Home Buying in Edison>Question Details

vina patel, Home Buyer in Edison, NJ

I am between buying a co-op vs renting, Is co-op a good investment, I mean considering huge maintenance fee plus monthly mortgage?

Asked by vina patel, Edison, NJ Fri Apr 5, 2013

my first option was renting apts in edison which starts from $1100 for 1BD. However, I saw listing of margate apts which are at good location in Edison, NJ. I am planning to stay at the location (rental or co-op) for at least 1 year. After 1 year or so, I plan to rent it out. I am completly new to home buying, infact it wasnt even my option.

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5
If you're in , say, Manhattan, then buying a co-op is common and usual - as many/most of the apartments there are co-ops.

That's not the case in NJ.

In NJ, Edison and other towns, condominiums is the more common form of ownership (after single family homes), so co-ops may not be as desirable, especially when you try to sell down the road.

Make sure you understand any co-op board restrictions (especially when it comes to renting it out).
Do you understand the differences between co-ops and condos?

With a co-op you do not "own" your unit - you own a percentage of the total building or community.
With a condominium, you are deeded the unit - you "own" it - so it's yours and you can renovate or sell without "board" approval.

Please make sure you understand the differences involved before proceeding.

I think you really need to sit down with an agent who can explain the pros and cons of your options.
I think you also need to explore your idea of living in the unit for 1 year then renting it out........truthfully, depending on your financial situation, you might be better renting for the year..............more information would be needed to really advise you.


Best wishes.......
2 votes Thank Flag Link Fri Apr 5, 2013
"considering huge maintenance fee plus monthly mortgage"

You answered your own question right here. Not sounding like a good "investment". There are plenty of condos that are very good investments right now that are more solid speculation than a co-op, the fee's, the board... all those things.

Continue your due diligence and see what is available to you n the condo market.
If interested, give a call or send me an email. As an expert in this market and my history of helping my clietns make sound pruchases, I can help you find the right property for you!

John Sacktig
Broker/Manager
Orange Key Realty
Direct: 732-213-1409
jsacktig@orangekeyrealty.com
0 votes Thank Flag Link Fri Apr 5, 2013
Hi VNP,

I'm well on-board with buying over renting. The question is: Is this a good fit for you?
You'll need to forecast your personal financial situation now and in a year's time. Will the co-op rental income provide you with a positive cash flow (i.e. income) sufficient to offset the co-op mortgage (in case you wish to finance the purchase of another property later)? Will you be staying in the area to manage the property and just as importantly, can you see yourself as a landlord? I suggest you start this conversation with a Certified Public Account or financial planner to determine if real estate investment is a best fit your situation. If the answer is yes, then you can reach out to me, I have helped investors buy real estate (including co-ops) for rental income. My other speciality is first time homebuyers.

Ana
The O&A Home Team
http://www.njhomeseeker.com/pfrt-seminar-series.aspx
0 votes Thank Flag Link Fri Apr 5, 2013
The Coop in Edison is the lowest price of investment that one can make for a first home. You cannot buy a Coop for an Investment because you have to live it in for a full year as a resident before it becomes eligible for rental and then you will face a long line of owners who want to rent and you will have to get in line. The reason is that only a percentage of owners can rent their properties. The two bedroom homes are better investments than the one because there are fewer of them and always many less available for sale.

Margate coops are very popular and it is a good option for a home-owner, less so as a Landlord since you will still have to pay the maintenance fee and the net of your rental is low. You can purchase older condos (apartment conversions) from about $150,000 up in Edison, but the average 2 bedroom and 2 bath condo sells for just over $200,000 and is very easy to sell and to rent.

I have a great deal of experience in this market.

Kate Reilly Lund, CRS
732-319-0027
Re/Max Diamond Realtors

http://www.kreillylund.remax-nj.com
0 votes Thank Flag Link Fri Apr 5, 2013
Hello VNP,

Buying a Co-op is not a bad idea. However, you should understand pros and cons of a Co-op. Obviously monthly maintenance is slightly higher but you have to see what it really includes.
For any further questions, feel free to contact me any time at my cell# 732-277-9321. I can provide you with better solutions on home buying.

Vishal.
0 votes Thank Flag Link Fri Apr 5, 2013
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