Condo vs. Apartment: How to Decide

Deciding whether to rent or buy a home is one of the largest choices you can make in life so making sure you understand the key differences between homeownership and renting will help. 

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

The main difference between a condo vs. an apartment is whether you own it. Apartments are residences that you rent, and usually exist as part of a larger building, while a condo can also be part of a larger building, you own it.

Because of this difference, you will pay property taxes on your condo as the owner, but not on your apartment as the landlord who is the owner in that scenario. In terms of actual layouts like the number of bedrooms and amenities like pools and laundry facilities, condos and apartments can be similar. 

Another difference to call out is that condo owners have equity by paying their mortgage and can benefit if their condo increases in value, while a renter will not see any upside if their apartment increases in market value (in fact, their rent could go up). A condo owner does have to pay fees unlike a renter for homeowners association (HOA) dues and other maintenance costs, while a renter can rely on a landlord to pay for any repairs or improvements.

Main Factors to Consider for a Condo vs. Apartment

• Overall Cost: 

  • Apartment Renter: Being a renter is relatively simple. You have a security deposit and a potential requirement for the first month’s rent and last month’s rent paid immediately and for the remainder of your lease, you make monthly payments. You don’t have to worry about paying for repairs, unlike your landlord.

  • Condo Owner: As a condo owner, you have a larger variety of expenses including some potential unforeseen ones. You’ll have a mortgage and have to pay the downpayment (typically 5-20%) upfront along with any home inspection fees and closing costs (can be 3-5% of the mortgage). You’ll then have to pay regular HOA dues and for any repairs or maintenance needed, which can get expensive.

• Repairs: 

  • Apartment Renter: You’re usually not responsible for having to schedule or apy for repairs in your apartment as your landlord will have to take care of it. 

  • Condo Owner: You will have to schedule, fix, and pay for repairs yourself.

• Amenities/Location: 

  • Apartment Renters and Condo Owners: Because the main difference between condos and apartments is ownership, you will tend to get the same amenities so you’ll have to decide on the most impactful ones like an on-site gym or pool on a case-by-case basis. You’ll also find both apartments and condos in the same neighborhoods so there won’t be a significant difference between the two either. 

• Rules:

  • Both apartments and condos can have rules, but they may differ. For apartment renters, they’ll have to follow the rules set by their landlord, and condo owners will have to follow any rules set by their homeowner’s association. 

Condo Pros and Cons

• Pros: Least expensive ownership: Condos are usually the most affordable option for those that are able to purchase a home as they are smaller than a single-family home usually by about 10% according to the National Association of Realtors.

• Cons: HOA dues can increase over time and be significant and you also have less privacy in a condo usually than with your own single-family home. 

Apartment Pros and Cons

• Pros: Flexibility is much better as a renter because you are not tied to a mortgage or ownership of a property. You can try out more places to live and you also don’t have to pay for repairs and maintenance. 

• Cons: You lose out on home equity and can’t build wealth through property value increases. 

Conclusion: Is a Condo or Apartment Right for You?

Only you can make a decision to rent or buy a home depending on all of the factors we have listed. If you're looking to rent and want roommates, try looking at Alcove’s listings to rent! You’ll find cheaper rent than a normal studio with a great community and a lot of preconfigured apartment features.