Condo vs. Apartment: What Are the Differences?
“Condo” and “apartment” are two terms that tend to get used interchangeably in the real estate world. Both are units in a residential building and are usual options for an urban area. However, when it comes to things like ownership, maintenance, and associated fees, condos and apartments are worlds apart.
It’s easy to understand the confusion, though—on the surface, as compartmentalized living quarters within larger structures, they don’t appear to be too different. To that end, this guide will cover the differences between a condo vs. apartment, including:
- Facilities and amenities
- Rental policies
Let’s get started!
The primary difference between an apartment and a condo is ownership. Condos are owned by the people who live there, while apartments are rented by tenants who pay a fee to a landlord.
When you rent an apartment, you pay a monthly fee from a landlord or apartment complex management company in exchange for your use of the property. In most cases, the tenant will fill out a rental application, then sign a lease once it’s approved. The tenant then pays a security deposit and monthly rent, and both the tenant and landlord are bound by the terms of the lease for its duration.
In a rental situation, the monthly cost of rent cannot be raised until the lease expires. In some cases, rent will include utilities like gas, electricity, and even internet and cable.
With condos, on the other hand, the property owner and the occupant are one. In fact, the word “condo” in its usage implies ownership. Like landlords and regular homeowners, condominium owners pay property taxes.
Some of the practical benefits of owning a condo over renting an apartment include:
- The ability to build equity: Like regular homeowners, condominium owners have the opportunity to build equity by paying down their mortgage as the value of the property increases.
- More freedom: Although condo owners must still abide by the rules and regulations of their specific HOAs, they have much more freedom in terms of what they can and can’t do to their property compared to renters.
- Good for first-time buyers: Buying a condo can be a great solution for people who want to dip a toe into the waters of homeownership without fully taking the real estate plunge. With a condo, you get a lot of the financial benefits of ownership with half of the maintenance and repair responsibilities.
Condos and apartments are very similar because they are both residential spaces designed within larger apartment buildings or complexes. But a key difference between them is how maintenance and repairs are handled and who is responsible for handling the individual unit.
With an apartment building, most if not all of the maintenance and repairs are the responsibility of the landlord, including making sure the building is:
- In a condition that satisfies local health and building codes
- Free of visible mold
- Free of pest infestations
- Equipped with a working furnace and water heater
Minor repairs like plumbing, kitchen appliance repair, and electrical issues will also typically fall under the landlord’s jurisdiction. However, depending on the lease terms, the tenant might find themselves liable for some repairs if they result from improper use while renting the apartment.
When it comes to condominiums, the owner is going to be responsible for most of the maintenance, particularly regarding repairs within the condo.
Many condos come with apartment amenities like exercise rooms, swimming pools, and clubhouses. In those cases, that upkeep and any repairs are usually covered by the Homeowners’ Association (HOA) that manages the grounds. The HOA may also cover any roof repairs or lawn maintenance that needs to be done for the apartment community.
Both apartments and condominiums can come with associated fees, and it’s important to know what they are.
When it comes to apartment rentals, you’ll likely pay fees such as:
- Application fee: It’s fairly common for landlords and rental companies to charge a small fee for applying for a lease. These fees are usually non-refundable and cover the cost of background and credit checks.
- Security deposit: In most rental cases, tenants are required to pay a security deposit to cover the cost of any property damage that might occur during the duration of the lease, as well as lost rent if the apartment renter breaks the lease. The security deposit is usually a portion of or equal to a month’s rent.
- Monthly rent: The most common and usually biggest fee associated with renting an apartment unit is the monthly amount you pay in rent.
According to the terms of your lease, you may have to pay situational fees, such as penalties for late rent payments, fees for breaking your lease early, or fees for other violations that might occur while renting.
Compared to apartments, condominiums come with many more fees, both upfront and for the duration of your ownership:
- Down payment: Just like purchasing any other property, you should expect to make a down payment toward a mortgage when buying a condo. The amount you need to put toward a down payment will vary depending on your mortgage and financial situation and can range from 3% to 20% of the total mortgage.
- Closing costs: In addition to a down payment, condo owners will need to pay closing costs before the sale is official. These costs cover a variety of fees paid to lawyers, taxes, appraisals, and more, and they usually total between 3% and 5% of the total loan.
- Inspections fees: Inspections are very necessary steps of the homebuying process, whether you’re purchasing a traditional house or a condominium. You’ll want to perform these inspections before closing on your sale.
- HOA fees or condo association fees: Despite the fact that you do own your apartment, you will likely be responsible for paying monthly HOA fees or condo fees to cover any maintenance of the property or large-scale construction projects that benefit the entire condo complex.
Facilities and amenities
Perhaps the area where condo living and apartment living have the largest overlap is with regard to the amenities and facilities they offer. In fact, amenities are one of the reasons people choose to rent apartments or buy condominiums over traditional homes.
However, what are the standard amenities you can expect to have available? Among the great perks of this kind of living are:
- Swimming pool: Sure, you can have a pool at a traditional home. But when you live in an apartment or condo, you don’t have to worry about the expensive upkeep a swimming pool requires.
- Exercise facilities: Many condominium associations and apartment complexes offer gym and workout facilities to residents and their guests.
- Clubhouse or common area: Apartments and condos are typically smaller than most homes. As such, it may be difficult to host large gatherings in a one-bedroom home. Luckily, many apartment complexes and condominium associations feature clubhouses and other multi-use spaces like game rooms and conference rooms to accommodate large groups. Common areas are also a great place to meet your neighbors and get a change of scenery without stepping outside.
Who gets access to these shared amenities varies depending on whether you’re living in a condo or apartment building.
One thing to know about renting an apartment compared to owning a condo is that living in an apartment will require that you abide by certain rental policies, whereas condominiums offer much more personal freedom.
Rental policies will vary from state to state and from landlord to landlord, but some common renting policies include:
- Sublease policies: A sublease is when you as the tenant find another renter to take over your lease, usually on a temporary basis. Many property managers will have very strict and specific policies regarding this practice, while others ban it completely.
- Proper use policies: Your lease will stipulate the types of activities that are and are not allowed in your apartment. These policies may include the prohibition of smoking or the selling of goods and services from within the unit.
- Grace period policies: Some landlords have policies regarding the allowance of grace periods for late rent, as required by state law.
- Extended absence policies: In some cases, your lease might contain an extended absence policy. This policy determines how many days you can spend away from the property without informing the property manager of your absence.
When renting an apartment, always remember that you are only subject to policies that are clearly defined in your lease agreement.
Landing: A place to come home to
Whether you’re buying a condo or renting an apartment, the whole real estate process can be fraught with many complex ins and outs. Knowing all the details can better equip you to decide which option is best for you. Landing knows this. That’s why we’re committed to making the rental process as transparent, streamlined, and convenient as possible for renters on the move.
When you join as a Landing member, you can view and apply for rentals all over the country. Once your application is approved, you can use our app to stay on top of your reservation, schedule cleaning and repair crews, and even pay your rent. See the world without losing a sense of home with Landing.