Whether you're planting roots in a hustling, bustling metropolis or downsizing to a smaller space, an apartment is a great place to call home sweet home. But, herein lies the problem: it's so easy to mistake an apartment for a condo and vice versa. (It's okay, there's no shame here.) Since both structures are considerably smaller than a standalone house, it's easy to think that a condo and an apartment are synonymous. While they might look similar, they actually have small nuances that make the two totally different.
So, what's the difference between an apartment and a condo? We're so happy you asked. To help navigate the sometimes-complicated world of real estate, we asked a few experts to break down some key terms.
Meet the Expert
What Is a Condo?
According to Kristine Campbell-Lopez of SG Associates, the biggest difference between a condo (or condominium) and an apartment is the ownership. "Typically, condos are purchased while apartments are rented," she says.
Before you decide if you should buy a condo, it's important to do the math because, let's be honest, expenses can add up fast. In addition to forking over a hefty down payment, condo owners are usually financially responsible for any repairs needed within their unit—and any remodeling needs. Oh, and did we mention that most condo owners also need to pay those Homeowner's Association, or HOA, fees? In other words, the whole endeavor isn't cheap.
Although buying a condo can offer some initial sticker shock, it might work out in your favor.
"One plus of owning a condo versus renting is that you actually own the condo and it is an investment on which you will gain equity," says Tomas Satas, founder and CEO of Windy City Home Buyer. "By renting, you are just putting money in the building owner's pocket. Though condo prices can fluctuate, the amount that you could rent it for would only go up."
Unless you're looking to become a real estate tycoon or certified house flipper, you'll be living in your condo for the long haul. Once you think past the down payment and long-term commitment, a condo has plenty of perks. Since you are the proud owner of your condo, you can set the house rules.
"Apartments typically will have a pet policy and you may or may not be able to have a pet," Campbell-Lopez explains. "With condo ownership, one also has the freedom to do interior updates to the home as opposed to renting an apartment. The most you can typically do in an apartment is paint the walls and hang a few pictures or shelves."
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Another thing to love about owning a condo? Your neighbors are in the same boat. While a condo's Homeowner's Association is typically responsible for maintaining the building's exterior and common areas, Satas believes that condo owners usually treat every nook and cranny like it's their own.
"Though a condo unit owner doesn't own the whole building, they still tend to treat the common inside and outside areas as if they were their own," he says. "Renters are less likely to pick up trash and pretty much leave all the building common area maintenance up to the owner because they believe that is what their rent payment is for."
And, since your neighbors will also be in their condos for the foreseeable future, you might even get to know them on a deeper level.
You set the rules for your space
Usually no need to deal with a landlord
You'll be able to get to know your neighbors
HOA is responsible for repairs on building's exterior and common areas
Requires a (sometimes pricey) down payment
Owner is responsible for all of the unit's maintenance costs
Owners need to pay HOA fees
What Is an Apartment?
Unlike a condo, which is typically owned by the tenant, apartment dwellers rent a unit from a landlord. So, instead of being financially responsible for a down payment, HOA fees, and any necessary repairs, you'll only need to give your landlord a returnable security deposit and monthly rent.
Compared to the cost of a condo, renting an apartment might seem like a total steal; however, it does come at another kind of price. Since renters do not own the unit they're living in, they have to abide to the rules laid out in their lease. When renting an apartment, it's important to read all the fine print first: Some landlords might have very laidback guidelines, while others will have strict rules about almost everything—right down to whether or not you can paint the walls. But, what happens if you do decide to make changes to your rental unit? Chances are, the money it'll take to return the unit to its original state will come right out of your security deposit when you move out.
Speaking of moving out, an apartment is a short-term commitment. Once your lease expires, you are free to live somewhere else if you want, making an apartment a no-brainer for anyone who wants to try a few neighborhoods before setting down permanent roots. That said, moving from one unit to the next isn't always as risk-free as it seems. Plus, every time your lease comes up for renewal, your landlord could raise the rent, making it tough to stay put even if you want to.
"If you do jump from one apartment to the next, that could be a red flag to property management companies when [you fill] out an application," Campbell-Lopez says. "Many property management companies like to see stability."
She also mentions that an apartment complex's tenants come and go faster than you can say, "doorman building," so it'll be more of challenge to get acquainted with your neighbors.
Fewer upfront costs
Landlords are responsible for common space repairs
Can be challenging to meet neighbors
Tenants must adhere to the landlord's lease and house rules
So, the million dollar question: should you live in a condo or an apartment? Well, the answer's not as straightforward as it seems. "Both have pros and cons, so in considering whether to buy or rent, make a list," Campbell-Lopez says. "I always tell my clients to make a pros and cons list of any home they’re looking at when they’ve narrowed it down."
For starters, take your bank account and phase of life into consideration. Are you able to afford a condo? Do you know where you'd want to buy a place? Are you ready to set down more permanent roots? Once you answer those questions, you can start focusing on finding your dream space.