What’s the difference from a Boston Beacon Hill condo versus Beacon Hill co-op? In a Boston condominium, a purchaser owns the unit plus a percentage of the common areas of the building. The purchaser takes title by deed, which is recorded in the county clerk’s office. If you intend to obtain a loan to purchase the Boston condominium, you will sign a mortgage, which will be recorded in the county clerk’s office. In a condominium there is an association that you belong to once you purchase the property. The association provides services such as general maintenance to the common areas in exchange for a monthly condo fee. Because it is real property you will pay your property taxes separately or inclusive with your mortgage payments. Generally your lender will assist you in this area. Because a Boston condo is real property the closing costs are higher than those of co-ops. Whether you own a co-op, or a condo, you may have to pay assessments for any major repairs or renovations.
Pros for buying a Beacon Hill condo
Easier approval process
Own actual real estate giving you more rights to it, i.e. you can transfer deed to family members
More control over building maintenance and development issues
Lower monthly common charges
Cons for buying a Beacon Hill condo
Typically higher purchasing price on per sq. ft. basis
More legal responsibilities for the entire living facility
Boston Co-ops and Boston condos may seem similar at first glance, but there are some fundamental differences. A cooperative–or co-op association–is a legal corporation made up of shareholders that owns a residential building. Membership in the corporation is granted when you purchase a share in the cooperative by buying a unit. Rather than owning your unit the way you would a Boston condominium, you are, in a way, becoming a tenant. Property taxes are included in monthly fees, a portion of which are tax-deductible. Members screen and select new residents via their elected representatives (the co-op board). You may be familiar with many of the better-known differences between Boston condos and co-ops: The building’s approval process, financial requirements and rules are usually more stringent in a co-op, but co-ops generally cost less to purchase.
Pros buying a Beacon Hill Co-op
Co-ops are usually cheaper to purchase than condos.
Co-ops have slightly lower closing costs; title insurance isn’t needed and and there is no mortgage recording tax.
A thorough vetting process and stricter financial requirements mean more financial stability, especially in market downturns.
The vetting process and restrictions mean more owner-occupied units and less turnover, which can prevent problems like a revolving cast of renters, illegal Airbnb use and other potential disruptions.
A portion of monthly maintenance fees are tax deductible
Cons buying a Beacon Hill Co-op
The approval process and building rules are usually stricter in a co-op, and potential buyers can be rejected without having to provide a reason; condo boards can’t legally reject potential buyers.
Co-ops generally require buyers to make a down payment of at least 20 percent of the purchase price, sometimes as much as 50 percent or more; some exclusive buildings don’t allow financing at all. Co-ops also have liquid asset requirements and may ask buyers to meet a debt-to-income ratio and have an excellent credit score.
Stricter financial requirements mean you’ll be asked to share more personal financial information.
Limits on subletting, purchasing for others and pieds-a-terre mean co-ops are not a good choice for investment buyers who don’t plan to live in the building or who are looking for short term ownership.
Monthly maintenance fees are generally higher for co-ops than for condos, as a share of the property tax and possibly payment toward an underlying mortgage are included.
Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs
In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.
For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.
Charles River Park
Surrounding Communities of Boston Contact John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.
John Ford Ford Realty Inc 137 Charles Street Boston, Ma 02114