Choosing what to buy and where to live in the Minneapolis-St. Paul area can be overwhelming. With so many choices for nearly every available budget, it can be tough signing the dotted line. When it comes to condos and coops, specifically, the benefits of sharing responsibilities–especially in neighborhoods where prices are high–can outweigh any concerns.
Here are 3 major differences between condos and coops–
1. Ownership for condos and coops is different. Put simply, condos are owned by individuals, whereas coops are owned by corporations. When you buy a condo, you are investing in property (and receiving a deed), but when you “buy a coop,” you are actually purchasing shares of the corporation (in which the deed is shared by everyone). Neither is better than the other, but both offer positives and negatives. The approval process for buying into a coop is typically much more rigorous, where closing costs for a condo are typically much higher.
2. Fees for condos and coops are different. Typically speaking, both condos and coops come with monthly fees to cover maintenance and community resources such as a pool or workout room. The fees for coops may often be higher than condos since the corporations are still generally paying an underlying mortgage on the property itself, and because taxes must be paid by the cooperative. That said, condos are often more expensive than coops once individual fees are taken into account.
3. Community for condos and coops is different. While both condo and coop neighborhoods lend themselves to more interaction due to shared fees, community for coops is generally closer-knit since decisions are made (and experienced) by the group. Everything from choosing paint colors to hiring a member of maintenance staff must be decided by the group.
Bottom line: Choosing between a condo and coop requires careful consideration. Both offer benefits and can be a good decision based on what you need.