Are you torn between renting an apartment or buying a condo?

The difference between a condo and an apartment can significantly impact your

  • lifestyle
  • finances
  • long-term goals

In this article, we’ll examine the 5 differences between a condo and an apartment to help you make an educated decision. We will also look at a real-life scenario and see the two side by side.

By the end of the article, you will know the answer to “Should I buy a condo or just rent an apartment?

Key Takeaways
  • Ownership: Condos are purchased and offer ownership benefits, while apartments are rented and owned by landlords.
  • Financial Responsibility: Condo owners pay for mortgages, property taxes, and HOA fees, whereas apartment renters pay rent and sometimes utilities.
  • Maintenance: Condo owners are responsible for their unit’s maintenance, while apartment landlords handle repairs and upkeep.
  • Amenities: Condos often feature high-end amenities maintained by HOA fees, while apartment amenities vary by complex.
  • Flexibility: Renting an apartment offers more flexibility and less commitment than owning a condo.
  • Both options are considered an alternative to traditional housing to save money.

Disclosure: This post may contain affiliate links, meaning I can earn commissions. If you decide to purchase through my links, it is at no cost to you.

What are the differences between a condo and an apartment?

differences between a condo and an apartment

What is a Condo?

  • Privately owned unit within a building or community
  • Shared common areas and amenities
  • Owners are responsible for maintenance and repairs

What is an Apartment?

  • Rental unit owned by a landlord
  • Part of a building owned by a single entity
  • Tenants rely on landlords for maintenance and repairs
an apartment
Design Interior Apartments” by JOHNSON DESIGN STUDIO is licensed under CC BY 2.0

1. Condos are purchased, apartments are rented

The ownership structure is one of the most significant differences between condos and apartments.

When you buy a condo, you own the individual unit within the building or community. This means you can renovate, decorate, and sell your unit as you see fit, subject to any rules the condo association sets.

If you rent an apartment, you pay the landlord for the right to live in their property. You don’t own the unit, and you’re bound by the terms of your lease agreement.

This typically means you can’t make significant changes to the apartment without the landlord’s permission, and you don’t build equity in the property over time.

Financial implications of ownership vs. renting

Owning a condo comes with several financial responsibilities that don’t apply to renting an apartment.

FactorCondosApartments
Monthly Payments– Pay a mortgage, property taxes, and condo association fees.– Pay rent to the landlord, which may include some utilities.
Maintenance Costs– Fees cover maintenance and upkeep of common areas (e.g., lobby, elevators, gym, pool).– No responsibility for property taxes or maintenance costs.
Expense Predictability– Variable monthly expenses due to maintenance fees and property taxes.– More predictable monthly expenses, primarily just rent.

Renting an apartment may be a better choice if you only plan to live in an area for 1-2 years.

2. Condos have shared common areas and amenities

Another difference between condos and apartments is the presence of shared common areas and amenities.

In a condo community, owners collectively pay for and maintain these spaces, which can include:

  • Fitness centers
  • Swimming pools
  • Parking garages
  • Rooftop terraces
  • Lobbies and elevators

These amenities are typically higher-end and better maintained than those found in apartment complexes, as condo owners have a vested interest in preserving the value of their property.

Apartment amenities vary by complex and location.

AmenityCondosApartments
Fitness centersOften high-end, with modern equipmentBasic, if available
Swimming poolsCommonly available, maintained by HOALess common, maintained by property management
Concierge servicesOften available, included in HOA duesRarely available
ParkingPrivate garages or assigned spots, included in HOA duesShared lots, included in rent
Outdoor spacesRooftop terraces, gardens, or patiosCourtyards or playgrounds

While some high-end apartment buildings may offer similar amenities, they are the exception rather than the rule.

3. Condo owners have more control over their unit

When you own a condo, you have more freedom to make changes to your unit, such as renovations or upgrades, without seeking permission from a landlord.

This sense of ownership lets you personalize your living space to suit your tastes and needs.

Brown Wooden Ladder Beside Painting Materials
Photo by Blue Bird on Pexels

However, it’s important to note that while you have control over your unit, you’ll still need to adhere to any rules and regulations set by the condo association or HOA.

Condo owners also have a say in building-wide decisions through their voting rights within the condo association.

This means you can participate in decisions regarding common area upgrades, maintenance priorities, and other community matters.

Apartment renters have no control over their units or the complex.

4. Apartment renters have less responsibility

As an apartment renter, you have less responsibility for maintenance and repairs.

If something breaks or needs fixing, you can simply contact your landlord or property management company to handle the issue.

This can be a significant advantage for those who prefer not to deal with the hassles and expenses of home maintenance.

You may have to wait for your landlord to address issues, and the repairs may not always meet your expectations.

man in red and gray hoodie holding white smartphone
Photo by jaikishan patel on Unsplash

5. Understanding monthly fees: Condo HOA dues vs apartment rent

When you own a condo, you’re responsible for paying monthly homeowners association (HOA) fees. These fees cover a variety of shared expenses, including:

  • Building maintenance: This includes regular upkeep of common areas, such as lobbies, elevators, and outdoor spaces. Your HOA fees ensure that the building remains in good condition and that necessary repairs are promptly made.
  • Amenities: If your condo building offers amenities like a gym, pool, or rooftop terrace, your HOA fees help to maintain and improve these features. This means you can enjoy these perks without worrying about their upkeep.
  • Insurance: HOA fees typically include insurance for the building itself, which covers damages to common areas and the exterior of the building. However, you’ll still need to purchase your insurance for your unit.

HOA fees can increase over time. If the HOA decides to add new amenities, your monthly dues may increase as the building ages and requires more maintenance.

Tip

Before purchasing a condo, it is important to review the HOA’s financial documents to understand the current fees and any planned increases.

Apartment rent is all-inclusive

Your monthly rent payment typically covers your living expenses when renting an apartment. There is not an extra HOA fee to pay.

This can include:

  • Utilities: Some apartment buildings include utilities like water, gas, and electricity in the monthly rent. This can make budgeting easier, as you don’t have to worry about separate bills for these services.
  • Maintenance: You’re not responsible for most maintenance tasks as a renter. If something breaks in your apartment, like a leaky faucet or a malfunctioning appliance, your landlord is typically responsible for fixing it.
  • Amenities: Many apartment buildings offer amenities similar to condo buildings, such as gyms and pools. The cost of maintaining these amenities is usually included in your rent.

When your lease is up for renewal, your landlord may raise the rent based on market conditions or improvements to the building or your unit.

6 Tips to Help you Decide Between a Condo or an Apartment

Tip 1: Consider Your Budget and Investment Goals

If you are wondering if condos are more expensive than apartments, here is some information to help you understand the financial aspect of the two.

The short answer is a condo can be cheaper than an apartment because the monthly cost of a condo is based on the mortgage you obtain and not the market rent.

Here’s a comparison:

FactorCondosApartments
Upfront Costs– Down payment and mortgage required.
– Median down payment for first-time buyers: 7%
– Lower costs: security deposit and first month’s rent.
– More accessible for those with limited savings.
Long-Term Financial Implications– Potential to build equity over time.
– Significant investment, especially in high-demand areas.
– Rent payments do not contribute to building equity.
– Ideal for those preferring not to invest heavily in property.

Tip 2: Evaluating Your Financial Readiness

Before committing to a condo purchase, assess your financial stability and creditworthiness:

  • Credit Score:
    • Lenders typically require a minimum credit score of 620 for conventional loans.
  • Debt-to-Income Ratio:
    • It should be below 43%.
  • Financial Obligations:
    • Significant student loans, car payments, or credit card balances can challenge qualifying for a mortgage.

Most of the above doesn’t matter for an apartment, although some apartment complexes will give potential tenants credit.

fan of 100 U.S. dollar banknotes
Photo by Alexander Mils on Unsplash

Tip 3: Think About Your Lifestyle Preferences

By comparing these aspects, you can easily see how lifestyle and personal preferences influence the choice between a condo and an apartment.

Consider what factors are most important to you when making your decision.

FactorCondosApartments
Privacy and Freedom– More privacy and freedom.
– Control over renovations, upgrades, and décor.
– No need for landlord approval for changes.
– Less privacy due to shared walls.
– Need landlord approval for significant changes.
– Limited control over modifications.
Community and Social Life– Greater sense of community.
– Participation in HOA meetings and events.
– Varied community involvement.
– Less structured community activities.
Maintenance and Repairs– Owner responsible for maintenance and repairs.
– Higher involvement in upkeep.
– Landlord responsible for maintenance and repairs.
– Lower maintenance responsibilities.
– Ideal for busy professionals and frequent travelers.

Tip 4: Pet Ownership and Noise Levels

Pets and noise matter! One you want to live with and the other you don’t.

FactorCondosApartments
Pet Policies– Condo associations may restrict pet number, size, or breed.
– Some condos may prohibit pets entirely.
– Generally more lenient pet policies.
– Many complexes offer pet-friendly units for an additional fee.
Noise Levels– Better soundproofing, providing a quieter environment.
– More substantial construction.
– Less control over noise from neighbors.
– Noise can easily travel through shared walls, floors, and ceilings.
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Olan Mills Pet Photography” by Darwin Bell

Tip 5: Assess Your Location and Amenity Must-Haves

Location and amenities can differ when choosing between a condo or apartment.

FactorCondosApartments
Location– Often in prime urban areas or desirable vacation destinations.– Available in urban centers, suburban, and rural areas.
Access to Amenities– Easy access to dining, shopping, entertainment, and recreational activities.– Access varies widely depending on location.
Lifestyle– Ideal for those who enjoy a walkable lifestyle and being in the heart of the action.– Suitable for a variety of lifestyles, from urban to rural living.

This diversity allows renters to find a home that suits their specific needs, whether it’s proximity to work, good schools, or natural surroundings.

Tip 6: Examine Your Long-Term Housing Needs

Consider your long-term housing needs and plans when deciding between a condo and an apartment.

FactorCondosApartments
Long-Term Commitment– Better if you anticipate staying in the same area for several years or more.– Suitable if your job requires frequent relocation or if you value the ability to move easily.
Investment– Allows you to put down roots, build equity, and have a stable housing situation.– Provides flexibility to change locations without the hassle and expense of selling a property.

Buying a Condo vs Renting an Apartment: Sarah and John’s Stories

Imagine two friends, Sarah and John both attending the same university in a 5 year progrm. Sarah decided to buy a Condo for $115,000 and her friend John rented an apartment.

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Model Berlin Teufelsberg” by vanes_hud

Sarah’s Condo:

  • Monthly Costs:
    • Mortgage: $850
    • HOA Fees: $300
    • Total Monthly Cost: $1150
  • Benefits:
    • Sarah is building equity with each mortgage payment.
    • Sarah also benefits from high-end amenities like a gym and pool, which her HOA fees maintain.
  • Considerations:
    • Sarah has a higher monthly cost compared to John.
    • She needs to be prepared for unexpected maintenance costs and property taxes.

John’s Apartment:

  • Monthly Costs:
    • Rent: $1100
    • Total Monthly Cost: $1100
  • Benefits:
    • John’s monthly costs are slightly lower than Sarah’s.
    • He doesn’t have to worry about maintenance or property taxes, as these are covered by his landlord.
  • Considerations:
    • John is not building equity; his rent payments do not contribute to owning the property.
    • If the rent increases, John’s monthly costs could rise unpredictably.

Long-Term Financial Impact of buying a condo vs renting an apartment

FactorSarah (Condo)John (Apartment)
Total Payments Over 5 Years$69,000 in mortgage payments + $18,000 in HOA fees = $87,000$66,000 in rent payments
EquitySarah has paid down her mortgage to $84,000.$0
Potential AppreciationSarah’s condo is now worth $121,000 which is $6,000 more than what she paid.$0

Deciding Between Buying a Condo and Renting an Apartment

FactorCondosApartments
OwnershipOwns the unitRent the unit
Upfront CostsHigher (down payment, closing costs)Lower (security deposit, rent)
Monthly CostsMortgage, HOA fees, utilitiesRent, utilities
MaintenanceOwner’s responsibilityLandlord’s responsibility
FlexibilityLess flexible (harder to move quickly)More flexible (easier to move)
EquityCould Build equityNo equity

Considerations:

  • Budget: Assess your financial situation. Can you afford the upfront costs of buying a condo? Do you prefer the lower initial costs of renting an apartment?
  • Lifestyle: Do you value customizing your living space and having a say in property decisions? Or do you prefer the ease of renting with fewer responsibilities?
  • Location: Think about where you want to live. Condos might be more common in urban areas, while apartments can be found in various locations.

Final Thoughts

Choosing between a condo and an apartment depends on your circumstances and goals.

Condos offer ownership benefits and the potential for property appreciation but require a long-term financial commitment.

Apartments provide flexibility and convenience, making them ideal for short-term living with lower financial risk.

Evaluate your priorities to make the best decision for your lifestyle and financial situation.

Frequently Asked Questions

How big are condos, and is a condo bigger than an apartment?

Condos in size from 400 square feet to 2000 square feet more. Typically, condos are bigger than apartments to keep apartment costs affordable.

Are Apartments Privately owned?

Most apartments are not privately owned. Apartments tend to be owned by a landlord or company.

Can you save money by renting a condo vs apartment?

If you rent a condo, you could save money because the rent is based on what the owner decides to charge rather than the market rent.

Author
  • Erin Hybart

    Meet Erin, a real estate enthusiast with a wealth of knowledge and an insatiable curiosity for all things Real Estate and living with intention. She passionately advocates for alternative, affordable, and eco-friendly housing solutions. She believes in pushing the industry's innovation boundaries and thinking outside the box. As a licensed real estate agent in Louisiana, Erin dedicates herself to assisting clients in buying and selling properties and mentoring fellow agents to succeed in their own Real Estate businesses. In addition to her professional pursuits, Erin channels her expertise into captivating house-flipping adventures.

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