While apartments and condos can look similar on the outside, the main difference between the two comes down to ownership. Whether you are a prospective buyer or renter, knowing what type of building you want to live in is a big decision. After all, this is the place you’ll call home – if not permanently, at least for the foreseeable future.
In this post, we are revealing the main differences between a condo vs apartment as well as associated pros and cons. Continue reading to discover the distinguishing factors between a condo and an apartment so you can make the best decision for yourself when it comes to buying or renting. In the interim, if you are a professional who needs furnished, temporary housing while you contemplate your decision to rent or buy, check out our accommodation offerings in North Carolina.
Key Differences: Condo vs Apartment
When it comes to ownership, the biggest difference between an apartment and condo is that a condo is owned by the individual unit owner while an apartment building is typically owned by one entity. This means that condo owners, such as yourself, are responsible for paying their own home insurance and maintenance fees. On the other hand, tenants of apartments pay rent to their landlord or company who owns the property. Other differences include how maintenance is handled, additional fees, and more which are discussed below.
Pros and Cons of Renting a Condo or Apartment
If you’re not ready to invest in real estate of your own yet, you’re likely contemplating renting from a landlord. Even if you have rented in the past or even currently rent, there are key factors to consider when contemplating renting either an apartment or a condo. In the following paragraphs, we will explain the differences you should know before deciding which type of space to rent.
While condos are typically thought of as individual units for sale, many condo complexes have units available for rent. However, the number of rental units are available on a limited basis. In contrast, an apartment will consist of individuals who are all renting the space in which they reside. In short, condo complexes will be comprised of a set number of renters while the remaining units are available for purchase by other individuals. Apartments are owned by a landlord or property management company who solely rents out each apartment unit.
Fees and Costs
When an individual applies to rent an apartment unit, a rental agreement is formed by the landlord or property management company. It outlines rental policies and associated fees. Typically, the rent cost includes the fee to inhabit the single unit, although other costs may be included in the rent price as well depending on the landlord’s contact. However, in most cases, the renter bears the cost of utilities, electricity, internet, etc. as a separate fee. Renters rarely incur a facility maintenance fee.
However, owners of a condo unit pay an HOA fee which goes towards up-keeping the amenities and on-site facilities, such as the clubhouse, apartment gym, pool, and landscape. To this end, condo facilities tend to be nicer than apartment facilities. However, this varies and largely depends on how the landlord utilizes HOA fees.
As previously mentioned, condo owners are responsible for maintenance fees and other fees that are commonly incurred as a part of owning a space. On the other hand, renters of an apartment building do not have to pay an additional fee when they experience a leak in the ceiling, malfunctioning plumbing, or have electrical problems. In this case, the landlord or property management company incurs the fee associated with fixing such issues. Whether you put in fifty maintenance requests or zero, your rent fee for the agreed upon term remains the same unless you damage something in the space by improperly using it.
Pros of Buying a Condo vs Renting an Apartment
There are certainly advantages to buying a condo compared to renting an apartment. If you are living in a city that you don’t want to call home forever, renting is probably the best option. However, if you want to live in the city you currently reside for at least ten years, purchasing your own space will be more profitable for you. Continue reading for a list of pros of purchasing a condo.
Obtain and Asset and Build Equity
Purchasing your own condo is very similar to buying a house. When you invest in real estate, you are building equity which means you own an asset that will increase in value as long as you continuing paying the mortgage and upkeep your unit. If the area you purchase a condo in gains in popularity, you may get the opportunity to sell your condo at a higher price than what you paid for it. On the contrary, the money you spend renting an apartment does not gain equity. The monthly rent is simply given to a landlord or property management company, and you won’t see a return on your money.
A Great Option for First Time Buyers
If you have never purchased a home or condo before, buying a condo is a great place to start. As we talked about, a condo unit comes with an HOA that maintains the amenities and facilities. All you have to do is pay the associated HOA fee and the surrounding space will be maintained for you. In other words, you don’t have to carve time out of your day to manicure the yard or clean the pool.
Pros of Renting an Apartment vs Buying a Condo
While buying a condo builds equity, you may not be ready to invest in a large purchase just yet. If you’re on the fence, we recommend playing it safe and renting until you’re 100% sure about purchasing a condo. In fact, there are many benefits of renting an apartment.
No Large Down Payment
When you rent an apartment, you simply pay an application fee, a deposit, and monthly rent. Thankfully, there is no down payment when renting an apartment unit. When an individual purchases a condo, the general rule of thumb is that 20% of the cost of the condo must be paid upfront. If the cost of the condo is $500,000, that’s a $100,000 down payment.
No Closing Costs
Similarly, when purchasing a condo, there is the associated closing cost fee to claim the space as your own. Typically, this fee is 3-4% of the cost of the condo. Using the same example of the $500,000 condo, this is a $15,000-$20,000 closing cost in addition to the down payment.
Maintenance is generally taken care of for you in an apartment building, whereas you are responsible for fixing any leaks and damage in a condo you own. However, bear in mind that you will be at the mercy and timeliness of your landlord, so make sure to read reviews before choosing to rent a certain apartment. In general, though, you will have less house and yard maintenance when it comes to renting an apartment.
Should You Buy or Rent a Condo or Apartment?
The decision to rent or own is a very personal one. Each has it advantages and disadvantages. When contemplating to rent or own, you should consider important factors such as your immediate and long-term finances, desired standard of living, and ability to maintain your own space. In the meantime, if you would like to opt for a furnished apartment or a short-term rental in NC, we can find the perfect space for you. Contact us today at 336-299-1312 or fill out the form below to learn how we can help!