Condo vs. Apartment: What Are the Main Differences?

Updated: Dec. 07, 2023

The line between condo vs. apartment can be blurry, but there is a big difference. Unlike renting an apartment, buying a condo is an investment.

In a nutshell, the difference between an apartment and a condominium is that you rent an apartment and you own a condo. This usually means, from the street, you can’t distinguish an apartment building from a condominium complex unless there’s a sign. But if you get to go inside and view several units, you’ll see the difference ownership makes.

Units in an apartment complex are identical, with the same plumbing fixtures and carpeting and possibly even the same furniture. That’s because the landlord makes all the major design decisions.

Condo units, on the other hand, have their own unique character because they’re individually owned. Although units may be architecturally similar, owners are free to change the carpeting, paint the walls and sometimes even make structural changes.

We asked California real estate broker Paul Lazaga to fill us in on the details of renting an apartment vs. owning a condo. In the process, he offered some tips to help people decide on one over the other.

Condo vs. Apartment: What Are the Main Differences

In an apartment complex, the landlord is responsible for upkeep and maintenance, with the cost usually passed on to tenants in the rent. Rules governing the use of the premises, including amenities like a swimming pool or spa, are spelled out in the lease agreement.

Tenants occupy the apartment for the length of time stipulated in the lease (usually a year) and must sign a new lease when the old one expires. This often lets landlords raise the rent, a common occurrence in hot rental markets.

Condominium buildings, however, are owned in common by all the people who live there, who collectively form the Homeowners Association (HOA). The HOA board of directors, elected from all the owners in the complex, oversees the maintenance of the grounds and sets the rules for use of common amenities.

Because each tenant in a condo owns their unit, they aren’t subject to eviction or rent increases as long as their mortgage payments and HOA fees are up-to-date.

Condo owners are generally responsible for maintaining their units, whereas apartment dwellers call the landlord when something needs fixing. Some HOAs provide for repairs to units. However, Lazaga says, “It’s very important to read the HOA rules, so you don’t get blindsided. Some HOAs cover major repairs like window replacement and some don’t. Laws governing HOAs vary from state to state.” Also, find out the difference between an apartment and a house.

Condo Costs vs. Apartment Costs

It costs more to move into a condo than an apartment because a condo is a real estate investment. Over several years, Lazaga says you can expect a condo to appreciate in value by 3% each year. “It fluctuates,” he says. “Some years the appreciation is less while other years it’s more. But 3% is a reliable long-term average.” For this reason, a condo can be a wise investment for first-time homebuyers.

The down payment for a condo is typically 20% of the purchase price. Lazaga considers $500,000 to be a representative median national price, making the average down payment around $100,000. The average monthly mortgage payment runs around $3,000 at current interest rates, and HOA fees adding $200 to $600 per month, Lazaga says.

In exchange for that hefty chunk of cash, condo owners earn equity with every mortgage payment, along with appreciation on the property and a tax deduction for the interest paid.

When moving into an apartment, the landlord sets the rent and decides on the amount of the security deposit. It’s common to pay the first and last month’s rent before moving in.

California permits landlords to collect three months of rent as a security deposit for a furnished apartment. In California’s rental market, where an average two-bedroom apartment rents for $1,500, it can cost $4,500 or more to move into a furnished one. Renters may also have to pay for things like utilities, internet and trash pickup, depending on the terms of the lease.

Condo Owner vs. Apartment Tenant Responsibilities

When you rent an apartment, your responsibilities are spelled out in your lease agreement. When you buy a condo, they’re determined by the HOA rules.

Unless stated otherwise, apartment tenant responsibilities are usually limited to keeping your unit clean and in good condition. Repairs like replacing a faucet, fixing the water heater or installing carpeting are the landlord’s responsibility, as is building and property maintenance. Things like snow removal, garbage disposal and security are usually covered by your rent.

The responsibilities of condo owners can vary with the HOA rules. HOAs typically provide grounds maintenance, security and many of the services provided by a landlord, like waste disposal. However, because an HOA is a type of community, rules and responsibilities vary according to who lives in the building and amenities available to all residents.

Every condo owner is responsible for maintenance and repairs to their unit. That can be a downside. But as Lazaga says: “If you own a home, you have to pay for maintenance.” In short, it’s the price you pay to protect your investment.