Condo vs Co-Op

well, I'll tell you this right now, if you tell the co-op board that you plan to rent out your apt. regularly, or even worse, rent out the rooms, you stand absolutely no chance of getting approved. And in a co-op, you cannot rent out individual rooms. Nobody wants to have a half-way house as their neighbor. I would not be surprised if one of your neighbors turned you in for renting out rooms.

zip

how do you know he has no chance? You do not know anything about his finances.

Finances have nothing to do with it. Co-ops in general don't allow long-term guests while the owner is away. There're probably exceptions, but no clue how to find them.

I'd go with something I could carry while away without being mini-landlord.

What's your price/neighborhood? Condo does sound like your best bet but new construction could be difficult with new financing rules as you have found out. Maybe a prewar condo?

A coop MAY let you sublet once every 5 years for 1-2 years. That's kind of an averaging of coop policies many are more restrictive, very few are less restrictive. Part of the reason is financing: bank requires x% be owner occupied and coops aren't interested in lowering the number of owner occupied units. Second, it makes for a lousy community to have subletters in the view of most coops. It creates headaches that are to no shareholders' advantages and just benefit the absent owner.

If you leave the city for long stretches and MUST rent when you are gone for financial reasons, then a coop is unlikely to be a good choice for you and I wouldn't waste time. Those which would accommodate your needs are too few and far between--I've never seen one I'd live in of any quality that would permit such an arranngement. I've served on admissions committees and boards, and if I knew a potential shareholder had your situation I would not have approved the applicant.

I think keeping an eye on condos is a better bet for you, or just going the rental route.

CJ123, disclosing your price range and neighborhood preferences may solicit alternatives areas or options that you haven't yet looked at. You will want to stick with a condo, probably one that has was first sold over three years ago or more, since those tend to be fully sold with no large blocks, or fewer investor units, and at lower effective costs to the owners. Sometimes you can get an updated unit that's in even better condition than it originally sold for 10 or 20 years ago. Plus older units can have more generous layouts.

Thanks for the insight everyone. I'm looking mostly downtown (most anything between 30th and Houston but not too far east) and I'm looking at spending anywhere between $1M~1.3 I can put down about 50%

How would a co-op feel about just having a long term roomate? I'm single and in my mid 20s. Would they take that into consideration?

spinnaker1, many prewar condos may have financing difficulties--don't they have many sponsor owned tenants in place that could exceed 30% of the building?

If you want income from a roommate, skip the coop--it's unlikely to ever be approved. As a young person, you've probably only considered newer condos, no? My advice to you is if you are really impatient and you want to buy NOW, then look at Condos that were built and sold fully new 5 to 10 years ago. You may not get the latest finishes on the kitchen and baths, but you will get financing.

Your constraint is likely that your price is low for a downtown 2 bedroom, particularly if you want to avoid the cheaper eastern edge of manhattan. If you really want to own, choose FiDi, Batter Park City or Uptown or Midtown where prices are more reasonable. You can always travel to get to restaurants and clubs. Where you want to be today may not be where you want to be in 10 or 20 years, and the most cost effective way to invest in real estate is to invest for the LONG HAUL. It is VERY EXPENSIVE to trade real estate--something brokers gloss over.

Others please correct me if I'm wrong ...

I believe a first buyer who acquires a coop unit from the Sponsor:
1. Never has to solicit Board approval
2. Is exempt from many of the restrictions (i.e. guests while away, roommating, and subletting) that apply to other owners in the building

CJ123 have you considered Murray Hill (East 30's)? Plenty of condo buildings here.

When buying from sponsor to live in the place, then #1 is true. #2 is not true: you become just another regular owner, subject to same by-laws and proprietary lease.

On the other hand, if you buy from the sponsor to rent out, then you may become a Holder of Unsold Shares. All kinds of litigation about that status, though.

Most of what everyone has said so far = mostly true. Pretty much all coops and many Condoops usually come w/ rental restrictions, and most of the NYC boards TRULY seem to hate renters. I personally don't understand why they are so uptight about it, but they somehow ALWAYS find out about illegal renting and illegal room sharing. It makes you wonder whether Gladys Kravitz (from Bewitched) might live in your bldg.

Many coops allow renting (not so much room sharing) under certain restrictions (2 out of 5 years; financial reviews and interviews required, etc.) on paper, but I have heard so many stories whereby the board would have a history of REJECTING all rental applicants. So, if you are thinking of purchasing with renting/sharing in mind, coops are to be avoided.

I think that what Alan is referring to is the purchase of sponsor rights (there's probably another name for it, I just don't know what it would be).

A coop really cannot prevent you from having someone live with you if you live there. It would be tantamount to telling a single person they couldn't have a fiance move in or had to be married to have the other person move in. That gets too close to discrimination based on marital status. But if you are not living there as your primary residence, then the other person likely cannot either. The coop can fine you, require you to evict the person, reimburse the coop for legal fees if any are generated...it becomes very unpleasant. ONLY BUY WHERE YOU KNOW YOU CAN ABIDE BY THE HOUSE RULES. It is simply not worth trying to game a coop.

As someone who has been involved with boards and admissions committees and who has lived in moderate and highend coops for over 20 years in downtown Manhattan, I can tell you why coops don't like sublets. (1) It lowers owner occupancy figures which banks don't like. (2) Subletters are difficult to get rid of if they are a problem and necessitate legal action that is an unwelcome expense. I've seen a subletter basically hustling tricks in a shareholder's unit, another running a business (hair cutting) off-hours in their unit which was against house rules, another who beat up his girlfriend to the point 911 had to be called twice, one who piled garbage by the trash shoot and simply refused to put it down the chute despite countless instructions to do so, and yet another subletter who had people coming to the building to deliver drugs to him. Shareholders may do these things, but the shareholder has a major investment in the building they don't want to lose and can be fined. A subletter has no such constraint on his/her behavior. And an absent shareholder is difficult for the board to contact to resolve such issues. It is a headache for everyone and benefits only the absent shareholder--that is why sublets are frowned up. They erode the community that is a coop.

Coops aren't for everyone, and that is fine. But coops are for those who chose them and the rules are rarely arbitrary--they are choices about how the 'community' chooses to live. Personally, I wouldn't live somewhere that bans pets like some coops do. But I understand some people are allergic and if a coop wants to establish itself as a community that caters in part to allergic people by banning all dogs, so be it. I move on.

And also people who don't like pitbulls who like to lick the feet of people wearing flippers, as happened to me last week. Kiss, my ass.

alanhart, personally I agree about the large dogs--I think they smell, slobber and I do not appreciate them in an elevator as I'm going to work in a suit in the morning. Some are just frightening. But some buildings even bar little dogs an owner could carry in and out. I think that's a bit much, but I imagine most of us can live without ever owning at 11 Fifth Ave if an all out pet ban is what they want to do. To each his own.