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What are the advantages and disadvantages of co-ops?

Co-op housing is not for everyone, but it can offer several advantages over renting or private home ownership. Co-ops can be appealing alternatives to living in a house, condo, or apartment. For all their positive points, they can also have downsides.

Ultimately, it is up to you to decide whether co-op housing is the right fit for your lifestyle and needs. When you are choosing whether to live in a housing cooperative, keep in mind these important points as you make your selection.

Advantages

First, let’s take a look at the advantages to co-op housing. These include:

  • Affordability

In co-op housing, buyers purchase shares of a cooperatively owned building. This can be much more affordable than purchasing a home or renting an apartment.

  • Less maintenance

A co-op can also be a great option for people who want a say in how their property is run, but do not want the high maintenance required in owning a home. Co-op owners are responsible for maintaining their own units, but do not have to do any yard work, repairs, or other maintenance for the building.

  • Community

Most people who rent apartments do not stay in their building long-term. People do tend to stay long-term in co-ops, however. This means that your neighbors could also be lifelong friends.

Disadvantages

It’s also important to consider the downsides to co-op living:

  • Ongoing fees

Co-op owners must pay not only for their shares, but a recurring maintenance fee. These can add up quickly, particularly if the unit is expensive. Overall this can still be less expensive than renting or home ownership, but some people consider it excessive.

  • Restrictions

Cooperatives can also come with restrictions for residents. Some co-ops have strict by-laws regarding what their occupants can and can’t do with their unit. The co-op’s board of directors has significant influence over decision-making.

  • Less equity

Because of these restrictions, there are frequently fewer people who are interested in co-ops to begin with. That means that a unit preserves equity, but value does not rise as much as it would for a private home.

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