What Is A Condo? The Difference Between A Condo And An Apartment
October 15, 2020
Not sure what, exactly, the difference is between a condo and an apartment? That’s understandable. If you’ve never lived in one or the other, you might think of them as basically interchangeable. However, there’s quite a bit of difference between the two.
Basically, you rent an apartment, but you buy a condo…which you can also rent. Even more confused? Don’t worry, we’ll walk you through it.
What Is A Condo?
A condominium is a building or complex of buildings made up of individually-owned units. Basically, it’s like an apartment building where each apartment is owned by an individual, rather than the whole complex being owned by a landlord or a property management firm. If someone is renting a condo unit, they’re renting directly from that condo’s owner.
In more technical terms, a condo is a residential property where the property owner only owns the portion of the building that consists of the interior of their home. This is in contrast with a single family residence, or what you might traditionally think of as a “house,” where the owner owns both the dwelling and the property it is located on.
Condo owners are responsible for what goes on within their individual units, including maintenance and repairs. Beyond that, they’re required to pay regular fees to a condo association that is charged with maintenance of the shared common areas, such as yards, garages, laundry rooms and the like.
Typically, individual condo units make up one building, or a complex of several buildings that make up the condo community. However, you may also come across detached condos, where owners live in their own freestanding house unit – more like a single family residence – but pay into a condo association that takes care of the shared space within the community.
Who Are Condos Good For?
Condos tend to be popular among older adults, who like the freedom of owning their own home but don’t want to have to deal with all the upkeep that comes with owning a single family residence.
However, they’re good options for anyone who wants to own their place but doesn’t want to spend as much on homeownership (condos are typically – though not always – cheaper than houses). They can also be a good option for those who want to be closer to a downtown area or city, but still want to be able to own their home.
If you’re a renter, renting a condo might also be a good option over renting an apartment, depending on your needs. For example, renting from a condo owner might allow you more freedom or flexibility depending on who you’re renting from. On the other hand, renting with an apartment complex might provide more reliability when it comes to things like maintenance and repair requests.
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Condo Vs. Apartment
Condos and apartments are similar, but have some key differences in who owns them, how they’re run and governed and the costs involved.
Let’s dig into what these differences are.
The key difference between condos and apartments is who owns what. Typically, apartment buildings or complexes are owned by a property management company. Condos are buildings or complexes made up of individually owned units. Instead of answering to a property manager, condo dwellers make up a condo association that collects dues to cover maintenance costs for common areas of the condominium complex.
When you rent an apartment, you deal with the property manager to pay your rent, get repairs done or settle disputes. When you rent a condo, you’re renting directly from the person who owns that individual unit, making them your landlord.
Rules And Responsibilities
Rules for apartments are set by the property manager and tend to be the same for every tenant. This is not necessarily so with a condo.
With a condo, rules are set by the condo association, the governing board made up of people who own units within the complex. These organizations are similar to homeowners associations, or HOAs. They collect fees to maintain common areas or repair anything outside of the individual units, and provide guidelines that are meant to help everyone who lives there co-exist peacefully and resolve disputes when they come up.
When you rent a condo, you’ll be bound by these guidelines as well as any rules that a specific unit’s owner may have. So, for example, you could end up renting in a building that allows pets, but from a landlord who doesn’t allow pets in their unit.
For condo owners, there are a few different costs they’ll have to worry about.
First and foremost is the monthly mortgage payment. If the owner used a mortgage loan to purchase the condo, they’ll have to account for that expense each month.
Then, there are condo fees, which you’ll pay every month. This is how the condo association affords maintenance for common areas. These fees can run from a couple hundred dollars to several thousand for luxury complexes.
It’s important to find out what your association fees cover. They may include utilities, meaning you don’t have to worry about paying a monthly electric bill, and other amenities, such as access to a shared gym.
If you’re renting, you might not notice much of a price difference between rent for an apartment and rent for a condo. However, the makeup of your payments may be slightly different if you’re renting a condo.
Your landlord may have it written in your lease that you’re responsible for the condo association fees, or they may adjust your rent to cover the cost. Be sure to check your lease before signing; you don’t want to end up with a big, unexpected expense each month that makes your rent $200 higher than what you initially expected. However, it’s also possible that the owner will cover the fees for you.
Similarly, the owner may cover utilities for you, or they may be covered by the association fee. Thoroughly read through your lease agreement and make sure you understand what you’re on the hook for.
Condos and apartments both may provide certain community amenities. What you get generally depends on where you are and how much you pay to live there.
Whether a renter decides to go with an apartment or condo, they should ask about what’s provided to renters, in and out of their unit.
Is the unit furnished, or will you have to supply your own furniture? What are rules on decorating? For example, can you put nails in the walls to hang things? Can you paint the bedroom?
Of course, if you own the condo, you can pretty much do whatever you’d like, provided it doesn’t disturb anything outside your unit. You can paint, renovate the kitchen and fill your walls with as many nail holes as you want.
As for community-wide amenities, this will vary. Many condo or apartment complexes offer things like gym access, a pool or extra security.
If you’re a renter, you might have the impression that condos tend to be nicer than apartments, but this isn’t always true. It’s better to focus on what your needs are and which condos or apartments for rent in your area can meet those needs.
Condo owners are typically responsible for any maintenance or repairs needed within their unit. This is true not only if they are living there themselves, but if they are renting out the unit to a tenant.
All landlords have a responsibility to provide their tenants with habitable living conditions. However, an apartment owned by a large company may be better-positioned to provide this than an individual renting out their condo unit. An apartment will likely have a maintenance staff that is knowledgeable about how to deal with most problems and will be able to quickly get a problem resolved. With a condo, there is no maintenance staff, and you have to rely on the owner to get things done.
Deciding To Buy A Condo
If the benefits of living in a condo sound appealing to you, you might consider purchasing your own condo instead of renting. There are a lot of benefits to this.
A big potential benefit is the cost. While you do have to factor in condo association fees, because condos can be more affordable than a freestanding house, you could end up saving a significant chunk of money on mortgage payments each month by purchasing a condo.
Additionally, if you’re currently renting, trading your rent payments for mortgage payments means you’re building equity each month, rather than just helping your landlord pay off their mortgage. If you’ve previously discounted homeownership because of the high cost of entry, a condo might be closer to your price range.
However, it’s also possible that a condo would be more expensive than your current living situation, especially if it involves moving closer to a large city than where you currently are.
If you like the idea of owning your own place while not having to mow a lawn, shovel snow or repair a roof, a condo might be a great fit for you. But you also give up some things with this benefit, such as not being able to have your own garden, or having an outdoor space that belongs just to you.
Obviously, condo living isn’t for everyone. Large families or people who need a lot of space might feel cramped in a condo. People who don’t like living in communities with lots of rules might feel similarly confined. And large condo fees can significantly inflate your monthly housing budget.
There’s no “correct” choice. Whether renting a condo, buying a condo or renting an apartment is the best choice will depend on your needs, your budget and what makes sense for you.
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