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Home Buying

Condo vs. Apartment: What’s the Difference?

Looking for a new place to live, and you want something that’s cheaper and less work than buying a house? A condo or an apartment could be a great option for you!

But when it comes to a condo versus an apartment, what’s the difference? And which one is better? Let’s walk through everything you need to know about condos and apartments—plus how to decide which one is right for you.

What’s a Condo?

Condo is short for condominium—and that sounds sort of like minimum, doesn’t it? That’s a great way to think about condos: They let you own a home with minimum maintenance and outdoor space.

When you buy a condo, you own the interior of your living space . . . and that’s it. You don’t own the building exterior, shared spaces like hallways and clubhouses, or any land around it. Your condo will likely be in a building with lots of other condos, and they could each have a different owner.

What’s an Apartment?

At first glance, an apartment is a lot like a condo. There are usually multiple units in a single building, and you’ll have access to shared amenities, like a clubhouse or swimming pool.

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The difference comes down to ownership: You don’t own your apartment. You pay a monthly rent to the landlord or property management company that owns all the apartments in the building.

Condo vs. Apartment: What’s the Difference?

The main difference between a condo and an apartment, like we just went over, is ownership: You can buy a condo, but you can only rent an apartment. But there are a few other differences too.

For example, people tend to live in condos longer since they own them. And if you take out a mortgage to buy a condo, you’ll likely pay more per month than if you rented a similar apartment.

Most people rent apartments for a short time—just until they buy their own place or move to another apartment that better suits their needs. Apartments are also typically lower maintenance than condos.

What to Look For in a Condo vs. an Apartment

When you’re choosing between a condo and an apartment, it pays to look at factors like cost, responsibilities and amenities. You need to know what you’ll get for your money so you can decide if it’s worth it.

Here are some things to consider:

Cost

When you rent an apartment, you agree to pay a monthly rent for a certain period of time—usually a year. The median monthly rent for a two-bedroom apartment was $1,348 in October 2022.1

You may also have to pay a security deposit. That could be anywhere from 1–2 months’ rent. The landlord hangs onto that money until it’s time for you to move out. That way, if you damage the apartment, they can pay to fix it.

With a condo, you’ll have similar costs to buying a house. You’ll need to make a down payment (we recommend at least 5-10% if you’re a first-time home buyer). You’ll also have to pay closing costs when the sale is final. Then, you’ll have a monthly mortgage payment until you pay off your condo.

In August 2022, the median price for a condo was $333,900. For comparison, the median sale price for a single-family home was $398,800.2 Since condos are cheaper, more people want to buy them—which is why condo prices hit record highs in 2022.3

Let’s dig into the math so you can see how that all works out if you get a 15-year fixed-rate mortgage (which is the only kind of mortgage you should ever get) and put 20% down.

 

Condo Costs

Total Value

$333,900

Down Payment

$66,780

Interest Rate

6.15%4

Monthly Payment

$2,276

Of course, your payment will depend on your condo’s size and location. The one exception? Some people pay cash for condos. They’ve saved up or have money left from a previous home sale. That’s a really smart move, because then you never have to worry about a monthly payment.

Homeowners Association Fees

Most condos have a homeowners association (HOA). The HOA is a group of people who live in the condo community and help set the rules everyone has to follow. They also collect fees from each condo owner—usually called “condo fees”—that they use to maintain the building exterior, hire landscapers and so on.

Condo fees can be pricey—the average is close to $300 per month!5 And you’ll pay that on top of your mortgage, insurance (more on that in a sec) and other costs.

Apartments, on the other hand, don’t have HOAs. Instead, the landlord or property manager factors maintenance costs into your monthly rent. That’s good news if you want to save a little money every month (or if you don’t want to be bossed around by an HOA and their stuffy rules).

Location

Condos and apartments are both easiest to find in bigger cities. But when it comes to small towns and rural areas, you’re more likely to find an apartment than a condo.

In any city, consider the location of a condo or apartment carefully before you move in. Do some research and see if the place you’re looking at is close to your work, your kids’ schools, or your friends and relatives. You’ll also want to double-check how safe the neighborhood is, and how far you’ll be from the nearest grocery stores and restaurants.

Insurance

You’ll need to have insurance for both condos and apartments—but not the same kind.

With a condo, your HOA will insure the building exterior and shared spaces. But you’ll still need a homeowners insurance policy—called condo insurance—to cover damage or theft inside your home. (It’ll also cover liability lawsuits if someone gets hurt in your condo.)

Condo insurance costs around $512 per year on average.6 But remember, you could pay more if you live in an expensive state (like California) or a super fancy condo. On the flip side, your rate could be lower if you live in a cheaper state (like South Carolina) or choose a smaller, simpler condo.

When you rent an apartment, your landlord insures the building and property, so you only need to purchase renters insurance. It’ll cover the costs to repair or replace your belongings if they get damaged, destroyed or stolen. Renters insurance is more affordable—around $174 a year.7

Maintenance Responsibilities

Condos don’t just cost more—they’re also more work! Since you own the interior of your condo, you’re responsible for maintaining that space. Bathtub springs a leak? Toilet won’t flush? Kitchen cabinets outdated? That’s all you!

With an apartment, your landlord typically has to fix anything that breaks or hire someone to do it for you. That said, your lease may require you to handle certain issues. Or you may run into crummy landlords who don’t want to fix things.

It’s up to you to find out how well (or poorly) the landlord maintains the apartment before you move in. You should also check your lease to figure out what your responsibilities are.

Amenities

Here’s one area where apartments and condos are more alike than they are different. Apartments and condos offer many of the same amenities. Some common ones include:

  • Covered parking
  • Dog parks
  • Playgrounds
  • Walking paths
  • Swimming pools and saunas
  • Gyms and sports facilities
  • Security measures, like gates and cameras

Just keep in mind, the amenities you get depend on where you live and how much you pay. So if you really want a pool or you’ve got to have a coworking space, choose wisely!

Pros and Cons of a Condo vs. an Apartment

Okay, so we’ve covered the main differences between apartments and condos. But what are the perks and pitfalls of each one? Let’s weigh the pros and cons so you can get a better idea whether you’d prefer a condo or an apartment.

Condo Pros

  • Ownership: You can actually pay off your condo and own it outright. That means no more monthly mortgage payments!
  • Rental opportunities: Some condo communities will let you rent out your condo if you live there seasonally or want to use it as an investment property.
  • City living: Since condos are most common in cities, you’ll be closer to restaurants, shopping centers, entertainment venues and other fun places to visit.
  • Cheaper than other housing purchases: Condos cost way less than buying a house or a townhome.
  • Low maintenance: With a condo, you don’t have to worry about mowing the yard or cleaning the pool. You just have to take care of the interior space in your home.

Condo Cons

  • HOAs: An HOA means more money out of your pocket and more people in your business. You’ll always have those fees and rules hanging over your head—even after you pay off your condo.
  • Lack of privacy: Your home attaches to someone else’s. Shared walls and living areas mean you can’t get away from your neighbors. And leaving a bad situation can be hard, because you either have to sell your condo or find a renter . . . if renting out your condo is even an option.
  • Limited locations: Condos are difficult to find in rural areas and small towns, so if you’re looking for country living, a condo probably isn’t for you.
  • More expensive than apartments: Unless you rent a luxury apartment for decades, condos almost always cost more.

Apartment Pros

  • More flexibility: Want to move? No sweat! Your lease will end soon—or you can pay a lease-break fee and bail out early. That’s a level of freedom condos don’t offer.
  • Cost: Apartments are way cheaper than condos (and most other housing options for that matter). That gives you a chance to save for a house while you rent.
  • Low or no maintenance: You’ll have even fewer maintenance worries with an apartment than with a condo—score!
  • Location: Like condos, you can find apartments close to shopping centers, restaurants and attractions. But you can also find a few apartments in smaller or more rural communities if that’s your thing.

Apartment Cons

  • Lack of ownership: At the end of the day, your apartment isn’t yours. You can’t decorate the interior the way you want, like you could with a condo. You have to follow the landlord’s rules.
  • Lack of privacy: Again, you’ll share walls with your neighbors . . . but apartments may have fewer rules about noise and community living.
  • Higher turnover: For most people, apartments are a short-term housing option. That means you’ll have lots of new neighbors coming and going. So it’s harder to get to know people, and people may be less considerate since they’re not planning to stick around for long.
  • Fewer perks for your money: Condos use HOA fees to pay for all their fun amenities. Since you’re not paying those fees in an apartment, you may have fewer perks than a condo of similar quality.

Which Is Right for You: Condo or Apartment?

We’ve gone over a lot of info, so let’s review. This handy chart breaks down everything we’ve talked about when it comes to comparing condos to apartments.

 

Condo

Apartment

Type of Ownership

You own it.

A landlord or leasing company owns it—you rent it from them.

Average Payment

$2,925*

$1,348

Other Initial Costs

Down payment and closing costs

Security deposit of 1–2 months’ rent

Maintenance

You take care of your condo’s interior. Your HOA oversees the building exterior and shared spaces. 

The landlord covers most or all maintenance.

Common Amenities

  • Covered parking
  • Dog parks
  • Playgrounds
  • Walking paths
  • Pools and saunas
  • Fitness areas
  • Security features
  • Covered parking
  • Dog parks
  • Playgrounds
  • Walking paths
  • Pools and saunas
  • Fitness areas
  • Security features

*How did we get $2,925? $2,276 mortgage payment (15-year fixed-rate, 20% down, 6.15% interest) + $300 condo fee + $43 for condo insurance + $306 in property taxes.

At the end of the day, whether you buy a condo or rent an apartment depends on how you feel about those pros and cons. It also depends on your financial situation.

If you have nonmortgage debt—like a credit card balance, a car payment or student loans—you should rent until you pay it all off. You should also rent until you save up an emergency fund worth 3–6 months of your typical expenses and you can make a strong down payment of at least 5–10%.

And trust us: There is absolutely nothing wrong with renting, especially if you’re working really hard to pay off debt, build up that emergency fund, or save up a down payment. It will give you some wiggle room in your budget and keep you from buying a house when you can’t actually afford it.

But if you’re debt-free, have an emergency fund, and are ready to make a good down payment, buying a condo could be a great idea for you and your family. Just make sure your monthly payment, including HOA fees and condo insurance, is less than 25% of your take-home pay.

In general, condos tend to be best for people who:

  • Are downsizing
  • Are ready to buy their first home
  • Want to do less home maintenance
  • Are seniors who want to live independently
  • Are debt-free with a full emergency fund

And apartments are typically best for people who:

  • Are saving for a house
  • Are working to pay off debt and build an emergency fund
  • Want less responsibility
  • Plan to relocate within the next few years
  • Are single and still deciding where to settle down
  • Want to get to know the area before they buy a place

Choosing Between a Condo and an Apartment

Whether you know exactly what you’re looking for or you want some help nailing down the details, you need to get a RamseyTrusted agent on your side.

Our top-notch agents in your area are experts at helping folks find the perfect place to fit their needs. They’ll serve you with excellence from start to finish and help you make the best choice on where to live.

Connect with a RamseyTrusted agent today!

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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