Townhouse or Condo/Coop?

The other day someone contacted me and said they were thinking of getting either a townhouse (in Harlem) or a coop or condo. Of course my suggestion was to get a townhouse. Here’s a bit of what of I said to him…

The differences between townhouses and coops/condos is night and day. We were in a pretty easy going coop and over time things just got worse and worse. After 12 years we got incredibly tired of all the politics and silly decisions by the super, the president, and the board in general. For example we had a major fight with our super over why we hadn’t filed an alteration agreement when we had a workman in to fix a broken hinge on our kitchen cabinets. It was more complicated to fix than you might imagine, but it was a hinge – and the super thought we needed a $500 deposit and proof of $2 million in insurance. That’s what it means to live in a condo or coop. We never have to worry that sort of thing ever again.

On the other hand, if something breaks, in the townhouse it’ll be our responsibility to fix it. We’re basically going to have new construction, so it’s not a big deal, but if we had a townhouse that was “livable” things would be older and there would be a fair amount of maintenance required. We also have to keep the sidewalk clean, shovel the snow, etc. or get a constant barrage of $100 ECB tickets. In fact, on our first day of ownership we already had a ticket from earlier that morning. But 3 different people approached us willing to be the super/porter for our building and keep things clean – so those particular tasks are easy to offload with a little money.

The other big advantage of townhouses is the rental income. Currently, every $1,000/month of rental income covers roughly $200,000 in mortgage. If you time things so your mortgage is paid off when you hit retirement you’ll live rent free and have thousands in rental income that will more than cover any building maintenance and taxes. It’s the affordable way to stay in Manhattan when you retire. Now compare that to a coop/condo where you never stop paying maintenance fees – and the maintenance fees just keep going up and up…

Clearly, I’d go for a townhouse, but I’m biased. The trick is finding one with the right location and price. There are many more choices when it comes to condos and coops.

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