Financially speaking, owning a home within a housing cooperative makes a lot of sense. There are exclusive benefits afforded to co-op members that single-family homeowners and renters do not enjoy. Maintenance fees are nominal, overhead is very low and the tax burden is almost non-existent, plus regular capital improvements are done to maintain the property without spending an extra dime! Let's explore.

MAINTENANCE

A major benefit is the almost maintenance-free lifestyle. Many first time home buyers are concerned, rightfully so, that they will not have the money to fix things as they need fixing. For a new couple starting out, this could be the difference between actually purchasing their first home and choosing to rent yet another year. Co-op members don't have to make that choice!

A member of Cedarwood Cooperative has the piece of mind that if any major problems arise, they have a skilled team of maintenance men at their fingertips to assist in taking care of the problem. In addition, other than the very few minor charges a member might incur, these problems are taken care of free-of-charge. *sigh of relief*

OWNERSHIP

Purchasing a membership grants the member the equity rights to one unit or "home". Once that home has been paid in full, that member no longer has to pay a mortgage, saving money every month. In addition, each member retains the equity rights of their home for the life of the membership. Therefore, when that member decides to move, they sell the home, putting money in their pocket.

Renting an apartment, on the other hand, is quite the opposite. Not only do you not own the property you are living in, you are also paying to build someone else's equity. You are required to pay rent every month in order to stay living in the apartment. In addition, the owner can increase the rent at the end of your lease, creating a financial burden you may not have been prepared for.

MOVE-IN COSTS

Let's face it, moving itself can be expensive. You need boxes and movers and a truck and deposits and...

Thankfully, new members purchasing their co-op home pay a $30 application fee, a nominal one-time membership fee, plus their first month's carrying fees ($400-$512 depending on unit size). That's it! Getting into a new home has never been so inexpensive!

With renting, a prospective tenant has to pay an application fee, typically a large security deposit, sometimes a pet deposit, a pet registration fee, as well as their first month's rent. This can be a huge financial burden that takes months to recoup from.

MONTHLY COSTS

Members of Cedarwood Cooperative pay what is referred to as "carrying charges". This is a monthly fee which is their proportionate share of the operating costs based on the non-profit operations of the entire entity. The monthly carrying charges range from only $400-512. These charges essentially pay for regular capital improvements, maintenance, grounds-keeping and so much more. For such a nominal fee, the financial gains are immense.

Single family home-owners are on the hook for every expense that arises. This includes the monthly mortgage payment, housing insurance, property taxes, possibly private mortgage insurance and more. Financially, owning your own home can be more of a liability than an asset.

TAX BENEFITS

Each Cedarwood Coop membership includes an equivalent share of the property taxes and mortgage interest (if any) and are included in the monthly carrying charges. This saves our members from surprise tax bills at the end of the year. In addition, these amounts are deductible on our member's personal income tax returns leading to more money saved.

Renters of course receive no tax benefit from renting; their landlord does.

Single-family home owners are able to deduct their property taxes on their personal income taxes. However, one must consider the heavy cost of paying those property taxes on top of mortgage, interest and insurance payments.

As you can see, it makes perfect financial sense to become a member of a housing cooperative. The overhead fees are less, the maintenance expenses are nominal, and there are no surprise tax burdens lurking around the corner. If you're ready to get started, call the office today at 708-747-3833 to discuss your options.