Planning to sublet? Think twice about buying a co-op

Most co-ops have very strict policies about subletting, which does not make them an ideal
investment opportunity and can present a serious challenge if your job suddenly relocates to
London, for instance. The rules vary, but owners are usually allowed to sublet their apartment
for no longer than 1 to 2 years in any 5-7 year period. The board also gets to approve your
tenant and charge you a fee for subletting.

Condo sublet policies are far more liberal. While there may be rules against short-term
sublets (say, less than 6 months), there is usually no outside limit nor do boards have the right
to turn down a tenant unless they exercise that right of first refusal and lease your apartment
themselves. This makes condos ideal if you are looking to buy strictly for investment purposes
and rent out your apartment year round. But just like a co-op, the application fees, move-in
fees, processing fees, etc., can range from a few hundred to a couple of thousand dollars
extra that you or your potential tenant will have to pay. And, if you do make a home in your
condo, you will be living in a building with a more transient population than a co-op.

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