Buying Metro Area Real Estate in New Jersey — Condos vs. Co-ops

Some aspects of buying real estate in the New York City Metropolitan Area are the same as anywhere else. You need to save enough to cover a down payment. You must have good credit. And you’ll have to shop around until you find what you want.

One of the big differences between real estate in New Jersey and most of the country lies in the prevalence of two housing types that are common in the metro area, including Hudson County — condos and co-ops.

Condos Vs Co-ops

The terms condo, or condominium, and co-op, short for cooperative, refer to distinctly different methods of sharing an ownership interest in common property, such as a multi-unit building and its grounds.

In a co-op arrangement, the building is collectively owned by its tenants. You buy a share in the building and, in return the co-op gives you a dedicated lease for a certain unit. The operation is typically run by an elected board of tenants, who contract out to a maintenance company for services.

In a condo, you buy a fully deeded unit in the building, which means you own the space and are typically responsible for everything that happens within. An elected condo board is responsible for maintaining the exterior and common spaces of the building.

Co-op boards tend to wield much more power than condo boards, both in selecting tenants and in governing them once they have moved in. The selection process can be quite intrusive — co-op boards can demand a raft of personal information and financial information about you, and can refuse to sell to you based on any reason(s) they choose, short of those that are illegal, such as race or sexual orientation.

Once in a co-op, you can be evicted and forcibly bought out if you cross swords with the board or its rules.

Condo boards can also set standards for entry, but they tend to be more financially oriented and more inclusive. And their ability to evict you or restrict your lifestyle choices tend to be more limited.

Where Do You Find Them?

Condos and co-ops exist in all of Hudson County’s markets, although standalone homes, townhomes and brownstones are much more common than they are in the more concentrated neighborhoods of Manhattan across the river.

If you are trying to decide whether a condo or a co-op arrangement best suits your needs, there are many considerations to take into account.

Compare Fees

Co-ops cover the property taxes on their buildings, which are then passed through to the tenants as part of the maintenance fee. This means that co-ops will appear to carry fees that are much higher than similar condos. Also be aware that condo owners pay their own property taxes, in addition to the maintenance fees on their buildings.

Ask About Maintenance Reserves

If you’re considering a condo, a co-op or even a townhome that shares exterior space with other units, you need to ask what provisions have been made for large, predictable future expenses. How, for example, will the community pay for a new roof, a new pool, or a new clubhouse when the time comes for replacement or major renovations? Check to make sure the community maintains an adequate reserve fund to avoid large assessments in the future.

Think About Barriers to Resale or Relocation

This is most important if your work might transfer you suddenly to, say, London at some point.

Co-ops, by their nature, can post barriers to resale because the co-op board must approve any new tenant that you choose to sell to. Some co-ops also ban subletting, which could be costly for you if reassigned for only a few years and plan to return, or otherwise don’t want to sell.

Condos tend not to carry subletting restrictions and are more readily open to new buyers, as a rule.

Think About the Living Qualities of Each Ownership Type

Co-ops are often more restrictive in their tenancy rules than condos. They may ban pets, limit noise at certain hours, restrict your ability to renovate or redecorate, and restrict your ability to sublet to a renter, for example. Those kinds or rules can feel restrictive to some, but are reassuring to others who want to ensure that the living space they buy will remain unchanged.

Condos generally allow more freedom. But with freedom may come the need to put up with your neighbor’s dogs, late-night noise or future unsavory renters.

Assemble a Team

The metro area real estate market is among the most expensive and most complicated in the world. So having an experienced, vetted full-service agent on your side to help guide you through the thickets of property types, taxes, fees, resale possibilities and rules will prove to be invaluable.

You’ll need more than a real estate agent to complete your transaction. A good lawyer is also a key to success, and other professionals, such as a great contractor and interior designer, may be among the teammates you need to convert your property into your dream home. The seasoned agents at Pure Properties are thoroughly versed in the best neighborhoods and finest properties of Hudson County, and are able to draw from an expertise in residential real estate sales to make your deal work smoothly for you.


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