All Area Realty Services on The Potential of a Co-Op in Jamaica

Starting a housing business here in Jamaica is an idea that could be as profitable as it is complex. After all, the growing property values and a median income of almost $50,000 give birth to a solid market. Thus, beginning a venture that deals with real property may be a great way to grow a prominent brand. In order to grab a piece of the market, however, one must be very creative with their strategies. Meaning, the days when companies could rely on effortless renting are almost over.

Now, the housing market has entered a stage where more innovative approaches are used. Consider, for instance, the potential of owning a co-op in the heart of Queens. The earnings could be outstanding, and the business strategy is about as unique as it gets. So, what exactly are co-ops and how can businessmen and women leverage them to grow their ventures?

Basic Guidelines

A co-op stands for cooperative housing and involves a company purchasing an entire property that they will then subdivide. Contrary to typical renting, however, a co-op will divide the property based on investment instead of pre-determined prices. It will do so by selling shares in their company. Then, anyone who purchases these shares will be given the right to reside within the co-op in a unit proportionate to the share of the company they purchased. So, it is essentially an indirect tit-for-tat strategy where the parent company still profits from its investment.

Some Challenges

Although Jamaica is one of the fastest growing areas in New York, establishing a co-op here presents some unique challenges. First, Jamaica is a cultural melting pot, so companies looking to establish a co-op have to address the language barriers that may take place. After all, as many as 24 percent of all people here speak exclusively Spanish.

Moreover, managing a co-op is probably the most difficult part of the process. Given how these ventures are managed by shareholders, one cannot simply give them a set of rules. On the contrary, the fact that these shareholders own a part of the business gives them the right to make their own rules. Just think about the way that regular corporate stakeholders are entitled to vote on corporate topics. The same idea applies to co-ops. Owners will generally be allowed to vote on important issues.

Thankfully there are property management companies like All Area Realty Services who understand the ins and outs of co-op management and can be relied upon to not only maintain the building, but also help manage incidents and keep proper records. With compliance handled by a professional property management firm, this frees up the co-op board to focus on issues pertaining to quality of life.

Establishing a Board

An easy way to delegate control in a co-op is to establish a board. Although it will include fewer members than a traditional corporate board, the idea remains the same. All of the shareholders will get together and decide on a few people that they want to represent them. Once they do so, the new board will be established. Generally speaking, the board's power will be enough to make the vast majority of management decisions. In instances where a board may lack the specific experience or regulatory knowledge required, input from property management firms has shown to be an invaluable asset.

Responsibilities

According to New York's leading property management company, All Area Realty Services, co-op owners have a certain set of responsibilities as well. First, they must offer something called the duty of care and loyalty. These are both corporate terms that guide shareholders on how to behave. The duty of care simply tells them to dedicate the necessary attention to the venture. Similarly, the duty of loyalty binds them to be faithful to the brand and contribute to its betterment.

Potential Failures

Sadly, even co-ops sometimes experience failure. After all, even a local business may be unaware of the finer points of owning a building here in Jamaica. Instead, a lot of coordinated effort and knowledge is necessary to get there.

As All Area Realty Services puts it, shareholders who disagree will not make great residents. Given each of their rights to influence the decision-making procedures, the room for conflict is enormous. Other potential concerns include insurance disputes, potential lawsuits, and other board-related challenges.