There are four basic options when purchasing a home in New York City: a co-operative, a condominium, a townhouse or a new construction project. Researching each type of property is essential in determining which home will be right for you, as well as understanding the purchasing process.
Most of Manhattan's great prewar buildings are co-ops. When you purchase a co-op, technically speaking, you do not actually own the apartment; a corporation owns the building itself. When you buy an apartment within that building, you are buying shares in that corporation and receiving a lease giving you sole and exclusive right to the use of your particular apartment.
The corporation is run by a Board of Directors, which is elected each year by the tenant shareholders of the building. If you are looking to purchase a co-op apartment, be prepared to have your financial, professional and social background thoroughly analyzed by the building's Board. Additionally, a Board's authority extends to deciding such matters as renovations, costs of building maintenance, and the size of the building's mortgage.
A condominium is a type of apartment ownership in which the owner owns real property, yet the apartment is part of a much larger building in which other owners own individual units. Owners share common areas of the property, such as entrances, hallways and recreational facilities, with the other residents. Condos are a very liberal type of ownership and are usually favored by foreigners looking to buy in Manhattan. The regulations regarding ownership are more lax than those in cooperative apartments. While a condo still has a Board of Directors or association to help maintain the building as a whole, unlike a co-op, the Board does not decide who can or cannot purchase in the building. Subletting rules and pet policies are also more liberal than in cooperatives.
Condominiums usually allow owners to finance upwards to 90% of the purchase price and individual owners are responsible for monthly real estate taxes. One of the most important benefits is the financial structure of a condominium, which facilitates financing for the developer and resale for the individual purchaser. Most buildings developed in the last twenty years have been condominiums.
The townhouse was pre-eminent in the 1900s and up through the 1930s. The townhouse was primarily built as private residences with one family occupying the entire structure. These structures were usually built in groups and referred to as row houses.
If you are looking for complete privacy and authority over use of your property, purchasing a townhouse is your best option. It also offers an enormous amount of space at a more reasonable cost than either co-op or condo ownership could afford; townhouse ownership frequently offers the best per square foot value in the city.
If you do not mind the responsibility of being a landlord, purchasing a townhouse can also substantially defray expenses if you occupy part of the building while renting out the rest.
The real estate market in New York City is booming and new construction is the fastest segment of this growth. These new construction condominiums are the hottest, most fluid properties in New York City.
There are many benefits of new construction over traditional condos and co-ops. Pre-construction prices of new developments are usually well below secondary market prices, making for a great investment opportunity and the ability to move into your dream home with instant equity. Since the majority of these new developments are condominiums, there are few restrictions and less down payment is required. In many cases, there is financing in place with incentives or a pre-arranged banking partner familiar with the project. Furthermore, new developments have special tax abatements so your real estate taxes will be considerably less, often resulting in up to 10 years of fractional tax payments. Prior to closing, it is also possible to resell an executed contract with the consent of the sponsor, thus avoiding closing costs.
Elegran is at the forefront of the New York City new construction market, and we have up-to-the-minute listings on new construction as well as literature and access to all major new developments.