Investing in real estate is a great way to make an additional side income. You might consider buying into cooperative housing, often called co-op apartments. Essentially, it’s a building full of apartment units or condominiums, each owned by individual residents. These units are especially popular in large cities like Washington, D.C. and New York, where homes within the city are sparse.
Once you’ve purchased a co-op, you’ll want to fill it with buyers. While you’ll be selling units to autonomous individuals rather than renters, it doesn’t hurt to run a tenant background check free of charge. Whether or not they pay their mortgage is the bank’s problem, but you want to avoid criminal activities or disputes between neighbors as much as possible. You’ll also need co-op insurance. This is an essential component of buying a condo building that landlords should understand fully before taking out a policy.
Co-op insurance meets your unique needs
As the landlord of cooperative housing, you have specific needs that typical property insurance won’t cover. You’ll need insurance on the building and its common areas, as well as liability protection. You might foot the entire bill for this policy yourself or work with the shareholders or condo owners to cover the costs. The latter is more common when you own your own unit with your own condo insurance policy.
Because you own the building itself and the common areas, but you don’t own the individual units, you don’t need coverage of those areas. Co-op insurance is designed to cover only the parts of the building that you own, with certain exclusions to protect you from liability and damages within individual areas.
You’ll take out a master policy
As the building owner, you’ll need a master policy. It covers your investment and provides liability coverage for … Read the rest