Condos and apartments share a lot in common. Each is a type of residential building where more than one person normally lives. However, if you are weighing them as options for your next move, there are a lot of differences in both building set-up and financial arrangement. Understanding them will help you make the best decision you can.
Ownership of Condominiums and Apartments
You can rent either, but you normally own a condominium while you lease an apartment. In this way, a condo is similar to a single-family home. You usually get a mortgage loan that pays for your purchase of the condo and you can sell it in the same way if you wish. When you pay on the loan, you build equity. When you live in an apartment, your monthly rent payments gain you no ownership rights to the property. Because of this, apartments offer a very poor return on your investment. Many people compare paying rent to throwing money away since the cash lines someone else's pockets rather than your own.
Functionality of Condo Units vs Apartments
The design and look of condo units and apartments are often very similar. However, you can renovate, repair, paint and otherwise improve the look and feel of your condo just as you would a house. You can also update your appliances and purchase units with the features you desire. With an apartment, you cannot typically paint rooms or make other significant changes without checking with the landlord. When considering the two options, you have to weigh your interest in fixing up the place to suit your particular tastes.
Costs of Owning a Condo
When you own a condo unit you have much more authority in the decisions that affect your property. Your power is not, however, unlimited. Condos typically have association boards or committees that manage the building and make important decisions on building renovations or repairs. You have a voice either by joining the board or participating in meetings. Condo owners pay quarterly or annual dues to support the building. This money is then used to mow the lawn, remove snow and repair the building's common areas. As an apartment tenant, you have little to no authority over your living space. You can make requests of the landlord, but you are usually at his mercy.
While your basic lifestyle won't change much between an apartment and a condo, your mental health might. People who own their homes tend to feel more connected to their community and experience a greater sense of safety and stability. No one can evict you from a home you own or decide to sell it out from underneath you. Your housing costs are more stable in a condo, as well, since you won't experience the annual rent increases common in apartments and you can deduct mortgage interest on your taxes.
People also often feel a sense of accomplishment when moving from apartment renting to owning a condo. Condo owners enjoy the pride of ownership in the same way as those who own single-family homes, whereas apartment renting is a common starting point for young adults. Though there is nothing wrong with renting an apartment, many people view it as a stepping stone rather than something to aspire to.
- Jim Miller New Hampshire Real Estate Services: Renting an Apartment vs. Owning a Condo
- Realtor.com: What Is a Condo? No, It's Not Just a Fancy Apartment
- Rent Lingo: Condo vs. Apartment: Which One Should You Choose?
- Credit Donkey: 23 Scientific Reasons Why Owning is Better than Renting
- Quartz: New Research Says It’s Better To Buy Than Rent—and It Has Nothing To Do With Money