I can’t help but notice that a fair number of my younger buyers are interested in buying condos, specifically. Not co-ops. Not con-dops (don’t even ask). Just condos. I’m not sure I knew what a condo was when I was the ages most of these youngsters are, but more power to the, new, more economically savvy, younger generation! Someday they will be paying my mortgage, or hiring me, I’m sure.
For the most part they seem to be attempting to prepare for an uncertain economic future (they’re not pessimists—they are just very conscious of the fact that money has a way of doing things you may not expect). They can imagine getting married and moving out of their place and maybe not being able to sell right away and renting it out as a stop gap. They can imagine having increasing salaries, saving a lot, and buying another place to live in, and keeping the first one as an investment with a tenant in it. They can imagine other buyers in the future might want to buy condos preferentially as well so they might be easier to sell.
Condos also have a reputation for being “easier” to get into than co-ops (no small thing in NYC) and therefore might be more accessible to folks without a million dollars in the bank after the purchase. Also, condos often have lower monthly charges.
What sophistication! When I was in my 20s I was still trying to figure out what to wear or how to do my hair. And frankly these young ladies and gentlemen are not wrong. Those benefits are quite real, and can certainly mean that condos are a better fit sometimes, but there are numerous factors to consider in choosing between a particular co-op or condo. (And that is the right way to think about it, a particular condo vs. a particular condo because there can be a lot of variation in each).
I don’t mean to ruin your bliss—maybe just mitigate it a little and bring it into the context of reality—by mentioning some things worth considering as you make your decision:
- Everyone has figured out that condos can offer certain benefits in terms of rentability (including condo sellers), so the prices are higher typically than they are for co-ops. There are also substantially fewer condos, which also drives up prices.
- A lot of condos are newer construction (though not all) and despite the cool shiny new look and flat floors that that offers—some new construction is total junk. And then some is really beautifully made. Please inform yourself about the quality of the building and look for telltale signs of fast or cheap construction.
- Look out for common charges that reflect a tax abatement. If the taxes are abated that means that when the tax abatement period ends, those monthly numbers will go up. Maybe a whole lot. Common tax abatement lengths are 10 years and 25 years. Ask your agent about this.
- Will you be able to rent the place? Ask yourself this seriously. A beautiful condo in a location no one wants will not rent for the amount you want. Or it may be hard to find tenants.
- Some condo applications, and some condo associations, are demanding just the same way co-op boards are. They may have requirements for assets after the sale and income just like co-ops. A lot of condos do demand condo approval for sublet tenants just like co-ops do.
- Conversely, some co-ops have pretty liberal sublet (rental) policies. Generally customers are surprised when I tell them that while a lot of co-ops have an owner-occupied requirement of a couple years, many will allow you to sublet after that for a year or two (or more!) with co-op approval.
Thanks for reading, Alexandra Florio;The Corcoran Group 646-269-1072.