Condo vs Apartment: What Are the Differences?

By Kenny Zhu · March 08, 2022 · 8 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

Condo vs Apartment: What Are the Differences?

If you’re browsing the market for a rental, you’ve likely encountered a dazzling array of condos and apartments. During your search, you’ve probably wondered: “What is the difference between a condo and an apartment?”

Both apartments and condominiums share quite a number of traits but differ in ownership. Apartments are typically large residential complexes owned by a company and operated by professional property managers. Condos are also usually located in large residential complexes, but each condo unit is typically owned by a private owner who doubles as your landlord.

The question of condo vs. apartment gets more complex if you’re debating whether to buy a condo or rent an apartment.

What Is a Condo?

A condo is a residential unit within a collective living community, where each individual condo is owned by a private owner, but the cost of maintaining communal areas is shared by all owners.

While condos are often located in high-rise buildings, they can also take the form of a collection of standalone properties, each designated a “condo unit.”

One benefit to renting a condo is that they’re often close to restaurants, offices, and stores. They also allow you to deal directly with your landlord rather than a management office, which may mean more personalized attention for your needs.

For buyers, the entry price can be significantly lower than the cost of most single-family houses.

What Is an Apartment?

An apartment is commonly known as a rental unit within a building, complex, or community that typically is managed by a property management company, which serves as both landlord and leasing agent for all of the units on the premises.

(In big cities, “apartment” is sometimes used as shorthand for a condo or co-op unit. If you’re choosing between a co-op and a condo to rent or buy, you’ll want to know how they differ, and whether you’re ready to buy an apartment.)

Rental apartments may be located in high-rises but can also be found in larger homes that have been subdivided into separate units.

Apartments usually offer greater mobility than other property types, which makes them a flexible option if you’re only planning on staying in an area for a couple of years. A full-time management office or private landlord takes care of leasing, rent payments, and repairs.

Where They Differ

Now that we’ve covered the condo vs. apartment basics, let’s dive deeper into some key dimensions in where they differ.

Ownership

Each unit in a condo development is usually owned by a private homeowner, who may or may not double as its landlord.

By contrast, apartments are often managed by a property management company that also owns the apartment complex. Effectively, this makes the company the landlord for the entire property.

Condo ownership

Apartment ownership

Private owner and possibly also landlord Property management company with full-time leasing & maintenance staff

Unless the condo owner retains the services of a property manager, prospective renters can expect to deal with the condo owner themselves when it comes to rental applications, monthly rent payments, and any maintenance issues that arise over the course of their lease.

Prospective apartment tenants will usually submit their application and rent payments through the apartment leasing office, while full-time maintenance staffers are on call to deal with any repairs.

Some landlords may be amenable to your desire to negotiate rent in order to take you on or keep you. Paring the rent is the main goal in such a negotiation, but you can always ask for other benefits in lieu of a rent reduction.

Property Taxes

Renters aren’t responsible for property taxes when it comes to both condos and apartments, making them a non-issue in the apartment vs. condo choice.

However, if you’re deciding whether to purchase a condo, understand that you’re responsible for paying property taxes for your unit every year. If you decide to rent your condo out, you should also expect to be taxed on any rental income you collect.

Design

Condo design

Apartment design

Design and appliances vary widely from unit to unit depending on owner’s choice Uniform design and appliances across all units within a building

Regardless of structure type, condo owners retain the right to make cosmetic adjustments to the interior of their properties, so renters can usually expect more variety when condo shopping. This also applies to things like appliances and materials.

Apartments typically take the form of multiunit buildings or small housing collectives, but usually share similar, if not identical, layouts and designs regardless of which unit you choose.

Amenities

The amenities of both apartments and condos vary widely and often depend on when and how they were built.

We’ve listed some common amenities that are offered for each; keep in mind that there’s often overlap:

Apartment amenities

Condo amenities

Fitness center

Laundry room

Community room

Parking space

Community pool

Park & playground

Generally speaking, condos are more likely to offer customized amenities, like state-of-the-art appliances and granite countertops, that reflect the tastes and habits of their owners. Condo owners are incentivized to make improvements, as it allows them to charge more.

By contrast, apartments are more consistent in design and quality across units. In big apartment complexes, each unit is usually a copy of its neighbors. Depending on your tastes and budget, you can find a variety of apartment types, from luxury to economy.

Fees

Apartments and condos of similar quality and in the same area should rent for around the same cost.

Both condos and apartments often charge the following fees:

•   Application fee

•   First and last month’s rent

•   Security deposit

•   Credit and background check

•   Pet fees and deposit

•   Parking fee

Renters may find that condo owners may be more willing to negotiate on things like fees than apartment management teams, as these are private owners trying to keep their units rented out for income purposes.

A buyer of a condo will pay monthly fees that may cover insurance for and maintenance of common areas, water and sewer charges, garbage and recycling collection, condo management services, and contributions to a reserve account.

Community

Condos usually have a greater sense of community than apartments, given that their residents are likely to stay around longer. In many cases, residents consist of the condo owners themselves.

By contrast, renters living in apartments often intend to stay for only a couple of years. While that’s not to say that there aren’t occasional resident get-togethers at some apartment complexes, you’re less likely to encounter the same faces over several months.

If you’re renting a condo, expect to abide by rules set by the homeowners association. These can sometimes be fairly strict. Apartments have their own set of rules that may be less stringent.

Renting and Financing

Financing a condo allows you to lock in your monthly mortgage payments at a steady long-term rate and gives you the chance to start building equity. In exchange, you’ll be required to make a down payment and be responsible for any taxes, insurance, and HOA fees, among other costs.

By contrast, renting an apartment involves one monthly rent payment, in addition to any utilities you’re responsible for. Of course, when you leave the apartment, you leave with just your security deposit, if all payments have been made and no damage has been done.

Deciding whether it’s better to buy a condo or to rent — or to get a house or condo — are complicated decisions that depend on your personal finances and your lifestyle. If you’re thinking about settling down, have a stable job with steady income, and have enough saved up for a down payment with cash to spare, buying a condo or house may be the right choice for you. However, if you’re still exploring, have variable income with limited savings, and are not sure whether you like an area yet, it may be best to continue renting.

For those trying to decide between renting an apartment and financing a condo or house, this mortgage help center can help provide answers.

Maintenance

Condo rental maintenance

Apartment maintenance

Landlord hires third-party contractors to make repairs On-site maintenance staff makes repairs

Most apartments have an on-site building supervisor who can address maintenance issues. Given that the owner of a large apartment complex oversees all of the units, they’re incentivized to employ someone full time to attend to the day-to-day affairs. This often means that apartment owners can react faster than condo owners, who sometimes don’t even live on the premises.

By contrast, condo units are usually owned by landlords, and most of them hire a third-party contractor to come in and make repairs as necessary. In some cases, condo owners may be handy and handle the repairs on their own.

If you buy a condo, you’ll have a regular maintenance fee that covers the shared parts of the property, but because condo owners typically own just the interior of their unit, any repairs in the condo unit will be separate. (It’s a good idea to pore over the covenants, conditions, and restrictions to see exactly what is part of your unit or part of the common elements.)

Rules

In terms of rules, every condo landlord is likely to have a different set of rules. However, there are some rules set by the condo board that apply to all residents and common areas, typically in the form of noise restrictions, pets, conduct, and trash pickup.

By contrast, apartments typically have a uniform set of guidelines that apply to all residents. The rules usually are stricter regarding smoking, pets, and modifications you can make to the apartment.

Condominium vs Apartment: A Side-by-Side Comparison

To help sum it all up, here’s a table comparing the condo and apartment traits discussed above.

Condo

Apartment

Ownership Private owner Property management company, if a large complex
Property taxes Paid by condo owner Not applicable
Design Customized by owner Uniform across all units
Amenities

Parking space

Community pool

Green space

Fitness center

Laundry room

Community room

Sometimes a pool

Fees

First and last month’s rent

Security deposit

Credit and background check

Application fee

First and last month’s rent

Security deposit

Pet fees

Community Typically condo owners and long-term residents Typically shorter-term renters
Renting & Financing

Condo renters:

Monthly rent

Utilities

Condo owners:

Mortgage payment

Utilities

Property taxes

HOA fees

Insurance

Monthly rent

Utilities

Maintenance Private owner hires third-party contractors for repairs and maintenance On-site maintenance staff

Condo vs Apartment: Which One May Be Right for You?

Whether a condo or apartment is right for you depends on your preferred rental experience. If you’re looking for something that feels a little more akin to home and don’t mind dealing directly with your landlord when discussing repairs and rent payments, a condo may be the better option for you.

On the other hand, if you prefer dealing with a full-time staff of property managers, want something more structured, and don’t mind cookie-cutter corporate apartments, an apartment may be the better rental option for you.

Prospective condo buyers will also want to keep their finances and monthly budget in mind when deciding if they want to rent or buy. While the idea of building equity is appealing, it’s not for everyone. You’ll want to thoughtfully evaluate your ability to make monthly payments and whether you want to stick around an area.

The Takeaway

In the condo vs. apartment comparison, you’ll pay similar costs when renting properties of similar quality. Things get more complex if you’re debating whether to buy a condo or rent an apartment, as there are myriad added costs for condo owners in exchange for the chance to build equity.

If you’re in the market to buy a condo, getting a quick rate quote may lead to getting a mortgage with SoFi.

SoFi’s line of fixed-rate mortgages are available for primary residences, second homes, and investment properties, including condos.

FAQ

Why are condos more expensive than apartments?

In general, condos and apartments of comparable quality cost around the same amount to rent.

A condo owner, however, will likely face higher monthly costs than an apartment renter, thanks to the added costs that come with owning a property, including mortgage payments, taxes, insurance, and HOA fees. Over time, the added expense may be offset by the equity built through mortgage payments.

Which retains more value, condos or apartments?

Over the long run, buying a condo will retain more value because of equity build-up. However, unless you plan to own the condo for several years, renting an apartment may save you more money in the short run because renting avoids the ownership and closing costs that come with buying a condo.

Can I get a loan to buy a condo or co-op apartment?

A qualified buyer can finance a condo with a government-backed or conventional mortgage loan.

Getting a loan for buying into a housing cooperative is more difficult. The buyer is purchasing shares that give them the right to live in the unit — personal property, not real property. That’s one reason that most lenders do not offer financing for co-ops, and the few that do may restrict where they lend.


Photo credit: iStock/Michael Vi

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SOHL1221096

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store
SoFi Android App, Get it on Google Play

TLS 1.2 Encrypted
Equal Housing Lender