Should you buy into a housing cooperative?

Housing cooperatives, or co-ops, are a unique part of the urban real estate market, particularly in New York. But, how do you know if you'll like living in a co-op?

Here are some basics that you can use to get started:

What's a co-op?

When you "buy into" a housing cooperative, you are essentially buying shares in the corporation that owns the property, rather than buying the property itself. In exchange, you gain the right to use a housing unit in the property -- whatever that may be.

How is a co-op different than a condo?

When you buy a condominium, you buy a single unit in a multi-unit resident, and you obtain a deed to the property in your own name.

How do you buy into a co-op?

Generally speaking (unless you have enough money to simply buy your shares outright), you would take a share loan, not a mortgage.

It's important to research what other expenses you'll have to pay on a monthly basis because your buy-in money only covers your share purchase.

What other costs can you expect?

At a minimum, you can expect to pay monthly utility bills, an insurance premium and a pro-rata share of the costs of the building's maintenance. You may also have to pay a monthly payment toward the co-op's mortgage unless that is already paid in full.

What are some of the benefits of a co-op?

Many people love co-op life because they have very little responsibility for maintaining a property -- at a reasonable cost. The overall monthly expenses for co-op living tend to be low, as a whole.

Should you buy into cooperative housing? The odds are good you need to investigate further and make up your mind after you've carefully examined your options. When you're done, however, make sure that you get experienced legal assistance with all the details.