Should I consider renting a condo or co-op unit instead of an apartment in a rental building?
There are certainly advantages and disadvantages to renting a condo, co-op or in a rental building. It may depend on personal preference and flexibility with certain items to determine which option is right for you. Renting a condo or co-op is a viable option (considered a “sublet” requiring a sublease), but it’s important to know the differences between them and a rental building.
Rental Buildings
Renting in a rental building is the most common situation of the three options and generally involves an easier/faster application process and lower fees than condos and co-ops. However, you may be able to find better deals in certain condo and co-op rentals as an individual owner may potentially be more prone to negotiation in order to rent out their unit. In addition, rental buildings usually offer the same finishes in every apartment, whereas condos and co-ops may have been renovated by their owners to feature higher-end finishes and fixtures.
Condo Rentals
Condo rentals offer renters a nice option to rent directly from an owner and may not require board approval or a strict approval process (Note: these situations can vary), since condo rules tend to be more flexible with sublets than most co-ops. Condo apartments can provide additional amenities and higher-quality furnishings than in many rental buildings, and it’s possible to find a better value by dealing directly with a condo owner, especially if their unit has been on the market for rent for an extended period of time.
On the negative side, condos can require high application and move-in/out fees totaling several hundred dollars to over one thousand dollars. However, it’s possible to negotiate with the owner and submit an offer that requires such owner to cover a portion or all of these fees. In addition, if you are working with a real estate agent and rent a condo unit, there’s a good chance the owner is represented by another agent, resulting in a co-broke (two brokers) transaction, which may require a 15% broker fee, since two agents must split the fee. Furthermore, if board approval is required for a sublet, the process could take several weeks or longer, so make sure to leave ample time before your expected move-in date.
Co-op Rentals
Co-op rentals share similar characteristics with condos described above (positives and negatives), but generally possess stricter board approval guidelines and may even require an interview, minimum lease duration (e.g. 2 years) and restrictions on pets. As a result, the approval process can take an extended period of time and involve more work to compose the application package (Note: however, a number of co-ops do not require board approval and have more lenient policies).
Note: All buildings are different and have distinct policies, so check with your agent or the applicable mgmt co / landlord for each situation, as rental buildings, condos and co-ops can vary significantly.
