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Rhonda Real Estate Tips

Get real advice on Buying & Selling In Brooklyn From A Top Sales Agent

By Rhonda Holt | Agent in 11203

Are Co-ops Good Investments In Today's Market?

First let me say thanks for clicking in to read my blog, it is much appreciated.

Okay let's get down to the nitty gritty of co-ops and whether they make good investments or not. If you're not aware, I specialize in co-op (click here to see my sales in a down market) sales in Brooklyn and I do all my deals from start to finish. This gives me the insight on what co-ops are all about and why buyers should give them a thought over condos and homes.

So let's not waste anymore time and get started with why co-ops may be a good investment for you:


Co-ops are very affordable, especially in today's market where prices have come down with interest rates in the last 40 years. This is the biggest opportunity in decades for those that earn $40,000 to 70,000 and can only be approved for a mortgage beween $150,000 to $275,000. That means, you may not earn enough to be approved for your dream home or condo in Brooklyn, but you can definitely look into buying into a cooperative building. Co-ops are great to use as stepping stones to get you in the real estate game so you can get equity in 3-4 years to move  to that more expensive condo or home.

For Example, the below available large 2 bedroom co-op  in Old Mill Basin is only $197,000, if you earn at least $60,000 with very little debt, credit score of at least 650 and have a 10% down payment then you can buy the below co-op.

Click Here To See More Hot Co-op Deals In Brooklyn, NY

Easy Living
If you're the type of person that works alot, doesn't like to do many home projects and don't have the finances to fix a roof, flood in the basement, fixing the electrical and heating system then you may want to rethink investing into a co-op. You can invest in real estate without all the time and money it takes to care for a home. With a co-op there is a management team in place that has staff the exterior of the property, heating, water and certain issues in the actual unit. With a co-op all you need to do is keep up with what's within the four walls of your unit. So instead of buying a home and going to bed praying every night that nothing else will need fixing when you wake up, you can get a co-op and have easier living.

Now Let's Talk Maintenance Fees
This is the biggest objection I get when it comes to maintenance is that it's too high. But buyers fail to realize all the things that maintenance includes, so your going to get alot of bang for your buck. Let's go through why co-op maintenance is higher than condo common charges.

- Maintenance fees usually includes utilities such as gas, water, heat and some buildings include electricity (but your maintenance may increase in the summer due to air conditioners being used). Unlike a home or condo where you have to pay these items separately. When you buy a co-op you can use unlimited amounts of heat, gas and water. 

- Mainteance includes your property taxes which is much lower than taxes for a condo or home. 

- Maintenance for the co-op is also tax deductible, sometimes up to 55% in Brooklyn.
-Tax Abatement - Many co-op buyers and even shareholders have no idea that they can apply for the STAR PROGRAM and receive a tax abatement on the maintenance. This means you can get a reduced cost on your maintenance that will save you money each money. Get this, there's no income requirement for this program.

***Click here to learn more about the STAR PROGRAM for Cooperative Shareholders In New York State.

- Maintenance increases every few years, not every year like an apartment. I know maintenance increases are scary but they only go up by 5% to 10%. Within the next increase you may have a better job or an increase in pay at your current job. Cooperatives need to charge the market rate for maintenance to keep a reserve in place for updates, repairs, to pay staff, etc. So if you are considering a building that has much lower maintenance than most in the area you should look at the building carefully and look at all the repairs, and if the building needs a complete update. When you pay less you usually get less and if the maintenance is low now watch out for a huge incease when all the work has to be done. 

- Safefy and Care
If you are a single person, single parent or senior then you may want to live in a cooperative with a high percentage of shareholders in a great location where people take pride and care in their surroundings. Also having perks like a doorman, security system, handicap accessible, a management staff available for resolve problems, laundry and storage on-site and amenities (gym, sitting areas, etc.) doesn't hurt either.

- Gain Equity
Co-ops are a form of real estate just like a condo or home, you are just receive stock shares instead of a deed. But with a co-op you can sell anytime on your own or through a real estate company and you earn your equity.

For Example:
If you bought a two bedroom co-op in 2004 for $150,000 in Old Mill Basin, Brooklyn and today you need more space and you need to sell. Your unit has been updated and is in move in condition. Today in 2009, you owe say $130,000 on that two bedroom. In today's markey that co-op should appraise for approximately $215,000. 
Here's the formula:
(In today's market you have a buyer willing to pay $215,000)
($145,000 your mortgage balance owed to the bank + other miscellaneous closing costs) = $70,000 profits in your pocket at closing.

*Note: If we were in a regular market right now, that two bedroom would be selling for approximately $230,000-$240,000, so you would have been walking from the closing table with an even larger check in your pocket.

*Click Here To See Affordable Co-ops In Great Areas In Brooklyn

The fact is, you will run into people that will give you every excuse why you shouldn't buy a co-op, but there is so much misinformation being passed along. You have to seek a professional that sells co-ops regularly and can knows the ins-and outs of the process and how they work. Think about it, there are so much more co-op buildings that have been in existence for years over condo buildings. That tells you that they are in demand for many of the reasons of above and it's a great way for those that are unable to afford a home and condo to invest in real estate.

If you have questions come to the professional to get your questions answered. Simply email me at HelpMeRhonda1919@yahoo.com.

Here are a few of my blog articles you may want to read: 

What Is The Free $8,000 1st Home Buyers Tax Credit?


Thank you for reading my blogs and I want you to share them with your friends and family. If you are ready to buy or know someone else that is serious about buying and selling feel free to email me or give me a call. Keep coming back!

Rhonda Holt
Full Time Top Sales Agent
Specializing In Co-ops and Home Sales
Weichert Realtors, H.P Greenfield
Brooklyn, New York
Cell: 646-725-5941
My Site: www.KandHhomes.com
Email: HelpMeRhonda1919@Yahoo.com
*JOIN ME ON TWITTER.COM AT: http://www.twitter.com/helpmerhonda09
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