Condo vs Apartment: 7 Key Differences, Pros and Cons

What are the Differences Between Condos & Apartments?

Should you rent or buy? Essentially, that sums up the difference between a condo vs. apartment, but there's more to it than that. While it's almost impossible to tell between a condo and an apartment from the outside, they both have distinct characteristics that can impact your lifestyle, finances and overall living experience.

So, if you're wondering what the difference is between condos and apartments, read on for expert advice from our team of RE/MAX real estate agents and multi-family specialists today!

What is a Condominium?

A condominium, or condo, is a residential property where each unit is individually owned. Condo owners hold a deed to their specific unit and share ownership of common areas such as lobbies, hallways, and amenities with other unit owners. This shared ownership is typically managed by a condo association or board, which oversees the maintenance and upkeep of these common areas which is paid for via condo fees.

What is an Apartment?

In contrast, an apartment is a rental property where tenants pay monthly rent to occupy a unit within a larger building or complex. Apartments are usually owned by a single entity, such as a property management company, which handles all aspects of property maintenance and tenant relations. This means that apartment renters do not have ownership rights and are subject to the terms of their lease agreements.

Types of Parking

A key difference between apartment buildings and for-sale condos is the available parking type. Since an apartment is a rental, you often find a variety of parking options that may include:

1. Shared underground or outdoor parking where it’s first come, first serve
2. Limited parking where there are only a certain number of spots available for residents
3. Street parking which is more common in smaller, older developments where residents have to park streetside as there are no stalls on the property

These different parking options can significantly influence living arrangements, offering more flexibility in apartments compared to condos. As discussed in another article on parking in condos, there are three main types: titled, leased, and assigned. The main difference is more or less explained in the name (see our blog for more tips).

Property Management Style

Condos and apartments utilize different management systems, which is a key difference to consider when choosing which is best for your goals.

Professional property management companies manage apartments and care for everything from collecting rent to performing maintenance. Their team of staff usually include property managers, maintenance teams and leasing agents, creating a streamlined management system for any apartment complex.

Conversely, in condos, owners are responsible for managing their units including maintaining and upkeep of the interior and outdoor living spaces. Usually, anything inside the walls is the owner’s responsibility, but this can change depending on the type of development. For example, in some row townhouses (also with a condo bard), the owners are responsible for any furnace vents despite being inside the walls, as they connect to the utility room inside the unit.

Additionally, condos often include concierge services as part of their management system, enhancing the living experience. So, carefully read any building’s bylaws before buying to fully understand what is and isn’t your responsibility.

Cost of Living

Costs are an important consideration when choosing a condo vs. apartment, especially for those with budget limitations or preferences on maintenance and upkeep.

Living in an apartment, you’ll have to cover monthly rent, the security deposit, renter’s insurance, and any utilities that aren’t included. In many instances, sewer and water are covered by your rent, while natural gas and power are not. According to rentals.ca, the average rent for a one-bedroom condo in Calgary was $1,583 a month. Other costs, for example, include a $1,583 one-time deposit, $150 for gas and power, and $40 for renter's insurance.

Condo ownership often comes with more costs, including mortgage payments (and interest), property taxes, condo fees, monthly fees for the upkeep of common areas, utilities not covered by the condo fees, homeowner’s insurance, and maintenance/upkeep of the unit. Additionally, HOA fees can be unpredictable and may increase over time, representing hidden expenses that can impact your overall financial planning. An estimate of these costs for the same one bedroom/bath unit in Calgary, for example, could include $1,300 (mortgage), $220 (property tax), $200 (condo fees), $200 (sewer, water, gas and power), and $80 (insurance). However, remember that when you own a condo, you build equity through your mortgage.

When weighing out the cost differences between condos and apartments, it’s important to consider the local real estate market. For example, in some markets, rental vacancies may be high, meaning rent costs are likely lower. If mortgage rates are high, buying a condo may be more costly than renting an apartment.

Owning vs. Renting: Pros and Cons

Another critical consideration of condos vs apartments are the pros and cons between owning and renting. Focus on your long-term financial goals; if building equity is essential, you'll want to consider buying. Additionally, in strong residential real estate markets, it is not uncommon for property values to increase over time, which can help negate any interest paid as part of your mortgage. Sometimes, a condo's value gain rises so much that it offsets high interest rates.

Renting an apartment may be ideal if you need to be flexible with your living arrangement and move out quickly, or are concerned about your financial security over the long term. This way, you'll have peace of mind knowing you're not locked into a mortgage and can change your plans quickly without stressing about money.

As mentioned above, the costs associated with renting an apartment vs. buying a condo should be considered before choosing what best suits your wants, needs, and lifestyle – which brings us to our next tip.

Maintaining Your Condo or Apartment

Renting an apartment comes with peace of mind knowing that when something does break, like the fridge or toilet, it’s not necessarily your responsibility to fix it (unless you purposefully damaged the landlord's property, that is). Tenants must submit a maintenance request to the property manager who handles all repairs, common-area upkeep, and landscaping – costs that are already factored into your rent.

For condominiums, maintenance responsibilities are split between the condo corporation and unit owners. The condo corp maintains common areas such as lobbies and hallways, exterior features such as cladding and windows, and anything inside the walls of the unit, while owners are responsible for everything outside the walls inside of their condo unit. This means condo owners must budget for routine maintenance and unexpected repairs.

Lifestyle Considerations

Choosing whether to rent an apartment or buy a condo often reflects your current lifestyle and future plans. For example, renting offers flexibility; you could easily relocate to another province or state with no financial commitments like a mortgage weighing on your decision to move. This is why apartment living is often great for younger adults who are experiencing life to the fullest as they look to develop their careers, travel, and enjoy themselves.

Conversely, condo ownership is often ideal for those looking to put down roots and are ready to step into home ownership. Owning a condo could be vital for you, especially if you plan on having children and need a stable, guaranteed place to live. If renting an apartment, for example, your landlord could force you to move at any time, which could be inconvenient, especially if a baby is coming soon or you have young toddlers or newborns. Condo living offers benefits like equity building, access to shared amenities, and community interaction, but it also comes with financial responsibilities and lifestyle adjustments unique to condo life.

Living Space and Amenities

Regarding living space and amenities, condos and apartments can offer different experiences. Condos often provide more spacious units, allowing owners to customize their living space to suit their personal preferences and needs. This can include renovations, interior design changes, and other modifications that enhance the living experience.

On the other hand, apartments typically have more standardized units, with renters having limited ability to make changes. This standardization ensures consistency across the entire building, but it can also mean less personalization for tenants.

Both condos and apartments may offer a range of amenities such as swimming pools, fitness centers, and community spaces. However, the quality and availability of these amenities can vary greatly. Condos might offer more luxurious amenities, as condo owners typically contribute to maintaining and enhancing these shared spaces through their condo fees.

Apartments, managed by property management companies, also provide amenities, but the level of luxury and maintenance can differ depending on the management company and the rental market you're in.

Tax Implications

The tax implications for condo owners and apartment renters are quite different. Condo owners can benefit from several tax write-offs including mortgage interest, property taxes, and condo fees if there is a home office in the unit. These deductions can significantly reduce taxable income, resulting in substantial financial savings.

Apartment renters, however, do not have access to these tax benefits. Rent payments are not tax-deductible for residences, and renters cannot claim deductions for property taxes or maintenance costs.

However, tax implications vary from region to region. Understanding the specific tax implications of condo ownership or apartment renting in your area is crucial. Consulting with a tax professional can provide personalized advice and help you make an informed decision based on your financial situation and long-term goals.

Dawn of Mixed Developments

Today, many developers are opting for mixed-use projects where you’ll find both rental and for-sale units. Therefore, if you’re a condo buyer, you’ll want to distinguish what types of units are found in a building before signing any purchase contract, as this could affect its appeal as a place to live over the long term.

When it comes to condos vs. apartments, the latter often has a higher turnover rate, and in some cases, renters may not be as respectful of the building’s bylaws as they do not have any invested financial interest in the property.

Condos vs. Apartments: What's Best for Your Goals?

When deciding between a condo and an apartment, it’s crucial to consider your long-term goals, financial situation, and lifestyle preferences. If building equity and establishing a home base for the family are priorities, condo ownership offers the opportunity to invest in your future while having control over your living space.

Condos offer unique benefits such as individual ownership, potential for property value appreciation, and a variety of amenities. Additionally, condo pros include affordability, equity building, and tax benefits compared to renting or owning a single-family home. On the other hand, if flexibility and minimal responsibility are important to you, apartment living provides the freedom to move easily and avoid maintenance costs.

Consider consulting with a real estate professional who can help evaluate your specific circumstances and local market conditions to make the best decision for your future. Remember, there’s no universal “right choice” – the best option is the one that matches your real estate goals best.