Leasing Co-Ops versus Apartments in NYC

If you're looking to rent a place in NYC, you probably already know you're in for an uphill battle. Post-pandemic, demand for everything from basic studios to luxury penthouses has soared across the city, prompting skyrocketing rental prices and dwindling inventories. Like many people, you may be struggling to secure a unit in a regular apartment building. What about renting a place in a co-op building instead?

New York's rental market is overwhelmingly complex and incredibly diverse. Unlike many other areas, you aren't limited to renting apartments in traditional buildings or complexes. By considering co-ops as well, you'll cast a wider net, increasing the odds of finding the perfect thing as quickly as possible.

There are many advantages to renting a unit in a co-op instead of a regular building, but there are considerable drawbacks too. BCP Real Estate Group can help you explore these options, making it easier to secure the perfect rental home. For now, read on to get up to speed on the differences between leasing a co-op versus leasing an apartment in NYC.

Flexibility is Key When Renting in NYC

Renting a home in New York City has never been easy. These days, it often feels downright impossible.

It wasn't easy to find vacancies in specific neighborhoods in years past. Today, nearly every part of the city is experiencing unprecedented demand. The days of assuming there will be plenty of rental units to choose from are long gone.

With these points in mind, it pays to be flexible when seeking a place to lease in NYC. By considering co-ops as well as regular apartments, you could secure something a lot nicer than you otherwise would.

What is a Co-Op?

Before delving into the differences between renting an apartment and renting a co-op, it helps to understand what a co-op is.

Large real estate companies typically own regular apartment buildings and complexes. People who own units in co-op buildings actually own shares in a corporation that provides them with proprietary leases of those units. Therefore, if you rent a co-op apartment, you're subletting it from the co-op shareholder holding the lease.

Renting Apartments vs. Renting Co-Ops in NYC – Key Differences to Keep in Mind

Before adding co-op rentals to your list of possibilities, get up to speed on the primary differences between them and units in regular apartment buildings. Here are some crucial considerations to keep in mind:

• Lease Renewals – When renting an apartment in a normal development, you can usually count on being able to renew your lease year after year. However, when renting in a co-op, you will probably only be able to stay for a year or two. Co-ops usually have strict rules about how long units can be subleased, so be sure to ask the owner before proceeding – especially if you want to stay put for a while.
• Fees – Like renting a regular apartment, you'll likely pay brokerage commissions, security deposit, first and last month's rent and other fees to secure a unit in a co-op. Many co-ops charge additional maintenance fees to owners who sublet units, which are usually passed along to the tenant. Most of the time, they're rolled into the cost of the monthly rent. However, if things change – and they can and will – fees can suddenly increase.
• Approval Process – If you've rented an apartment in a traditional complex, you're familiar with the application and approval process. It's rigorous in general, but the process for subletting a unit in a co-op is even more arduous. In addition to the regular application, credit check and background check, you will have to go through an intense vetting process by the co-op board – a group of owners elected to manage the building. They typically check applicants' social media presences too, so clean yours up first if there are any issues. Boards also usually interview candidates, so be prepared for that. Ultimately, they can reject someone for any reason, and they don't have to tell you why they rejected you.
• Management – When renting in a regular NYC apartment building, you may struggle to get maintenance when needed because such properties are often owned by massive management firms that cannot respond quickly. Co-ops almost always have live-in supers, though, so you will have a more personal, one-on-one relationship with people who can help. Likewise, if you encounter any problems, you can always reach out to the person who owns the unit you are subletting for assistance.
• Rules – All rental properties have rules and regulations. You already know about them if you've ever rented in a regular building. However, co-ops are unique entities with their own rules, so it's crucial to educate yourself about a building's rules before trying to lease a unit. Rules typically revolve around pets, noise, guests and subletting. Since tenants have ownership stakes in the building, they tend to watch others closely, especially subletters.
• Community – Although many nicer apartment properties try to create a sense of community with amenities like lounges and rooftop decks, the reality is they are so large and impersonal that most occupants barely know each other. On the other hand, co-ops are made up of people who own shares in the same entity. They all want the building to remain in good shape, and they work together to make that happen. Therefore, if you like having a more personal experience, renting a co-op may be a good option.
• "Personality" – You can find quirky boutique apartment complexes across New York City, but they usually charge the highest rents. Otherwise, most apartment buildings are relatively bland. Co-op buildings, on the other hand, tend to have unique personalities. Some have artsy vibes and attract creative types; others are filled with young families or primarily made up of young, socially conscious people. When considering a co-op, then, make sure its personality suits your living preferences.
• Value – Unless you're in the market for a high-end luxury apartment, the regular apartment buildings you consider will mostly have basic, run-of-the-mill finishes, architecture and overall craftsmanship. Since tenants collectively own co-ops, such properties tend to have superior designs, better finishes and more elegant touches. Therefore, you may get more value out of renting a co-op instead of an apartment. Units in co-ops also tend to have more unique features, which is a nice change of pace from the cookie-cutter units in traditional buildings.
• Pets – When shopping for apartments in traditional rental buildings, it's pretty easy to figure out if various properties allow pets or not. Large complexes typically have cut-and-dry pet policies, making it easy to weed out places that don't suit your needs. However, renting in a co-op can be more challenging if you have furry friends. Each co-op has its own set of rules regarding pets. Some don't allow them at all; others have restrictions regarding how many you can have, breed and size. You may even have to bring your pet before the board when applying to sublet a unit in a co-op, so be prepared for that.
• Maintenance – Generally speaking, co-op buildings in New York tend to be more well maintained than regular apartment properties. Since the board has a financial duty to the building's shareholders, it tends to stay on top of maintenance issues, ensuring that various systems and components are kept in tip-top shape. As a result, you're less likely to end up in a building where issues linger for months on end. The overall environment of a co-op is more likely to be pleasant and inviting, giving you nicer surroundings.
• "Class System" – Another thing to be aware of when renting a unit in a co-op is that shareholders in the building may look down on subletters in general. Those who own units in co-ops tend to be wary of renters, assuming that they don't care about the property and are more likely to cause problems. Although you will likely be treated fine by most people you encounter, be prepared for a bit of an attitude from certain people in the building. Of course, in a regular apartment complex, you don't have to worry about this issue so much.
• Option to Buy – If you rent an apartment in a regular building, you can probably keep renewing your lease in perpetuity. Your rent will go up every year, of course, but you will be able to stay put if you want to – and can afford to. When subletting a unit in a co-op, on the other hand, you may get lucky and end up having the opportunity to buy the place outright. Sometimes, co-op owners start by subletting their units after they no longer need them. Eventually, many decide to sell – and selling to an existing tenant who is already accepted by the board makes sense. Although there are no guarantees – you could be made to leave within two years – there is a chance that you could get your foot in the door of a great place that you can eventually own.

What About Renting Condos in NYC?

Considering co-ops is a smart move to cast the widest net when seeking an apartment in New York. Many condos are put up for lease across the city too; should you consider them also?

In reality, renting a condo is a lot like renting a co-op. Typically, the condo itself is owned by a private individual who then leases it to a tenant. Most condos have boards that make major decisions for the property, including who to allow to live there.

Generally speaking, renting in a condo building and renting in a co-op is virtually the same. When renting a condo, there are no guarantees about being able to renew your lease from year to year. If the owner decides to move back in or sell, you'll have to move out. There's far less risk of that happening when renting in a regular apartment building.

Ultimately, if you decide you're okay with renting in a co-op, you should also broaden your search to include condos for rent. In today's highly competitive rental market, it pays to be open to as many opportunities as possible, and renting a unit in a condo building can work out nicely.

BCP Real Estate Group Can Help

If you're in the market to rent a place in NYC, you probably feel pretty overwhelmed. Choosing from options like traditional apartment buildings, luxury apartment buildings, co-op buildings and condo buildings can be challenging. Zeroing in on options that suit your needs can seem nearly impossible.

Given the complexities of NYC's rental market, it pays to have proven experts by your side during your search. To that end, you can't go wrong by connecting with BCP Real Estate Group. We have connections with skilled real estate brokers and agents across the city, from Harlem to Park Slope to the Lower East Side. Whether you're looking in Brooklyn, Manhattan, Queens, the Bronx or Staten Island, our team can help you secure the perfect New York rental.

You can check current availability for rental properties that suit your needs by signing up for access to our vast online database of searchable NYC rental listings. You can choose from units in huge buildings, walk-ups, luxury properties, co-ops, condo buildings and more. In no time, you will have a list of options to explore.

More importantly, BCP Real Estate Group can connect you with experienced and talented real estate brokers and agents across all NYC boroughs and neighborhoods. Whether you're looking for a unit in an apartment building, co-op, condo or elsewhere, your broker or agent will know the area well and can direct you toward options that meet your needs.

As overwhelming as it may be to find an apartment in New York City these days, you're not alone. Right this second, the perfect unit awaits you in a co-op, apartment building, condo building or other property. Let BCP Real Estate Group help you locate a terrific new home in the most exciting city in the world. For more information, give us a call today.