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Buying a co-op: The things that matter

You've been interested in purchasing either a condo or a cooperative housing project. You have the money to put down on either, but you're not sure which one will end up making you more money in the end. You want to have an easy lifestyle there and also to obtain investors into your community.

There are benefits to both co-ops and condos, depending on the situation. Here are a few things to consider about a cooperative and what having one entails for the board and its residents.

Should you buy a cooperative housing project?

Co-op housing is special in that it's owned by a small corporation. If you decide to own a co-op, anyone who purchases a home is essentially buying a share of your corporation. That share entitles the buyer to a leasehold on that unit.

Co-op residents typically pay monthly maintenance fees, which cover things like the co-op's lawn care, maintenance, real-estate taxes and staff wages. In a condo, the difference is that the resident pays property taxes, and there is usually a low association fee for being part of the community.

Co-ops are harder to exit once you buy into them. If an occupant decides to sell his or her shares, the board may decide to tax him or her for doing so if the sale happens too quickly after the initial purchase. On the other hand, if you choose a condo, you can sell and buy as and when you wish, although the homeowner's association at the community may wish to have some say in who purchases the property.

Source: Bankrate, "Weigh pluses and minuses of owning co-op," Steve McLinden, accessed Nov. 02, 2017

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