Condominiums are also apartment-style residences but in a condo building, the individual unit is owned by the purchaser. Condos are increasingly popular, especially among newly constructed properties because ownership is more straightforward. Condos generally cost slightly more than co-ops, but they do not require the close review of personal financial information and units may be leased by the owner to others, making them a better choice as an investment property. Condo buildings may also require smaller down payments than co-ops (frequently 10%) and therefore a down payment in these buildings is generally driven more by a bank’s mortgage requirements than the condo’s board policy itself.
Like co-ops, there are application fees and an approval process which includes a credit check and other requirements of the condo unit owner. The approval process may take up to one month. Condo owners receive a deed to the property, just as they would to a free-standing home and they must pay property taxes on their individual unit. Owners must also pay a monthly common charge fee to cover the care and upkeep of the common areas, the outside of the building, the staff and other shared expenses. Major repairs are charged to the condo owners in the form of special assessments, as needed. Condo maintenance fees are generally lower than co-op fees because residents are not paying for a share of the building’s underlying mortgage. Real Estate charges are paid by the condo owner separately.