Condo vs Apartment: What’s the Difference?
Whether you choose a condo vs. an apartment is a choice that will impact your life for years to come. Many first-time homebuyers gravitate towards condos for their first venture into homeownership. But how do you know if a condo is right for you or if you’re ready to make the purchase? Our team at 33 Realty is here to help.
So What’s the Difference Between a Condo and an Apartment?
Ownership is the biggest difference between condos and apartments. Apartments are buildings that have rented units under one roof. Condos are similar in structure in the sense that they are usually a unit within a larger building, but condos are owned, not rented. Factors such as property taxes differ between condos and apartments. In apartment buildings, landlords pay the property taxes while in condos, the owner is responsible for paying taxes.
The amenities and locations of both condos and apartments are often similar as they have the same structure. Many times, both condos and apartments come with amenities such as a sharable swimming pool, trash disposal, lawn and gardening work, on-site gyms, and other communal benefits.
The difference, however, comes down to monthly dues. In a condo unit, the owner is responsible for paying monthly homeowners association (HOA) dues in addition to paying for all interior maintenance. Apartment renters are not responsible for a monthly HOA and will always defer to the property manager or landlord to address maintenance issues.
What to Keep In Mind:
When it comes to the pros and cons of buying a condo vs. renting an apartment, the cost is undoubtedly a factor in play. Rental costs are usually straightforward. Most buildings require that new renters to the building must pay a deposit when the lease begins in addition to the first and last month’s rent payments upfront. Once those fees are paid, the renter makes monthly payments until their lease agreement is up.
Condo owners face steeper prices upfront. Not only do they have to factor in enough money to make a down payment, but they must also consider closing costs and inspection fees. Depending on the type of mortgage you’re able to get, you may put as little as 3 percent down on the condo and pay as much as 5 percent of the overall purchase price during the closing process. It’s standard for condos to come with monthly HOA dues that depend on the amenities and services offered.
Let’s say you’re renting an apartment unit and the oven breaks. Rather than calling a repair person to come and fix it yourself, renters should call the landlord as it is their responsibility to repair the issue. This means no out-of-pocket cost to the renter. Condo owners are financially responsible to fix these types of issues on their own.
Many condo and apartment buildings have the same structure, either a high-rise or a few floors. Due to the similarities, condos, and apartments often have comparable amenities. When making your decision between the pros and cons of renting an apartment, consider the types of amenities that are the most important to you. Do you need a pool, gym, or a doorman? Do you have a dog that requires green space? This can help you make your decision.
Location is a significant factor when deciding where you want to live. Both apartment buildings and condo buildings are easily found in both large cities and smaller suburbs. Both condos and apartments are often located near local coffee shops, restaurants, retail shops, parks, and more. If you are hoping to buy and you want to get more bang for your buck, however, you might have to reside a bit outside of a major city.
Pros And Cons of Buying a Condo
Factoring in the pros and cons of buying a condo can help you make a decision that suits your needs both now and in the future.
If you’re a first-time homebuyer or you simply want to downsize, consider a condo due to its lower prices. By the start of 2022, the median sales price for an existing condo in the Chicago area was $438,000. On the other hand, the median price for a single-family home is about $339,000, according to the National Association of Realtors.
Condo associations are often responsible for taking care of any necessary property maintenance such as yard work, shoveling snow, etc. This is ideal so you don’t have to handle these tedious projects on your own.
It’s common for condo buildings to be located near local shops, recreational areas, and public transportation. If walkability is a large factor for you, it’s possible that a condo could be a great choice.
Limited by Rules
Despite the fact that you own the condo, you are still bound by the rules of the HOA. This could limit how you decorate the exterior of the property, the types of pets that you have, etc.
Lack of Privacy
Depending on the type of condo building in which you’re living, you could share walls with neighbors. You may also share common areas such as front doors, vestibules, etc. This gives you less control over noise and your privacy level.
It’s standard for condo owners to pay a monthly HOA fee. It’s not uncommon for these fees to increase over time as they are usually based on the amenities of the condo association.
Pros and Cons of Renting an Apartment
Apartments are an ideal choice in many circumstances, particularly for those who don’t want the responsibility and added expenses that accompany owning a home. Here are some pros and cons of renting an apartment.
With apartment buildings, there’s no need to put down a large down payment or worry about closing costs. The monthly rental costs are often more affordable compared to paying a mortgage, too. Plus, if you need anything fixed, you won’t have to pay out of pocket.
Generally speaking, your landlord takes on any necessary maintenance during your lease. Make sure to check the terms of your lease agreement to see if you’re obliged to take care of anything on your own.
Apartment buildings are often located in city centers and hubs, making them walkable to surrounding restaurants, parks, public transportation, and more.
Limited by Rules
Unlike condo buildings, apartment buildings don’t offer the freedom and flexibility that many people seek. You may run into restrictions surrounding pets, decorations, parking, and more. This could be frustrating if you are ready to live on your terms.
Lack of Privacy
Depending on the size of your apartment building, you could run into privacy issues. If your building has thin walls and floors, it could also come with noise concerns.
In the case that you’re renting, you aren’t building equity in the same way that you are by owning a condo. Instead, you’re contributing to building your landlord’s equity.
Condo vs. Apartment, Which Is Best?
There is no right or wrong answer when it comes to condos versus apartments. While the differences between condo and apartment buildings are expansive, each has its suggested use case and unique pros and cons.
Apartments are great for those who want a temporary living situation that is affordable and in a good part of town. Condos are ideal for those who will be sticking to one location for the foreseeable future and for those who want to build equity. Which is right for you depends on your financial situation as well as what you want for yourself for the foreseeable future.