Condo vs. apartment: Which is best for you?

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The decision to rent vs. buy a home can impact your life for years to come. For many first-time homebuyers, a condo is a natural entry point into homeownership, after considering apartment vs. condo options and other housing types carefully.

What’s the difference between an apartment and a condo?

The biggest difference between a condo vs. apartment is ownership. An apartment is defined as a residence that is rented, often as part of a larger residential building. A condo is similar in structure to an apartment — usually a unit within a larger residential building — but condos are owned instead of rented. The property taxes of a condo are paid by the owner; landlords, rather than apartment renters, pay property taxes for an apartment.

Because the structure of condo and apartment communities is similar, they often have comparable amenities and locations. Both kinds of units may come with benefits like a pool, trash disposal, manicured green spaces, on-property gyms and more.

The difference is that a condo owner is building equity, paying monthly homeowners association (HOA) dues and is responsible for all interior maintenance, while an apartment renter pays rent each month, doesn’t build equity and relies on the landlord to address maintenance issues.

What to consider

  • Cost: The cost of renting an apartment is fairly straightforward. Typically, you pay a deposit when you begin your lease, and might be required to pay the first and last months’ payments upfront. Then, you make monthly payments for the term of your lease agreement. The costs of becoming a condo owner are a bit more involved and expensive. You’ll make a down payment and pay closing costs for a mortgage and a home inspection fee upfront. Depending on the mortgage you get, you can put as little as 3 percent down and pay up to 5 percent of the purchase price in closing costs. A condo also comes with monthly HOA dues, which vary depending on the amenities and services offered.
  • Maintenance: When you’re renting an apartment and something goes wrong (think a leaky faucet or a broken appliance), the repair is typically the landlord’s responsibility. However, when you’re a condo owner, you’ll foot the bill to have those things fixed. (Here are top tips for avoiding pricey home repairs.)
  • Amenities: Because condo and apartment buildings tend to be structured similarly — either high-rise buildings or just a few floors — they often come with comparable amenities. Think about what amenities are most important to you, such as a doorman, a pool, gym or greenspace, and compare what the various communities in your area offer.
  • Location: Location is an important factor when deciding where to live. Because apartment and condo buildings can have similar structural footprints, you’ll likely find both options in cities and smaller suburbs (they’re less common, however, in rural areas). Both types of buildings can be near places of business, restaurants, parks and more.
  • HOA rules: When considering an apartment vs. condo, rules will be a factor. Both types of communities come with rules about behavior in common areas, what kinds of pets are allowed and what kinds of decorations are allowed on the unit’s exterior. Apartment landlords can also dictate what renters can do inside their unit and might restrict activities like hanging art or painting walls. On the other hand, condo owners can generally decorate the inside of their home however they choose.

Who is a condo best for?

A condo can be a more affordable entry point to homeownership, and as a homeowner, you’ll build equity over time and have access to the tax benefits that come with owning property.

Condo pros

  • Affordability – For first-time homebuyers or those who want to downsize, condos can be an appealing option due to their lower prices. The median sales price of an existing condo was $266,300 as of the fourth quarter of 2020, while the median price for a single-family home was $299,900, according to the National Association of Realtors.
  • Low maintenance – The condo association typically takes care of property maintenance, so you won’t have to handle yard work or other projects on your own.
  • Walkability – Many condo communities are in proximity to shopping, recreational areas and transportation. If walkability is important to you, a condo in this type of location could be a fit.

Condo cons

  • Dues – Condo owners have to pay HOA fees, usually monthly. These can increase over time, and they are typically based on the amenities the condo association offers.
  • Lack of privacy – Because you share walls with neighbors, you won’t have as much privacy or control over noise.
  • Limited by rules – Even though you own the condo, you are bound by the association’s rules, which could limit how you use or decorate the property. You might not have a say, for instance, in how you landscape.

Who is an apartment best for?

Apartments are a smart choice for those who don’t want the responsibility and expense of homeownership.

Apartment pros

  • Flexibility to relocate – An apartment is a good option if you don’t plan to stay in a particular area long-term. For instance, if you’re only planning to live in a city for a year or two before moving, apartment living (and renting, in general) might be smarter than tying yourself to a condo.
  • Low or no maintenance – In general, your landlord is in charge of maintaining the property while you rent it. Be sure to check your lease to see what maintenance, if any, you’re obligated to do.
  • Proximity – Apartment communities are often located in or near city centers, with easy access to restaurants, shopping and more.

Apartment cons

  • Fewer perks – While some apartments come with a community pool or recreation area, they might not have as many facilities available compared to a condo. If you’re looking for a range of amenities, a condo might be a better option for you.
  • No equity – If you’re renting an apartment, you’re not building equity in your own home like you would if you owned a condo. When you rent, you’re helping build your landlord’s equity instead.
  • Noise – Depending on where you rent, you could find yourself living very close to your neighbors, which can come with noise or privacy issues.

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Written by
Jennifer Bradley Franklin
Contributing writer
Jennifer Bradley Franklin is a multi-platform journalist and author, often covering finance, real estate and more.
Edited by
Mortgage editor