They're hard to get into and hard to unload

Some reasons not to buy a co-op in NJ:

- When you buy a co-op, you do not own your property (i.e. fee simple). You end up owning shares (like stock) of the co-op association and have a proprietary lease to your unit.

- Co-ops are popular in NYC but outside of NYC, they are not common and most people avoid them.

- People get attracted to them due to the low purchase price, but if you look at the maintenance, it is pretty high.

- You generally cannot rent out your place freely like condos/houses. If you are able to, these are considered subleases, you may only be able to sublease it out for a specified period of time (i.e. 2yrs) during your ownership. Some co-ops require you to pay a monthly fee during the sublease period.

- Trying to renovate your unit can be a nightmare as you need to get co-op board approval as well as make sure your contractors are properly insured to work in co-ops (each co-op has their own, sometimes onerous requirements.

- Most co-ops have an underlying mortgage that all shareholders must pay (in addition to your own mortgage). Most co-ops periodically refinance the loan to borrow money to tackle building improvements.

- Co-op mortgage rates tend to be a bit higher than condo mortgage.

- Not very many co-op lenders so limited competition for your mortgage

- Co-op properties tend to be old so infrastructure tends to be old (i.e. oil or electric heat) or indivisible (i.e. not separately metered). Therefore, there's really no incentive for co-op owners to save on utilities.

- Unless it is a sponsor's unit, you generally have to submit personal financials and interview in front of the co-op board. Some co-op board members tend to be little napoleons and interviews can be more like interrogations. You won't know the board's true colors until at the interview, at which time, you are pretty much 'pregnant' with the transaction going through.

- Due to the above and other factors, co-ops do not appreciate (if at all) as quickly as condo/homes.