Avoid Land Lease Co-ops

Buying into a Manhattan cooperative that does not own its land can present a number of financial challanges. There are numerous co-op buildings in Manhatan where the co-op corportation operates the building under a long-term lease from another investor. Monthly maintenance payments for land lease coops are often significantly higher than for co-ops that own the underlying land. In addition, these land-lease buildings are riskier investments than standard co-ops because the land owner could choose to sell the land or not renew the lease. And, with mortgage lending tightening, procuring an attractive, low-interest rate mortgage for a land lease building could prove to be quite difficult.