and the county has many resources available that will help educate you a bit more on the intricacies. The prices you quote are quite good for Westchester, depending on the location; iffier neighborhoods naturally demand lower prices. So make sure you've spent time driving around the neighborhood, checked out the schools (even if you don't have kids, that's a big determinant of selling price and eventual value), and spoken to residents about how responsive and helpful the board and managing agents are (they can be VERY stingy and restrictive or much more accommodating.)

As a rule of thumb, you will almost always find prices in Westchester cheaper than in the City, depending again on neighborhood of course. And if you're close to a Metro North station, commuting is a breeze (just add in the substantial cost of a commuter ticket to your monthly estimate, though.)

Hope this helps.
fartness (banned)
Donald Trump 2016
join:2003-03-25
Look Outside

fartness (banned)

Member

Definitely helps, thanks!
Maggs
Premium Member
join:2002-11-29
Jackson Heights, NY

Maggs

Premium Member

I'm currently in a COOP, just bought it in November. The accountants calculate the proportional share of real estate taxes and underlying building mortgage, and give us per share amounts. You then multiple your number of shares against those amounts, and that's your deductible expenses from the coop corporation.

You may also have a share secured mortgage, the interest and points on it are tax deductible. In 2015, I'm looking at around $12k in itemized deductions for mortgage interest and coop maintenance. We also have an 80/20 rule, where 80% of the coop apt floor space must be covered with carpet or other noise dampening materials.

Make sure you gather at least 6 months of every bank, brokerage, and financial statement you have. You will need 2 years of tax returns as well. My board package was over 400 pages in duplicate.
Maggs

Maggs

Premium Member

My mortgage is $695.95, and maintenance is $607.97. The coop makes their money via a 25% flip tax on the unit.

Frank
Premium Member
join:2000-11-03
somewhere

Frank to fartness

Premium Member

to fartness
coops are cheaper because they are harder to buy and sell (coop board usually has to review financials of new buyers and some coop boards are a bit stingy when it comes to that.) and also because they are alot harder to rent out (with many coop boards opting to prohibit this or having alot of rules).
Maggs
Premium Member
join:2002-11-29
Jackson Heights, NY

Maggs

Premium Member

The COOP I'm in must be 100% owner occupied.