Advantages & Disadvantages of Coops & Condos
Condominium units give buyers individual ownership of their private apartment or town home, and supply shared ownership of all public spaces. Coops feature a similar arrangement, even though owners should buy into the entire property rather than buying a single property. Both condos and coops make it possible for buyers to enjoy the benefits of home ownership, but each comes with its own drawbacks that have to be considered prior to purchase.
Advantage: Low Maintenance
Condos and coops relieve owners of their duty of maintenance and repairs on the community appropriate. Individuals with busy schedules enjoy independence from mowing and caring for a lawn, shoveling snow or cleaning the outside of the house. There is no need to buy and maintain a lawn mower, snow blower or other expensive equipment, which also reduces storage requirements. The homeowners association or management board handles all these jobs on behalf of all the owners.
Advantage: Reduced Prices
According to the Utah State University Extension, owning a condo or coop is often more affordable than renting a flat or town home. Ownership also provides long-term cost stability compared to leasing. Oftentimes, condominium and coop ownership also offers a low-cost alternative to owning a single-family house. Condos and coops make it possible for people to reside in expensive urban areas where property prices may make it difficult to purchase a single-family home. These kinds of housing also lessen the risk of expensive repairs and upkeep. Any major expenses are shared by all owners, reducing the burden on individual investors.
Many condos and coops are handled by associations or management boards. These associations can place major restrictions on the actions of owners. The board may restrict pet ownership, noise and action levels. They may also limit the kind of renovations or decorating changes that owners can perform, or restrict choice of cable and Internet providers. Both condos and coops can be tricky to market, as each may require owners to look for consent from the board prior to the sale. This lack of liberty can pose certain challenges in condos where investors own a large number of properties, however don’t live onsite. These investors may outvote residents on issues, and the outcomes of those issues may prefer financial investors rather than those who reside in the construction.
Disadvantage: Surprise Fees
Condos and coops include an annual fee designed to cover maintenance and management fees. While owners have any idea of their present fees when they invest in the home, this fee could increase every year, and may grow much faster than the rate of inflation. Since all financial decisions are derived from a set vote, many owners may find themselves paying high fees to cover services they don’t even use. Some contracts also permit the board to assess additional fees to cover exceptional projects or major renovations and repairs.