What’s the Difference: Condo v

The difference between a and an apartment complex is purely legal: there is no way to know a condominium from an apartment simply by looking at or visiting the . What defines a condominium is the form of .

The same building developed as a condominium (and sold in individual units to different owners) could actually be built someplace else as an apartment building (the developers would retain ownership and rent individual units to different tenants). As a practical matter, though, builders tend to build to higher quality standards than apartment complexes because of the differences between the rental and sale markets.

If multi unit living is a good fit for you, when should you BUY that condo or RENT that apartment? Here are some things to consider:

1. The value of a condominium can appreciate at a greater or lesser rate than a , depending on your area and the local trends. It’s a better investment than simply pouring rent payments into your apartment ’s pocket, but may or may not pay off more than a . Over the long haul, do tend to appreciate more than condominiums. However, in certain (usually more urban) areas, condominiums are becoming so popular that you may be able to make some money on yours, particularly in the short term.

2. Hidden Costs. While affordability and the potential for appreciation can be some major advantages of condominium ownership, don’t forget that you’ll also be paying taxes on the condominium space. In addition, you’ll have to pay membership dues and possibly maintenance to the homeowner’s association (HOA) that manages the condominium space.

3. Moreover, the HOA fees you pay will probably not cover all maintenance costs for the condominium. In an apartment situation, your landlord is responsible for charging a rent that will cover the costs of providing maintenance services for apartment residents. However, in a condo, it may be your responsibility to pay for painting or repairing the exterior of your own unit—and the HOA will likely hold you to high standards when it comes to maintaining the attractive appearance of your condo. 4. Although you “own” your condominium unit, keep in mind that a condo is more like an apartment in that you cannot make major changes to the living space. Your HOA is not likely to want you to alter the consistent layout or appearance of your condo unit, and you agreed to the HOA’s conditions when you signed your condo . If you’re a gung-ho remodeler or just like to make independent decisions about the property you own, buying a home may be a better choice for you than buying into a condominium and all that comes with it.

5. Privacy and personal freedom. Just as in an apartment, living in a condominium requires you to be considerate of your neighbors—and your neighbors to be considerate of you.