The debate on condo vs. apartment is one that has always divided opinions among people. If you are looking for a new home, should you buy a condo or rent an apartment?
While some may think that buying a condo is better suited for their needs, others choose to rent a house as their preferred choice of living arrangement. Choosing between owning a condo and renting an apartment can be complex and stressful. Many lifestyle and financial considerations need to be addressed so that you make an informed decision.
Let’s take a look at the comparison between buying a condo vs. renting an apartment. What makes each option unique, and more importantly, which one is better?
What is a Condo?
A condominium, popularly known as a “condo,” is a private residence within a larger building or complex. When you become a condo owner, you take up the ownership of the unit, along with the right to use common areas. Together, with other condo owners, you’ll share swimming pools, garages, elevators, common hallways and gyms, to name a few. In simpler terms, you do not fully own the amenities within the building.
To own a condo means you can call the shots on who will rent your unit. You’re the landlord, and interaction with the renters will be directly handled by you. With a condo, you’ll build equity in your home. Equity is the difference between what you owe on your mortgage and what your home is currently worth. Investing in a condo means working towards building equity, especially if the property is located in a prime location.
You’ll find high-rise condo buildings in the city, offering a great living experience. The term “high-rise” refers to a building that vertically rises seven or more stories. So, condo buildings can be as high as you can imagine, and the higher you go the better the view experience.
What is an Apartment?
An apartment is a rented unit that is part of one, or more, residential buildings that is usually owned and/or managed by the property management company. In an apartment, renters have common areas to share like a swimming pool, gym, and covered parking.
Usually, units are defined by rental agreements between an owner and tenant, with a flexible lease that can range from a few months to one year. All tenants are subject to the same guidelines within the building or complex, which are established by the owner or management company.
What’s the Difference Between a Condo and an Apartment
The difference between a condo and an apartment stems from ownership. While an apartment is owned and managed by a property management company, a condo, on the other hand, is privately owned by an individual who manages it, or it lies under the umbrella of the condo community’s homeowner association HOA, which gets help from property management companies to run it.
When you rent a condo, you typically engage the owner directly, unlike in an apartment where you deal with a property manager who works for the corporation. Often, it is easier to contact the landlord directly in the case of renting a condo, however, for an apartment, you may not necessarily have as much contact with the landlord.
Condos are often managed by the owners, and renting one can be chaotic if the landlord is unreachable, especially when you need urgent assistance. If you are thinking of renting a condo, consider the availability of the landlord.
Let’s take a look at how condos and apartments compare from other points of view.
The Aspect of Cost: Buying a Condo vs. Renting Apartment
You may be thinking a condo will cost you more than an apartment. Well, to some extent you are right. Condos will typically require a downpayment to partly offset the purchase price. The downpayment can be anywhere between 3.5% to 20% of the price of the property. On the other hand, renting will cost less upfront, with requirements being one month’s rent and a security deposit.
If you lack a chunk of money to offer upfront, then you’ll probably have to rent, which is typically less costly than buying a condo. That said, depending on the location of the property, the monthly costs of a condo and an apartment could be similar.
Cost Associated with Buying a Condo
Condo owners are required to pay monthly fees to HOA. The HOA fees represent the largest expense of the condo lifestyle. The HOA fees are used to facilitate the maintenance, and other expenses such as parking, insurance, and a contingency fund. The downside of paying this fee is that you never get it back, nor does it build equity.
Unlike apartments, owning a condo comes with paying property taxes. This means condo owners incur extra costs, in the name of taxes, annually. You also have to keep in mind that condo closing costs can be up to several thousands of dollars.
Depending on your budget, you can pay a downpayment and offset the rest with a monthly mortgage payment.
Cost Associated with Renting an Apartment
Apart from paying monthly rent, as a tenant, you also could be paying for utilities separately, such as gas, electricity, and internet, to external providers every month.
With that said, in apartments, you don’t have to worry about closing costs. As soon as you pay a security deposit, and one month’s rent, you’re good to go.
Whether you rent an apartment or own a condo, maintenance is always a must. An issue is always going to show up that needs immediate attention before the damage is out of control. So how does maintenance vary in both condos and apartments?
Maintenance in Condos
If you are a condo owner, it’s your responsibility to fix any damages within. If you choose to let in a tenant, you may agree on what cost either of you will take, as far as maintenance is concerned. However, HOA often covers any maintenance of the community, such as the shared amenities and the building itself.
Unlike apartments where the management will organize the maintenance by sending someone to your unit, owning condos means you will have to handle the process, since you are technically the landlord.
Maintenance in Apartments
In most apartments, maintenance is offered free and available 24/7. Of course, the management doesn’t want to upset their tenants by being inefficient in essential services like maintenance. Most of the repairs are usually their responsibility, and all you have to do is submit a service request.
How Do Rules and Regulations on Both Condos and Apartments Compare, and Who Sets them?
Rules and regulations can be stressful, especially when it limits your lifestyle, right? Needless to say, you’ll have to follow them if you want to stay within the community, no matter if it is the condo or the apartment.
In the case of a Condo
In a condo, rules and regulations are likely to be set by the HOA. These regulations offer guidelines on residential living to evade chaos and unnecessary issues within the community. For example, you’ll be informed of the pet policy within the community.
It is always important to check out whether the community is pet-friendly before buying a condo. It is not a guarantee that they accept pets.
In the case of an Apartment
In most cases, the apartment’s management company is the one setting the residential guidelines to be followed by everyone. Mostly, apartments don’t fancy walls being interfered with. This means more restrictions on customization, unlike in the condos where there are fewer restrictions.
Why You Might Be Better Off Renting an Apartment
Renting an apartment gives you the flexibility you need, meaning you’ll have the capacity to move on short notice. The owner of a condo, on the other hand, has to sell the property, or rent it out, before moving. Leases always have an exit clause, giving the tenant room to terminate it as stipulated in the agreement.
More Convenient Location
Apartments often can be found in a prime location, like being a walking distance from social amenities. For instance, you will find an apartment for rent around major shopping malls and popular recreational amenities, just to mention a few.
Less Maintenance than Condos
Renting an apartment gives you the financial benefit of not incurring the maintenance cost. As discussed earlier, it’s the responsibility of the property management company to fix it.
Buying a Condo vs. Renting an Apartment
If owning a condo or renting an apartment isn’t your taste, maybe you might want to consider homes for sale. You’ll find many listings, ranging from single family to multi family homes, no matter what area you want to live, and real estate agents can be vital in helping you secure your next home. Buying a home gives you the opportunity of also building equity.
What to Consider When Choosing a Home for Sale
It’s important to be aware of the critical factors when buying your next real estate property. Let’s check out what those vital aspects are when buying a home.
Establish how much you are willing to pay for a home. Prices vary, and so do the quality and location of the house.
Do you qualify for a mortgage? Is your credit score good enough to attract a substantial mortgage for your home?
Choose a location that makes it easier for you to get access to social amenities.
To buy a condo or rent an apartment is your choice to make, but at least backing it with facts will help. Based on the discussion above on buying a condo vs. renting, we can ultimately conclude that renting an apartment is the better option.
Flexibility, financial benefits, and convenience are all part of what is important, as far as your living arrangement is concerned. Renting perfectly fits the description, and thus gets the nod any day.
Taking out an adjustable-rate mortgage can be costly, especially whenever the rate goes up. Renting will be more stress-free, as you will not have to worry about the mortgage payments.