Apartment or Condominium?

You’ve probably lived in an apartment at some point in your life. Maybe you’re still an apartment-dweller, or maybe you moved on to a house. Regardless of your situation, you’re now wondering if condominium living could be right for you. It’s not just for old people anymore, after all—new homeowners are considering condominiums for affordability, just as individuals at retirement age are considering them to downsize from a home to a more manageable property. Read on for some facts about condo that may ultimately affect your decision to sign that condominium contract.

Prices and appreciation

Payments on a condominium can be comparable to or somewhat higher than the rent you’d pay in an apartment, and the condominium offers the extra advantage of ownership. Check out this handy rent vs. buy calculator to determine whether the condo you’re looking at offers fees that make it worth your while to buy into the condominium craze.

The value of a condominium can appreciate at a greater or lesser rate than a home, depending on your area and the local housing trends. It’s a better investment than simply pouring rent payments into your apartment landlord’s pocket, but may or may not pay off more than a house. Over the long haul, houses 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.

Hidden costs and maintenance woes

While affordability and the potential for appreciation can be some major advantages of condominium ownership, don’t forget that you’ll also be paying property taxes on the condominium space, since it’s now property that you own (as opposed to an apartment, which you merely rent). In addition, you’ll have to pay membership dues and possibly maintenance fees to the homeowner’s association (HOA) that manages the condominium space. And beyond the expected membership dues, you may also have to pay "special assessment" fees to cover costs not anticipated by the association.

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. In a condominium, the extent to which maintenance services are provided can vary between different HOAs. In general, the HOA fees you’ve paid will cover external maintenance and upkeep of the condominium complex, including exterior paint, walkways, parking lots, and any amenities (fitness rooms, pools, etc.). However, in some cases, 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. Do your research before buying and find out exactly what services are covered or not covered by the homeowner’s dues you’ll have to pay.

Property ownership and obligations

Your ownership of a condominium is a somewhat ambiguous form of possession. In some sense, you "own" only a share in the property, and have selected to become part of a community. Signing the contract to buy a condominium means you’ve chosen to become part of a "real covenant" that accompanies the property. This involves abiding by all covenants, conditions, and restrictions (CCRs) dictated by the HOA. Your failure to comply with the rules of the homeowner’s association could result in a termination of your contract and your condominium ownership.

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. With a house, you can add on or remodel; with a condo, your ability to do so is nonexistent or limited. Any changes you make will have to be approved by the HOA and be conducted in alliance with the HOA’s rules. 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 contract. 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.

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. You own only a portion of the greater condominium space, and are only entitled to use that space in a manner that allows other owners to enjoy their space equally. HOAs have rules about pets, noise, and other factors affecting your life. If you like to be able to do what you want when you want, a private home may be a good option for you. A condo might also work, but make sure to pick an apartment complex or condominium whose other residents have priorities in line with your own. You may be upset that you’re subject to so many rules when you feel that you’ve poured enough money into the HOA to be able to do what you want. Keep in mind that others are spending just as much money, though, and all condominium residents deserve to be undisturbed in their units. Respect others and you’ll be respected in turn. Above all, get to know your neighbors—they’re the people whose input regulates the activities allowed in the condominium as a whole.

The low-down

There are detractors who insist that condominium living has too many drawbacks and can’t compare with buying a home, financially or personally. However, the final decision is up to you, and it’s up to you to get informed enough to make the smartest choice for yourself and your life. Use the tips above and do your research before you sign that condo contract and enter a community of condo dwellers—it’ll be a unique and rewarding experience if you prepared for it appropriately


Apartment

An apartment is a self-contained housing unit that occupies only part of a building. Apartments may be owned (by an owner/occupier) or rented (by tenants).

A common alternative term for apartment is flat. The term apartment is favored in North America, whereas the term flat is commonly, but not exclusively, used in the United Kingdom, Ireland and the Commonwealth nations. In Malaysian English, flat often denotes a housing block of lesser quality meant for lower-income groups, while apartment is more generic and may also include luxury condominiums.

In the US, some apartment-dwellers own their own apartments, either as co-ops, in which the residents own shares of a corporation that owns the building or development; or in condominiums, whose residents own their apartments and share ownership of the public spaces. Most apartments are in buildings designed for the purpose, but large older houses are sometimes divided into apartments. The word apartment connotes a residential unit or section in a building. In some locations, particularly the United States, the word denotes a rental unit owned by the building owner, and is not typically used for a condominium.

In the UK, some flat owners own a share in the company that owns the freehold of the building. This is commonly known as a "share of freehold" flat. The freehold company has the right to collect annual ground rents from each of the flat owners in the building. The freeholder can also develop or sell the building, subject to the usual planning and restrictions that might apply.

The word unit is a more general term referring to both apartments and rental business suites. The word is generally used only in the context of a specific building. E.g., "This building has three units" or "I'm going to rent a unit in this building", but not "I'm going to rent a unit somewhere."


When there is no tenant occupying an apartment, the apartment owner or landlord is said to have a vacancy. For apartment landlords, each vacancy represents a loss of income from rent-paying tenants for the time the apartment is vacant (i.e., unoccupied). Landlords' objectives are often to minimize the vacancy rate for their units. The owner of the apartment, typically when transferring possession to the occupant, gives him/her the key to the apartment entrance and any other keys needed, such as a common key to the building or any other common areas and a mailbox key. When the occupant(s) move out, these keys are typically returned to the owner.


Condominium

A condominium, or condo, is a form of housing tenure and other real property where a specified part of a piece of real estate (usually of an apartment house) is individually owned while use of and access to common facilities in the piece such as hallways, heating system, elevators, exterior areas is executed under legal rights associated with the individual ownership and controlled by the association of owners that jointly represent ownership of the whole piece. Colloquially, the term is often used to refer to the unit itself in place of the word "apartment". A condominium may be simply defined as an "apartment" that the tenant "owns" as opposed to rents.

Condominium is the legal term used in the United States and in most provinces of Canada. In Australia and the Canadian province of British Columbia it is referred to as strata title. In Quebec the term syndicate of co-ownership is used. In England and Wales the equivalent is commonhold, a form of ownership introduced in 2004 and still uncommon in most places. In France the equivalent is called Copropriété (co-ownership), usually managed by the Syndic.

Technically, a condominium is a collection of individual home units along with the land upon which they sit. Individual home ownership within a condominium is construed as ownership of only the air space confining the boundaries of the home (Anglo-Saxon law systems; different elsewhere). The boundaries of that space are specified by a legal document known as a Declaration, filed of record with the local governing authority. Typically these boundaries will include the drywall surrounding a room, allowing the homeowner to make some interior modifications without impacting the common area. Anything outside this boundary is held in an undivided ownership interest by a corporation established at the time of the condominium’s creation. The corporation holds this property in trust on behalf of the homeowners as a group–-it may not have ownership itself.

The primary attraction to this type of ownership is the ability to obtain affordable housing in a highly desirable area that typically is beyond economic reach. Additionally, such properties benefit from having restrictions that maintain and enhance value, providing control over blight that plagues some neighborhoods. Major North American cities, including Miami, San Francisco, Chicago, New York City, Los Angeles, Calgary, Vancouver, and Toronto, have much condo development