A. Condo Vs. Co-Op: What’s The Difference?
Co-ops and condos are the two housing types that are confused the most often with each other. It’s important to understand both types of properties so you know which option is the best fit for you. Let’s take a look at a few of the specific differences between condos and co-ops.
Ownership
When you buy a condo, you receive a deed to the home like you would if you bought a single-family home. However, you only own the interior of your property. The condo association owns the exterior of your condo and also handles maintenance and repairs.
When you buy into a co-op, the property belongs to everyone who lives in the co-op. If you own more shares, you own a larger percentage of the corporation. This also usually means you’re entitled to a larger living space within the co-op. Every shareholder splits the costs of maintenance, taxes, repairs and property management fees.
The Application Process
The application process is a unique part of buying a co-op. You may have to take part in personal interviews with board members before you’re able to buy shares in the co-op. The co-op board might also ask to take a look at your financial documents just like a mortgage lender would. You can’t buy into a co-op until you get approval from the board.
Keep in mind that a co-op can’t reject you for any of the reasons forbidden by the Fair Housing Act. This includes race, gender, religion or membership of any other protected class. However, the co-op can reject you for almost anything else ranging from your attitude toward community rules to the viability of your finances.
You usually don’t need to participate in any kind of interview before you buy a condo. Even if your condo association sets strict rules on how you can use your property, it doesn’t control who moves into any unit in the association.
Market Value
Determining the fair market value of a condo is very similar to determining the market value of a home. The condition of your condo and the values of other residences close to your condo can influence its fair market value. An appraiser can give you an estimate of how much your condo is worth.
There are two main types of co-ops: market rate and limited equity. In a market rate co-op, you can determine your co-op’s value in essentially the same way as a condo or home. An appraiser takes current market conditions into account and determines how much your shares of the co-op are worth. You can sell your co-op for whatever price the market will bear.
In a limited equity co-op, there are limits to how much you can gain in equity from your shares. In some instances, you may also earn $0 in equity due to co-op rules that limit how much you can sell your shares for. These types of co-ops are usually set in place to provide affordable housing below market rates. Make sure you understand the equity rules before you sell a co-op in the future.
B. Application Process
The Application Process: What You Need To Know To Get Started!
Like a job application, an apartment application requires you to attach additional documents. Simply filling out the form with your information and a list of past apartments isn’t enough. Your potential landlord and or property manager needs more information to show whether or not you’ll be a reliable tenant.
While you’re apartment hunting, gather the documents listed below. Some leasing agents will ask for everything, and others will only ask for a couple, so being prepared for any situation is your best bet.
Pay Stubs
Property Managers ask to see your pay stubs, to make sure you’re employed and make as much money as you say you do. So, if you make less than the Income requirement it automatically damages your chances in getting the apartment. Property Managers typically only accept tenants for whom the rental price is 30% or less of their income. So going in, you have to know how much money you make because time after time people come in not knowing how much they make. Then, we do a credit check and they don’t meet the income requirement. As a result, they get declined and it ends up being a waste of time for everyone.
Most of the time, Property Managers will ask for your two most recent pay stubs. If you have direct deposit, you can likely still find your pay stub online, or ask your boss for a copy. If you do get a physical stub with your paycheck, only provide a copy, not the original.
Bank statements
If you don’t have pay stubs, you can show bank statements instead. Both are the way that you show that you actually make money and have the money to pay your rent. Basically, the most important thing in this entire process.
Take in two months’ worth of bank statements, showing how much money you have and how much you get paid. It can help to highlight the lines for your paycheck, to save the property managers time and trouble of having to process everything on a long list of tr
This one should be a no brainer, bring your driver’s license or other identification with you when you tour apartments or when you go to fill out an application. Obviously, this is to prove you are who you say you are.
Some Property Managers are stricter than others about needing this documentation, but having proof of residency with you can’t hurt. If you don’t have a driver’s license, a state ID, passport, or green card, then your birth certificate is the only option.
Recommendations
A recommendation shows that you are a good tenant in a previous apartment community. You don’t usually have to get an actual letter. Most Property Managers will accept basic information about your last apartments, such as the property manager’s contact information, so that they can call. Still, having a letter ahead of time can save them the work.
It’s a good idea to get one of these letters before moving from your current apartment building. A referral letter that you were confident enough to ask for and received, says a lot to a manager. This is a pretty rare thing that people give in with their application, but it makes you look better as a future tennant in the end.
ansactions
Driver’s license, passport, or other proof of residency
This one should be a no brainer, bring your driver’s license or other identification with you when you tour apartments or when you go to fill out an application. Obviously, this is to prove you are who you say you are.
Some Property Managers are stricter than others about needing this documentation, but having proof of residency with you can’t hurt. If you don’t have a driver’s license, a state ID, passport, or green card, then your birth certificate is the only option.
Recommendations
A recommendation shows that you are a good tenant in a previous apartment community. You don’t usually have to get an actual letter. Most Property Managers will accept basic information about your last apartments, such as the property manager’s contact information, so that they can call. Still, having a letter ahead of time can save them the work.
It’s a good idea to get one of these letters before moving from your current apartment building. A referral letter that you were confident enough to ask for and received, says a lot to a manager. This is a pretty rare thing that people give in with their application, but it makes you look better as a future tenant in the end.
Vehicle registration and proof of insurance
If you’re bringing a car with you, the Property Manager needs to know what cars to expect on the property full time.
Some buildings have a limited number of parking spaces per unit, so the Property Manager will want to make sure only the approved vehicles are in the lot. It can also help to tell if a car seems abandoned – they can check with you to make sure you’re just out of town for a while, not leaving your car abandoned taking up a parking spot.
Social Security number
Property managers use your SS number to perform credit and background checks, to help tell if you’ll be a good tenant or bad tenant.
You shouldn’t have to provide a copy of your social security card, unless you didn’t bring any other form of ID, so memorize your number instead.
Job History/Resume
Someone who can hold a job is more likely to be able to pay the rent, no surprise there. Include a resume with your current job and a few previous ones, if you had any. Keep this information on hand so you can reference it when you apply for apartments.
More than just the salary, this shows how stable the money coming in is. If you leave every three months, your income isn’t stable, and doesn’t look good for you as a future tenant. However, If you’ve had a job for five or more years, the 12 months or so you’ll be at this apartment will likely be a financial be a good bet.
Rental history
You’ll need to provide your rental history, listing all apartments you’ve lived in. This should include addresses, the phone number of the property manager, how long you were there, how much you paid, and why you left.
If you’ve rented in several locations, it might be a good idea to go ahead and create a file of this information for yourself, so that you can take it with you when you apply. You can always update it with each move. That way, you can make your application quickly, by copying the information, or simply providing a copy of the document with your application, instead of filling out that section.
References
Most applications have a section for references other than previous Property Managers or Landlords. You should have a mental list of both professional and personal references, in case the Property Manager wants both. Just make sure to ask the people you plan to use as references for their permission, since they’ll be receiving a phone call.
These references can come from businesses where you’ve worked, nonprofits where you’ve volunteered, even your church. Choose established and responsible adults as your references; your 20-year-old college roommate isn’t as reliable in the eyes of a Property Manager as your 40 to 50-year-old boss. Choose wisely, we run into a lot of people who try to give phony references and we always can spot them.
Have all these items on hand when you tour a place in case you want to fill out an apartment application on the spot. It’s better to have it and not need it, than to wish you had everything with you and have to wait to fill out the application. Good Luck!