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Condo Vs. Apartment: What’s The Difference?

Molly Grace9-Minute Read
August 27, 2020

The difference between a condo and an apartment essentially comes down to one vital question that many adults have to consider at least once in their lives: Should I rent or should I buy?

Making the leap from renting an apartment to buying a house can be a big step; however, because renting an apartment and owning a condo are more similar – at least in terms of lifestyle – apartment-dwellers might find themselves wondering if it makes sense to dip their toes into the waters of homeownership with a condo.

But what does that mean, exactly?

What Is A Condo?

To help clear up any confusion about what difference between a condo and an apartment, let’s define these two terms.

A condo, or condominium, is a type of housing where the owner only owns the interior of their unit within a larger building or complex.

In real estate, “condo” is a legal term that tells us something about how a property is owned. With condo-type ownership, the property owner holds title to the space within the walls of their housing unit, and they share ownership with other condo owners within their complex of any common areas. Common areas include things like parking lots, courtyards or laundry rooms – essentially, anything outside of the individually owned units.

Technically, a condo owner could rent out their individual unit to someone else (provided their condo association allows for it). However, when people talk about living in a condo, they’re usually talking about owning the property rather than renting it.

What Is An Apartment?

The word “apartment” most often refers to individual housing units within a larger complex or building that are available to rent. While you own a condo, you rent an apartment.

Apartments can come in all sorts of shapes and sizes. In densely packed cities, high-rise apartment buildings are more common. In less-crowded areas, you’re more likely to see apartment complexes with buildings that are only a few stories high and are more spread out. You may also find apartments that are part of smaller multifamily buildings, rather than existing within a complex or large building.

Whatever type of apartment you live in, the key is that you’re a renter rather than an owner. If you ever hear someone talk about purchasing an apartment, that generally means that they’ve purchased an individual unit as a condo or bought into a co-op building.

Main Differences Between Condos And Apartments

Let’s get an in-depth look at some of the key differences between condos and apartments that will impact your experience living in these two types of housing.

Ownership

With condo ownership, you own your own condo unit and share ownership rights of the building or complex’s common areas with your fellow condo owners. This means that you’ll all be required to chip in to cover the costs of regular upkeep and maintenance to these common areas.

Apartment ownership is different. Typically, a landlord will own all of the units within a building or complex and lease them out to individual renters. Many different types of entities can own a rental property and act as a landlord. Depending on where you live, your landlord may be an individual who only owns the building you live in, a bigger investor who owns many buildings in your area or even a corporation.

Sometimes, landlords will hire property managers or property management companies to oversee the day-to-day operations of the apartment complex. This entity may be responsible for things like collecting rent, dealing with tenant issues and managing the property’s finances.

Ownership will make a difference in how committed you are to your housing situation. If you want to live in an apartment, you’ll need to sign a lease. Typically, leases last for 1 year, though you can find landlords that offer longer and shorter leases as well. If, at the end of your lease, you decide you want to move somewhere else, you can do so relatively easily.

This is not the case with condo ownership. Like any other type of homeownership, the longer you stay in your condo, the more likely you are to enjoy the financial benefits of owning over renting.

Because selling your home a short time after buying it can be costly, condo ownership is more suited for those who plan to stay in their home for at least five years.

Rules

When you live in a condo, the rules of the community will be dictated by the homeowners association (HOA) in its governing documents. In an apartment, the building’s rules will be established by the landlord or property manager.

You might think that because you own your unit you’ll be subject to fewer rules in a condo than in an apartment, but that’s not necessarily true. It’s best to evaluate a community’s rules on a case-by-case basis. For example, many condo associations prohibit cats and dogs, while plenty of landlords allow tenants to keep pets of all kinds. It just depends on the individual condo or apartment.

The consequences of not following the rules for either an apartment or a condo can be similar, though you have more to lose with a condo.

When you break an apartment rule, consequences for rule-breaking could be anywhere from a warning or small fine to eviction. When you break a condo association rule, you could also be warned or fined.


While you can’t be evicted from a condo, HOAs generally have the ability to foreclose on your home if you don’t pay certain fees or assessments.

Costs And Fees

Speaking of fees, one important one that condo owners should be aware of is their HOA fee.

HOA fees are how condo communities afford the maintenance and upkeep of their buildings and common areas. Each resident within the community is required to pay monthly dues to the HOA as well as any one-time “special assessments” that come up to cover unexpected costs, such as big repairs.

Monthly HOA dues vary a lot depending on where you live. While many condo owners can expect to pay somewhere around $200 - $300 each month, some HOAs charge significantly more to cover the costs of high-end amenities.

Your HOA dues may also cover some utilities, such as water or heat.

In addition to HOA fees, condo owners will also be on the hook for property taxes.

When you live in an apartment, you’ll pay your monthly rent and any utilities you use. Some landlords may include certain utilities in your rent, eliminating the need for you to pay an extra bill each month.

Whether you’re considering a condo or an apartment, it’s important to ask how much your costs might increase over time.

Although your monthly mortgage payment on a condo will likely remain the same with a fixed-rate mortgage, HOA costs could increase or expensive special assessments could pop up. With an apartment, it’s possible for your rent to increase at the end of your lease term, and you could end up paying more if you decide to renew.

Maintenance

Condo owners are typically responsible for more than apartment-dwellers in terms of property maintenance.

When you live in an apartment, the landlord is responsible for most maintenance and repairs. If you have a leaky faucet or your air conditioning stops working, you’ll call your landlord or management office and they’ll send someone to fix it. In fact, landlords have a legal responsibility to make sure your unit’s vital systems, including plumbing, electricity and heat, are maintained.

When you live in a condo, you’re typically responsible for everything within your unit. If something goes wrong in your condo, you’ll need to call a handyperson – and you’ll be responsible for paying them.

However, who’s responsible for what can be more complex if any issues you encounter affect other condo units or common areas (such as a problem with a water pipe that services multiple units). Consult your governing documents to confirm what is within your realm of responsibility and what isn’t.

Amenities

Just as rules vary depending on the condo community or apartment complex you live in, so can the amenities you’re offered.

Amenities offered by both condos and apartments can include things like pools, fitness centers, clubhouses for community gatherings, off-street parking, gated entrances for security or more.

Some high-end condos or apartments can offer really luxe amenities, like rooftop dining areas or bowling alleys. Of course, the better the amenities, the more you’ll pay either in rent or in HOA fees. 

Pros And Cons Of Condo Living

Let’s take a look at the benefits and drawbacks of living in a condo.

Pros

The biggest benefit of living in a condo is that you own it – as long as that’s something that makes financial sense for you.

Because a condo will usually cost less than a detached, freestanding home in the same area, purchasing one can be an affordable way to become a homeowner; you may even be able to find a condo with a monthly payment that’s similar to or even lower than rent in your area.

When you own your home, you build equity in the home through your monthly mortgage payments. Over time, you’ll own more and more of your home outright. Contrast this with paying rent, where none of that money comes back to you.

You’ll also typically have a little bit more freedom with condo ownership than you will with renting. If having a space you can personalize and make improvements to is important to you, owning might be a better choice.

Cons

To make your home purchase worthwhile, you’ll need to stay put for a few years. If you need flexibility or aren’t sure where life might take you in the coming months or years, a condo might not suit your needs.

If you purchase a condo only to sell it a couple years later, any equity or value you’ve accrued in your home is more likely to be cancelled out by the costs of buying and selling the home (such as closing costs or real estate agent commissions).

Owning a condo means you’re on the hook financially. If something in your unit needs to be repaired, that comes out of your pocket. If the HOA calls for a special assessment, you’ll need to pay.

Before you purchase a condo, be sure you’re prepared for the long-term financial responsibilities that come with it.

Pros And Cons Of Apartment Living

Now, we’ll go over the benefits and drawbacks of living in an apartment.

Pros

Depending on housing costs where you live, renting an apartment can be more affordable than purchasing a condo, even in the long term.

When you rent, you’re only responsible for paying rent and utilities. If something in your apartment breaks, your landlord will send someone to fix it and pay the cost of repair.

Because you don’t have as much responsibility to a rented property as you do to an owned one, renting can provide a peace of mind that homeowners don’t get.

It’s also cheaper to move into an apartment than to buy a condo. Even if rent on an apartment and a mortgage on a condo are similar on a monthly basis, a condo buyer will likely need to put down at least 3% of the purchase price to be able to close on the home. If you’re trying to keep your startup costs low, renting may be more feasible. 

Cons

The main downside of renting is that there’s no return on investment. With homeownership, it’s possible to build wealth as you gain equity and your house appreciates in value. With renting, the money you spend on rent is gone as soon as your landlord cashes your check.

There’s also less freedom with renting. If your apartment has outdated fixtures or drab walls, there might not be a lot you can do about it other than spruce it up with your own, non-permanent décor.

How Do Townhouses Differ From Condos And Apartments?

As you learn about the different types of housing, you may have heard about townhouses, which are often compared to condos.

Townhouses are owned by individuals, so as with a condo, you’ll typically own your townhouse – though you may encounter townhouse owners who rent theirs out.

Townhouses differ from condos in that the owner owns both the inside and outside of the home, including the land it sits on.

These types of homes are attached to other homes on at least one side. You’ll often see townhouses in long rows, built right next to each other with a shared wall between each house. These types of homes also tend to come with mandatory HOA membership.

Is A Condo Or An Apartment Right For You?

As we can see, which type of housing is right for you is entirely dependent on your specific needs and financial situation. Those who are looking for a place to permanently call home and a long-term investment may be more suited to condo ownership, while someone who is still figuring out where they want to go in life might prefer the flexibility that comes with renting.

Ultimately, it’s all about what’s best for you.

The Bottom Line

As you consider whether to rent an apartment or buy a condo, think about the short- and long-term costs of each, how long you plan to live in your next home and what your goals are.

If you want to learn more about homeownership, check out more home buying articles on the Rocket HomesSM blog.

Get the right home loan for you.

Molly Grace

Molly Grace is a staff writer focusing on mortgages, personal finance and homeownership. She has a B.A. in journalism from Indiana University. You can follow her on Twitter @themollygrace.