DIFFERENT Property Types Pros & Cons

Author: Mohamed T Gulamal

​There are multiple property types and each one has benefits and disadvantages depending on your needs and preferences. Out of the several options we’ll explore the most relevant ones:

1. Cooperative (co-op)
2. Condominium (condo)
3. Single Family home
4. Multi Family home (2-4 units) Note: Anything above 4 units is considered a commercial property.

Let’s start with comparisons between Co-ops & Condos:

-	Co-op	Condo
Ownership	You are buying shares of the board that owns the building & not property. ​	You are a property owner
How ownership is documented	You receive a “proprietary lease”	​You receive a deed to your property
Are you allowed to rent the unit	Renting is usually restricted	Renting is usually permitted
Is Board Approval required	Board approval is required to buy	Board approval is usually not required to buy
How are the property taxes paid	The monthly maintenance charges include property taxes	You pay your own property taxes
Affordability ​	More affordable for a first time home buyer	Prices are usually higher than coops
Investment	Cheaper than a condo Lower closing costs since there is no actual property	Easier to sell than co-ops since no board approval process Lower down payment Ability to rent the unit

• Shared Yard: Condo and Co-op yards are normally shared with the entire building.
• Special Assessments: If the association doesn’t have enough money to cover repairs it will issue an assessment requiring owners to pay a fee to cover the costs.
• Size: Condos and Co-ops are typically smaller than a single family property.
• Storage: Condos and Co-ops typically have less storage due to lack of basement, attic and garage.
• Financing: Condos and Co-ops are usually harder to finance, since banks are stricter due to the extra risk
• Make sure to view it at night or on the weekend to get an idea of how loud the neighbors are.

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Single Family Home

Advantages: Living Area: Single family homes typically have a larger living space. You’ll exclusive access to your own yard & land. Single family homes sometimes have more storage space in the forms of a: basement, attic and garage. Expansion: It’s your prerogative to make any additions to your home such as an adding a floor or an extension on the side. Financing: It is normally easier to obtain financing compared to a condo or co-op.

Disadvantage: Maintenance issues such as repairs, landscaping, and snow removal are your responsibility.

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Multi Family Home

Advantages: Your monthly net cost may be lower a month since you’ll collect rent. Multi unit properties are ideal investments because of the rental income & when you decide to sell this will also entice buyers. They have multiple tax write offs Easier to qualify for a mortgage: a portion of rental income counts towards your qualifying income.

Disadvantage: Maintenance issues such as repairs, landscaping, and snow removal are your responsibility. Difficult finding an ideal one because of all the demand

Author: Mohamed T Gulamali