Condo Vs. Apartment – What Works Better for You?
Is this a question that’s been on your mind lately?
If you are considering renting an apartment or buying a condo, you have definitely come across these terms. And, like many people, you may be under the impression that the words are interchangeable.
However, a few salient differences exist between a condo and an apartment. And where you live might depend on knowing the best option for you. Let’s talk about condos and apartments and why they are not precisely the same.
What’s Common Between Condos and Apartments?
Both condos and apartments are Individual units in a residential building or complex comprised of multiple residential units. Aside from structural commonalities, they often have similar amenities and benefits, such as swimming pools, trash disposal, green spaces, a fitness center, etc.
And the Differences
The most significant difference between a condo and an apartment is the ownership of the residential units. Condos are almost always owned by the people who live there, while apartments are rented by tenants who pay a rental fee to a landlord.
Other differences exist in management, amenities, maintenance, rules, and costs.
According to Canada Mortgage and Housing Corporation, a “condominium” refers to a form of legal ownership instead of a construction style.
Condos come in all sizes and styles, from standalone houses to high-rises, and have diverse features that fit into a wide price range. There are mixed-use condominiums that are a mix of residential and commercial buildings.
What Do You Own in a Condo?
Condo owners own an individual “unit” registered in their name. They also share responsibility and ownership of the common elements and areas of the building and community. Shared amenities include lobbies, hallways, elevators, recreational facilities, walkways, gardens, etc.
High-end condo buildings provide luxury amenities like an indoor swimming pool, tennis courts, concierge services, valet parking, etc. Some condos offer more space for the sole use of an individual condo owner. Balconies, parking spaces, storage lockers, driveways, and lawns are common examples.
Taxes, Mortgages, and Other Fees
As a condo owner, you pay property taxes on your condo. This gives you a chance to build equity that can be leveraged towards the down payment for your next house.
In addition, you also pay Homeowner’s Association (HOA) fees and condo fees.
Condo maintenance fees are monthly payments that condo owners pay to the property management company or the condo association to maintain the building and the condo grounds.However, maintenance issues within the unit are not usually covered here.
HOAs are formal legal entities established to maintain the property’s quality and value and ensure compliance with their internal rules and obligations. Each condo community has different structures for determining monthly HOA fees. Always remember that you must pay HOA fees and adhere to their regulations.
An apartment is a rented unit in a residential building that is wholly owned by a landlord (often a corporation), or a property manager.
All the units are the same in an apartment complex, and you follow the same rules as all the other tenants. Every tenant, who is part of the apartment community, interacts with the same property manager, who handles rental policies and other issues with the apartment building.
Generally speaking, renting an apartment is a straightforward process.
At the beginning of the lease period, you typically pay a security deposit; though the property owner may require you to pay one month’s rent upfront. You then pay a monthly rent for the term of your lease agreement.
Apartment Amenities and Maintenance
An Apartment complex usually provides some basic amenities. Free parking, laundry facilities, Gym, and a Community room are some apartment amenities that may be included in the monthly rent.
Rental policies detail noise limits, and rules for pet owners, or guests’ policies. They dictate what an apartment renter can do in the common areas and inside their rental property. Failure to follow these rules in the apartment building can lead to severe consequences.
However, apartment pros include low or no apartment maintenance charges, as these are usually taken care of by the property managers. Apart from the rent, there are no maintenance fees or homeowners association fees, either.
Condo vs Apartment
Now that you have a better idea of what condos and apartments are, here is a list of pros and cons to help you decide which would suit you better.
A Condo is more affordable than a single-family home or a property with comparable features. An excellent option for first-time homebuyers, condos are a good bet for anyone who plans to stay in one place for some time or wants to begin building equity with property ownership.
For people who like customized living spaces and a social lifestyle, condo communities can be the best combination of privacy, security, and amenities.
Apartment communities offer greater flexibility when changing houses and easier moving. Apartments are a good option if you don’t want to worry about repairs and maintenance; either the owner or the leasing office will take care of any issues.
Your financial situation has a significant bearing on whether you rent an apartment. Renting an apartment is a good idea if you have just started earning and don’t have enough savings for a down payment. You have to pay application fees, a security deposit of about one month’s rent and the monthly cost of the rent agreed upon.
The Cons of Condo Living
Along with a down payment, you must pay closing costs (about three to four percent of the purchase price) and a home inspection fee when buying a condo. Moreover, a condo attracts monthly HOA dues and maintenance fees, even if you do not use the shared facilities.
The condo owner is responsible for solving any issue that may crop up in the condo, such as a leaky faucet or a broken kitchen appliance.
Apartment Living – What Can Go Wrong?
Apartments are not known for luxurious amenities – you are better off buying or renting a condo. There is usually no difference in the design or layouts of units in the same building, which can be pretty dull for someone who loves individuality.
When renting an apartment, you often do not know the owner personally, which can make communication difficult sometimes. In addition, there are often restrictive policies in place, such as picking up pet waste, limitations or prohibitions on noise, hanging personal items in windows, etc.
Let’s Sum Up What We Know Now
The answer to condo vs apartment can vary depending on whether you have the resources to buy a condo and your lifestyle.
Investing in real estate and becoming a property owner has many advantages; owning a condo is an easy way to start building your portfolio. Before buying one, ensure that the monthly condo fees are realistic, what they include, and if they’re likely to increase. According to wowa.ca, the median price of a condo in Toronto increased by 3% year-over-year to $731k.
If your savings are not enough for the payments, or you are likely to keep shifting often, a rental unit in an apartment building is the best option. Apartments for rent are typically located in affordable neighborhoods and are usually professionally managed. In Toronto, the rent for one-bedroom and two-bedroom apartments has seen a steep jump in 2022, as more people opt to rent rather than buy homes. TRREB estimates that the average rent for two-bedroom apartments is $2979, with the situation not likely to ease up any time soon.
Carefully consider your short-term and long-term goals before making your choice between a condo vs an apartment. If you need help, contact a reliable real estate brokerage, who can help you make up your mind.