The Cost of Owning a Co-op or Condo in NYC. Breaking Down Monthly Payments
When deciding between a co-op and a condo, it’s important to consider not just the purchase price but the long-term monthly costs.
When buying a co-op or condo in New York City, it's essential to understand the full picture of monthly costs—not just the purchase price. While property values and neighborhood trends are crucial, your ongoing monthly expenses—such as maintenance fees for co-ops or common charges for condos, along with mortgage payments—will determine the true affordability of your investment. This guide breaks down these costs to help you better understand what to expect and how to budget for your new home in NYC.
1. Monthly Costs for Condos
When purchasing a condo, there are three primary components to your monthly costs:
Mortgage Payments: Your mortgage payment will depend on the loan size, interest rate, and loan term. This typically represents the largest part of your monthly budget.
Common Charges: These cover the cost of maintaining shared spaces and amenities like lobbies, gyms, elevators, and gardens. Common charges vary depending on the building’s size, amenities, and staffing needs. They do not include property taxes.
Property Taxes: Unlike co-ops, condo owners are responsible for paying property taxes separately. These are calculated based on the assessed value of your unit and can vary by building location and possibly tax abatements.
2. Monthly Costs for Co-ops
For co-op owners, the breakdown of monthly costs looks a little different:
Mortgage Payments: Co-op buyers typically take out a loan (often called a share loan) just like with a condo purchase. Your monthly mortgage payment will depend on the same factors: loan size, interest rate, and loan term.
Maintenance Fees: These fees cover the building’s operational expenses, staff salaries, utilities, and maintenance costs, but crucially, they also include property taxes. This makes co-op maintenance fees higher than condo common charges because taxes are embedded in the fee. It is worth noting that older co-op buildings with more infrastructure upkeep needs often have higher maintenance fees.
3. Understanding the Trade-offs: Co-ops vs. Condos
When comparing co-ops and condos, many buyers focus on the monthly fees without realizing that co-op maintenance fees include property taxes, whereas condo owners pay property taxes separately. This can make it difficult to directly compare costs.
Co-op Monthly Costs: Higher maintenance fees that include taxes and other building expenses.
Condo Monthly Costs: Lower common charges, but separate property tax payments that increase your total monthly outlay.
4. What About That Down Payment?
Down payments are one of the most significant upfront costs when purchasing a property in New York City, and the requirements differ significantly between co-ops and condos.
For co-ops, down payment requirements are typically more stringent. Most NYC co-ops require buyers to put down at least 20%, with many buildings demanding 25% or more. In some cases, luxury co-ops or those in highly desirable neighborhoods may require down payments as high as 30% or 50%. This higher threshold reflects the co-op board’s emphasis on financial stability, as they want to ensure that shareholders can meet their monthly maintenance obligations.
In contrast, condos generally offer more flexibility when it comes to down payments. While 20% is common, buyers can often put down as little as 10%, especially with certain loan programs or for first-time buyers. This lower down payment option makes condos more accessible for buyers who may not have large upfront savings.
It’s important to remember that while a lower down payment reduces your initial cash outlay, it increases your total monthly mortgage payments. The smaller the down payment, the larger the loan amount you’ll need to finance, which leads to higher monthly mortgage payments over the life of the loan. So while a condo may seem more accessible upfront, it’s essential to consider the long-term impact on your monthly budget when evaluating both co-ops and condos.
5. Comparing Monthly Costs: Co-op vs. Condo with a 25% Downpayment
When buying a co-op or condo in New York City, it’s essential to understand the full picture of monthly costs—not just the purchase price. While property values and neighborhood trends are crucial, your ongoing monthly expenses—such as maintenance fees for co-ops or common charges for condos, along with mortgage payments—will determine the true affordability of your investment.
Below, are two properties—one co-op and one condo—priced similarly but with varying monthly expenses: 200 East 36th Street #19A (Co-op in Murray Hill), and 500 West 43rd Street #11F (Condo in Hell’s Kitchen).
I’ve intentionally selected two similar properties with comparable financials to demonstrate how to run these numbers effectively. This approach can and should be applied to any property comparison, as actual monthly costs can vary significantly. For example, while the co-op in this example has relatively reasonable maintenance fees, it’s not uncommon for maintenance fees to run higher or lower. Similarly, condo common charges can easily range higher or lower, depending on the building’s amenities and staffing.
The contrast in monthly payments is critical when considering the monthly financial impact over time. This guide emphasizes the importance of evaluating all financial components to ensure your monthly costs align with your budget and goals. Both buyers and agents should run these numbers to make informed decisions and find the right fit for their needs.
200 East 36th Street #19A (Co-op in Murray Hill)
Listing Price: $845,000
Down Payment: 20% ($169,000)
Mortgage Amount: $676,000
Mortgage Payment: Approximately $3,380 (assuming a 6% interest rate over 30 years)
Maintenance Fee: $2,180
Total Monthly Payment: Approximately $5,560
500 West 43rd Street #11F (Condo in Hell’s Kitchen)
Listing Price: $850,000
Down Payment: 20% ($170,000)
Mortgage Amount: $680,000
Mortgage Payment: Approximately $3,400 (assuming a 6% interest rate over 30 years)
Common Charges: $934
Monthly Taxes: $880
Total Monthly Payment: Approximately $5,214
In this example, the co-op’s higher maintenance fees make the total monthly payment $346 higher than the condo, despite the co-op’s slightly lower purchase price. While condos tend to have lower monthly fees, buyers should be aware of the additional property tax payments they’ll be responsible for. In contrast, co-ops roll property taxes into the maintenance fee, creating a higher upfront monthly cost but simplifying the payment structure.
6. Be Mindful of High Co-op Maintenance Fees
When deciding between a co-op and a condo, it’s important to consider not just the purchase price but the long-term monthly costs. While a lower purchase price may initially seem attractive, the monthly expenses can tell a much different story. In the examples above, the co-op and condo have similar total monthly costs, but this isn’t always the case.
7. Comparing Co-op vs Condo Costs: What’s Really More Affordable?
Co-ops are generally more affordable than condos in terms of purchase price. Buyers often find they get more space or a better location for their budget in a co-op. However, this lower price comes with trade-offs. Co-ops typically have higher monthly maintenance fees, covering building expenses such as utilities, staff salaries, property taxes, and possibly the building’s underlying mortgage. Condos, while pricier upfront, tend to have lower monthly fees—known as common charges—but condo owners must pay property taxes separately, leading to additional ongoing costs. For long-term affordability, calculating the total monthly cost—including mortgage payments, maintenance fees, common charges, and taxes—is crucial.
8. The Role of Your Real Estate Agent
For buyers focused on long-term affordability, calculating the total monthly cost—including mortgage payments, maintenance fees (for co-ops), or common charges and property taxes (for condos)—is crucial. Understanding these expenses is key to making an informed decision.
As a real estate agent, I provide my clients with comprehensive property listing portfolios in a one-page spreadsheet that includes all the relevant financial data. In many cases, my clients begin by defining their desired total monthly payment, in addition to the purchase price. This approach helps provide a fuller financial picture beyond just the sale price. I start by calculating total monthly costs and work backward to identify listings that meet my clients' financial criteria at their desired price point. I also provide different down payment scenarios, enabling clients to see how adjusting the down payment affects their overall monthly payments.
This detailed approach has consistently proven informative and useful, helping buyers make well-informed decisions when choosing between a co-op and a condo in New York City.
If you're considering buying a co-op or condo in NYC and need help understanding the total monthly costs or exploring different down payment scenarios, feel free to reach out. I’ll provide the financial clarity you need to make a well-informed decision and find the property that fits both your budget and lifestyle.