Do you know about homeowners’ co-ops? They allow you to buy a condo at a lower cost in a building that is based on mutual aid and community.

This type of real estate purchase has its share of advantages, but also some less interesting aspects for some. To find out if buying a condo in a homeowners’ cooperative is for you, read on!

What is it?

The owners’ cooperative is an amalgam of the regular condo building and the housing cooperative. The latter groups together low-cost rental apartments where each tenant must collaborate for the good functioning of the building.

The Confédération québécoise des coopératives d’habitation has launched in the last few years these real estate projects where the operation is the same as the housing cooperatives, but where the residents are owners instead of tenants.

What are the prices of the units?

On average, the condos are 25% less expensive than those found on the market for an equivalent. This reality allows people who would not have the financial means to buy a home to access ownership. For example, if the cost of building the desired condo has been evaluated at $400,000, its selling price will be $300,000. The balance of $100,000 is paid by the Fonds Coop Accès Proprio (FCAP), created by the Confédération québécoise des coopératives d’habitation. This fund was created thanks to the financing of various partners such as the Société d’habitation du Québec (SHQ). In addition to the reduced selling price, the co-ownership fees are also attractive.

Prices that won’t skyrocket

It is difficult to keep up with inflation, but owners’ cooperatives are designed to keep sales prices low. For many, this can be a disadvantage: little variation in value means little profit on resale.

In fact, an owner who sells his unit will receive 40% of the increase in value; the rest will be divided between the co-op and the HEC so that the next buyer can also benefit from a condo at an affordable price.

The obligation to get involved

In addition to the fact of not making big profits as it is usually the case in real estate, another point which can displease many is the obligation to get involved. The condo building becomes an environment of mutual aid and community. For example, it is necessary to share the maintenance of the common spaces and the bureaucratic tasks. This is why, in order to acquire a condo in an owners’ cooperative, you have to apply and go before a committee that will decide your fate.

Are you interested in the experience? Visit the websites of these projects to learn more: Presbytère Saint-Roch (in Quebec City), Havre des Pins (in Sherbrooke), Des Prés in Waterville and Le Petit Quartier in Fleurimont.

Source: moncoindevie.com