Townhomes, Condos, Cooperatives, and Timeshares: What Is the Difference?
It is likely that you have heard of one of the following building types: condos, co-ops, townhomes, or timeshares. However, perhaps you haven’t personally dealt with the process of leasing or purchasing one of these properties. Each one has its own requirements when it comes to securing a deal, and some are more difficult to obtain ownership of than others. If you are considering investing in one of the aforementioned properties, continue reading for information on each property type.
Cooperative Buildings (Co-Ops)
Cooperatives are unique in that buyers are essentially purchasing shares of a corporation. In a co-op you will still have the right to dwell in the property via a proprietary lease, the distinction is that you are investing in the property as opposed to being an owner. As a shareholder, you will need to assist in covering the costs of the entire cooperative building such as real estate tax and salaries of staff members. Cooperatives are generally quite strict when it comes to who they will allow in. There is a board of members whose job it is to review each potential shareholder and decide if they are a good fit. If you are interested in investing in a co-op, you will need to appear before these board members for a formal interview.
Much different from a cooperative, purchasing a condo means that you own the property outright. Condominiums do have monthly costs just like co-ops do, but they will still be much less expensive for you. Many buyers opt to purchase condos because of these lower costs; however, this type of property is not as easy to find on the market as other property types. If you are looking for a condo, you will need to be patient, diligent, and learn how to snag a good deal quickly.
When it comes to buying a townhome, not only will you own the property outright, but you will also own the land that the property has been built on. As an owner, you would be responsible for the mortgage, real estate taxes, and any required maintenance and general upkeep. There will not be any extra fees on top of those. While you would have more flexibility with your property, if you wanted to renovate, for example, you still need to make sure you are adhering to your local zoning regulations.
A timeshare is essentially a vacation property agreement in which you can split the cost with people of your choosing so that you can reserve a time slot for yourselves on said property. A downside is that you and others who are sharing the cost with you will be responsible for fees associated with maintenance or incidentals, which can get pricey. There are different types of timeshare ownership such as a fixed week option and a floating week option. The fixed week option allows you to pick which week out of the year that you wish to go on vacation. Since this option is fixed, you will not be able to change the week once you select it. However, sometimes the change can be made with the condition that you pay a fee. The fixed week option is great for those who know for sure that they will be able to take the same week off of work to get away each year. If your work or personal schedule is unpredictable, the timeshare might go to waste. The floating week option means that you can still pick a week out of the year but there will be restrictions. For example, you might be able to select any week between March 5 and June 9 but not the week before or after a major holiday. Your reservation will always have to be booked during a certain time to avoid missing your vacation window. If you fail to do this early, you might end up with a week where the weather is not ideal or with no week at all. There are all sorts of building types that you can invest in, and the one you select depends on what your goals and budget are for the property. If you are considering purchasing one of these properties outright or buying shares, be sure to do thorough research to make sure it is the right choice for you.