Brooklyn Property Types
In this uncertain world, one thing is for sure: Buying Brooklyn property (whether it is a house, Co-Op, or condo) is always a good idea.
Whether you’re looking to buy a condo, co-op, or townhouse is up to you, but as with any venture, it’s important to understand your options.
As with most anywhere, Brooklyn has houses available for sale. However, unlike much of the country, there are other Brooklyn property types to consider: Co-Ops and Condos
Co-ops have been the traditional form of owning an upscale NYC apartment for close to a hundred years. In fact, in New York City, 85% of all real estate – and almost 100% of the grand pre-war apartments on Fifth, Park and Central Park West are in co-operative buildings. Co-ops are a common form of Brooklyn property, as well.
Co-ops are owned by a corporation, you don’t actually own a co-op. When you purchase within a co-operative building, you’re buying shares within the corporation. This entitle you, as a shareholder, to a “proprietary lease.” The larger your co-op apartment, the more co-op shares you own.
Co-op shareholders pay a monthly maintenance fee to cover the co-op building’s expenses. The fee covers such items as heat, hot water, insurance, staff salaries, real estate taxes, and the mortgage indebtedness of the building. Portions of these fees are tax deductible due to the building’s underlying mortgage interest. Also, shareholders can deduct their portion of the building’s real estate taxes.
A Co-op Board of Directors has the ability to determine how much of the purchase price may be financed. The minimum cash requirements vary from building to building.
Subleasing a co-op can sometimes be difficult. Each co-op has its own rules and they should be carefully reviewed prior to purchase.
All prospective buyers must interview with the Co-Op Board. Prior to the interview, prospective purchasers prepare a “Board Package.” This usually contains personal and professional letters of reference as well as a great deal of personal information concerning income and assets.
As more and more new buildings are constructed, condominiums (condos for short), are quickly gaining in number and popularity. It’s not surprising. As opposed to a co-op, a condo is “real” property. Condos are becoming a more common type of Brooklyn property, however, they do tend to be more expansive than co-ops.
A condo buyer receives a deed just as though he or she were buying a house. Each individual apartment in a condominium receives its own tax bill. There is still a monthly common charge similar to the maintenance charges in a co-op. These charges don’t include your real estate taxes and are not tax-deductible. They also tend to be lower than in co-ops because there is no underlying mortgage for the building. The straightforward nature of buying a condo, coupled with the fact that in some cases, you can finance up to 90% of the purchase price and sublease at will, makes them the best choice for flexibility.