The New York City Buyer’s Guide: Condos vs. Co-ops vs. Townhouses

When looking for your new home in New York City , it’s important to understand the different types of housing options available. Knowing the difference between a co-op, condo and townhouse will play an important role in your decision-making process. Here, in the second part of our three-part New York City buyer’s guide, we have outlined everything you need to know about each property types and the pros and cons associated with each. Co-ops vs. Condos vs. Townhouses Cooperative Buildings Co-op buildings are more common in New York City than in other parts of the country. Approximately 75% of available New York City apartments at any given time are co-ops , while the remaining roughly 25% are in condominium buildings. Individual tenants do not “own” their apartments as they would in the case of “real” property. Rather, co-ops are owned by an apartment corporation and individual unit owners are “shareholders”, which entitles them to a long-term proprietary lease. Co-ops are traditionally stricter when approving a buyer whose funds are not in the United States. Condominium Buildings Most new development apartments in New York City are condos. When you buy a condo in New York City, you get a deed as if you were buying a house—this categorizes these units as “real” properties, unlike co-ops. Condos are the preferred choice for those with assets held outside of the United States or for buyers who are interested in greater ownership flexibility.   Co-op Condo Cost Generally more attractive. Generally more expensive. Approval Process The board interviews all prospective owners and has the right to approve or reject any applicant. No interviews are required. Application is not as rigorous as the co-op board process. Financing Be prepared to put down at least 20% of the purchase price, plus closing costs. Be prepared to put down at least 10% of the purchase price, plus closing costs. Monthly Fees Maintenance fees based on the number of shares the tenant owns (typically dictated by apartment size and floor level). Common charges (services and amenities shared by condo residents) and property taxes. Tax Benefits Shareholders can deduct their portion of the building’s real estate taxes and their proportionate share of the interest on the building’s mortgage. Real estate taxes are deductible, but common charges are not. Subletting Must be approved by Board of Directors. Typically permitted. Selling Board will need to approve the new buyer. Can be sold at will. Townhouses & Brownstones A townhouse is defined as a multi-story urban home, usually attached, that’s built close to the street and scaled similarly to the buildings surrounding it. Oftentimes, they are multi-unit homes. They are sometimes renovated into a single unit or can be used as rental units for additional income. A brownstone is a type of town home, recognizable by the reddish-brown sandstone of its façade. When you purchase a townhouse, you own both the structure itself and the land. It has its own roof and may have a garage or private yard included. You’ll most likely have more freedom and flexibility with how you treat your property, particularly regarding renovations, subleases or additions. However, it’s important to research the zoning laws for these same reasons. While you won’t pay monthly common charges or maintenance fees as you would for condos and co-ops, you are 100% responsible for all repairs and general upkeep. Only about 2% of available residential properties in New York are town homes, which creates a competitive market. Working with a knowledgeable agent will give you an advantage over other buyers. Explore homes for sale in New York City or read the final installment of our New York City Buyer’s Guide .