No matter what type of property you are purchasing, you know that it is a big decision to make. Before you make such a major decision, it is important to learn about your options. Condominiums and cooperatives are both good options for people interested in owning their own property in Texas.
Pros and cons of a condominium
Condominium units are typically part of a larger building but are purchased by individual owners. Owning a condo allows you to enjoy some of the benefits of apartment living (use of common spaces), as well as some of the benefits of being a homeowner (property is seen as an investment with upside). The process of selling a condo is fairly easy, compared to selling a co-op, and you can also rent it out to tenants.
While condos are easier to finance than co-ops, they usually come with higher closing costs and taxes and association dues that go toward maintenance and renovations.
Pros and cons of a co-op
When a corporation owns a building, you have the option of holding stock in that corporation rather than owning actual real estate. If you own a certain number of shares, you will be able to live in the building. This is referred to as a cooperative. The CEO, managers, and board of shareholders will generally be responsible for handling any maintenance issues that arise. Owning co-op shares will generally cost you less than buying a condo and you will generally have access to better amenities due to the high owner occupancy.
There are a few downsides to co-ops in that it is an investment with little upside, the fees can be expensive, and it may require a higher down payment if financing is not allowed. You will also not be able to rent out your co-op space and you will not be able sell your space unless the board approves of your potential buyer.
It can be difficult to understand the differences between a condo and co-op. An attorney who handles property matters can explain both options and help you decide whether owning a condo or co-op is right for you.