Author Topic: Comparing Coop Apartment to Single Family House  (Read 1263 times)

historienne

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Comparing Coop Apartment to Single Family House
« on: February 11, 2017, 05:45:32 PM »
We are currently shopping for a home.  Most of the housing stock in the area we are looking in are single family homes, in the form of attached rowhouses.  There are also a few coop buildings.  For the space we want, we would pay $275-300,000 for a rowhouse, or 155-170,000 for a coop.  The coops all have significant maintenance fees, $800-1,000/month.  Fees include property tax, exterior maintenance, insurance, and most utilities (sometimes electricity is separately metered). 

In either case, we'd put 20% down and get a 15 year mortgage.  Mortgage rates will be slightly higher for the coop, because we are restricted to a handful of specialty lenders - probably 3.625% instead of 3.25%.

Can someone help me run the numbers on this comparison?  If it helps, our strongest contenders are a 300k single family home and a coop that is asking 160,000 with fees of $1025/month.  Property tax on a 300k home is about 6k/year.  I do not know how much utilities would be, since I've never lived in one of these kinds of houses before (we are moving from a different state), but I'll estimate that the difference is about $100/month.

ETA: There are other lifestyle considerations, obviously, but I think I have a handle on those.  I need help with the math part of it.

« Last Edit: February 11, 2017, 05:48:07 PM by historienne »

CowboyAndIndian

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Re: Comparing Coop Apartment to Single Family House
« Reply #1 on: February 12, 2017, 07:10:47 AM »
You need to consider a couple of other things also.

In a co-op, you own a share in the co-op and if the co-op goes bankrupt, you loose your share. How are the financials of the co-op's you are looking at? I would personally prefer a condo (using American terms, not sure where you are located)

A co-op is probably closer to a apartment living. You do not have to worry about external maintenance, or maintenance of gardens, parking lots etc. All that is built into the co-op fees.

So comparing the costs per month. Co-op has $1000/month (taking the largest one). This includes sewage, water, heat and maybe electricity.

Houses tax is approx $500 per month. Add in sewage, water, electricity, gas and you can add another $250/month. This is an approximation assuming your single family house is well insulated. You have to consider future maintenance and I would put aside $200 per month for a possible roof , heating/cooling system, water heater maintenance. What about expenses for garden/lawn services? I would call this a wash, almost the same thing.

If you are comparing based on price, you need to find out approx costs in your neck of the woods.



historienne

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Re: Comparing Coop Apartment to Single Family House
« Reply #2 on: February 13, 2017, 09:47:16 AM »
Thanks!  The coop is in good shape, financially.  It's been around for 90 years and has no underlying mortgage and solid reserves.  It's also a very short walk from a major university, so there's a built in market for buyers.  I think the risk of bankruptcy is small, although obviously not zero.

Condos in the neighborhood are not financially competitive at all - they are priced at the same level as single-families, but then have monthly fees that are almost as high as the coops, but don't include taxes. 

We are in the mid-Atlantic US.