Condo vs. apartment: Which is best for you?

The decision to rent or 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. But how does a buying a condo differ from renting an apartment? Let’s take a closer look.

Condo vs. apartment: What’s the difference?

The biggest difference between a condo and an apartment is ownership. An apartment is defined as a residence that is rented, often as part of a larger residential building. A condo can be 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; property taxes for an apartment are paid by landlords, not renters.

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.

However, a condo owner is building equity, paying monthly homeowners association (HOA) dues and is responsible for all interior maintenance. An apartment renter, on the other hand, 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 you might also 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 pay for a home inspection, make a down payment and pay closing costs for your mortgage upfront. A condo is also likely to come with monthly HOA fees, 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 air conditioner), the repair is typically the landlord’s responsibility. However, when you’re a condo owner, you’ll foot the bill for home repairs.
• Amenities: Because condo and apartment complexes 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, a gym or green space, and compare what the various communities in your area offer.
• Location: Location is an important factor when deciding where to live, no matter what kind of housing you’re looking at. Because apartment and condo buildings often have small structural footprints, you’ll likely find both options in urban cities and densely populated suburbs (they’re less common, however, in rural areas). Both types of buildings are often situated near places of business, restaurants, parks and more.
• HOA rules: When considering an apartment vs. a condo, rules will be a factor. Both types of communities usually come with “house rules” about behavior in common areas, what kinds of pets are allowed and what kinds of exterior decorations are permitted. Apartment landlords can also dictate what renters can do inside their unit and might restrict things 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 than a single-family home. And as a homeowner, you’ll build equity over time and have access to tax benefits that a renter wouldn’t.

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 sale price of an existing condo in 2022 was $334,600, according to the National Association of Realtors, while the median price for a single-family home was $392,600.
• Low maintenance: A condo association or HOA 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 close proximity to shopping, recreational areas and public transportation. If walkability is important to you, a condo in this type of location could be a good fit.

Condo cons

• Dues: Condo owners usually have to pay monthly HOA fees. These can increase over time, and they are typically based on the amenities the condo association offers. Per Census data, HOA fees typically average $170 per month.
• Lack of privacy: Because you share walls with neighbors, you won’t have as much privacy or control over noise as you would in a freestanding home.
• 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 or what kinds of pets you can have.

Who is an apartment best for?

Apartments are a smart choice for those who don’t want the responsibility and expense of homeownership, or for those who aren’t likely to stay in the same town for very long.

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, renting is probably smarter than tying yourself to a mortgage.
• 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 yourself.
• Prime locations: Apartment communities are often located in or near city centers, with easy access to restaurants, shopping and more.

Apartment cons

• Fewer perks: While some apartment buildings come with a pool or recreation area, they might not have as many facilities available as a condo complex.
• No equity: If you’re renting an apartment, you’re not building equity in your own home like you would if you owned.
• Noise: Depending on where you rent, you could find yourself living very close to your neighbors, and even to outside foot traffic, which can come with noise or privacy issues.

Bottom line

If you can afford the costs and plan to stay put for a while, a condo is usually a good investment. And when you’re ready to move on, you might be able to rent it out for extra income. On the other hand, apartments are ideal for people who want flexibility, aren’t ready to buy or don’t want the maintenance costs and responsibilities of ownership.