What is a Condo? | Guide to Condominiums
If you're on the hunt for your next apartment, then you're likely spending your days browsing through tons of apartment listings (hopefully with us).
These listings typically have one thing in common: they use confusing rental terminology. You know the type. What does kitchenette mean? What about garden-level?
These terms are likely unfamiliar if you are new to the world of renting. While scrolling through apartment listings, you may be confused when condos appear on your search. You may be asking yourself, "What is a condo?" or "How do condos differ from apartments?"
Though many confuse the two terms, a condominium or condo is distinct from a traditional apartment in many ways. Though you may find your dream home with either option, there are some finer points that will influence your decision. In short, choosing between a traditional apartment and a condo can be challenging, and it's important to know exactly what condos are.
Here's everything you need to know about condos.
What is a Condo?
Condos are private living units within a residential building or complex. Ownership is the key difference between condos and apartments.
Traditional apartment units and townhouses are usually owned by an individual or property management company. They own and operate the entire apartment building or complex.
Condos are apartment units that individual owners purchase. You may see condos appear on your rental search, as the owners often rent them out.
When renting a condo, you’re renting a unit from an individual rather than a property management company or landlord who owns the entire building. The individual will set the rental price, provide the lease details, and have their own rules and regulations for renting out their unit.
Overall, renting a condo is very similar to renting a traditional apartment unit, with a few caveats. Condos are more commonly associated with luxury amenities and tend to be located in larger cities, and can be privately owned. Outside of these few distinctions, they’re essentially traditional apartments.
Detached condos are also popular. These are freestanding houses that are privately owned and a part of a condo association, which are also commonly rented out.
Homeowners Association Fees (HOAs)
A homeowners association or HOA is an organization that serves as the governing body for a community of homeowners. They are made up of volunteer members within the condominium community. These individuals are traditionally elected by condo owners, within the community.
As a governing body, HOAs handle many of the responsibilities that a landlord or property management company would cover. Although what HOAs cover varies from community to community, they'll often cover things like common spaces, landscaping, maintenance/repairs, and common utilities.
Generally, HOA fees are split. One half usually covers recurring expenses and the other half is put into a reserve fund. That fund is used to cover emergency expenses or future projects.
How Much are HOA Fees?
In most cases, when you purchase a condo, you buy into the HOA by default. As a condo owner and member of the HOA, you will be required to pay HOA fees or dues.
For renters, this can mean that you’ll likely be responsible for covering HOA fees on top of your monthly rent payment.
As these fees go toward typical maintenance and repairs, they also allow access to common areas and amenities. Those may include on-site laundry, gyms, pools, and more. Not to mention, you get to live in a well-maintained building.
However, this may push the unit just out of your budget. So, it's a trade-off you'll have to consider before making a final decision to rent a condo. Be sure to ask the condo owner you are considering renting from what's included in the monthly rent.
Things to Know Before Renting a Condo
When deciding between renting a condo or a traditional apartment, it's important to consider the essential differences between both options. This will ensure that you’re able to make an informed decision on the matter.
Here’s a breakdown of the most important details to consider before renting a condo:
1. Renting from a Private Owner
As this is the primary difference between renting a traditional apartment and renting a condo, it's important to explore the effects of this setup.
When renting a condo from an individual, you may have to contend with the fact that they’re not an experienced landlord. They may not be familiar with some of the typical protocols that come with being a landlord. This can possibly lead to headaches on your end.
The best way to avoid these problems is to ensure that you check and double-check your lease agreement before signing. You want to be sure that all possible situations are covered and clear in your lease agreement. This includes everything from parking, who’s responsible for covering repairs, whether you need renters insurance, pet policies, and everything in between.
Additionally, don't be afraid to ask for the HOA bylaws upfront. It's important to review these, as well.
While there are advantages to renting into an HOA, there are also some disadvantages. Those may include strict rules that could affect whether you would want to live there.
These rules can govern anything from decorations, pet restrictions, and noise levels. Failure to adhere to these rules can result in a fine for yourself or the condo owner, depending on HOA bylaws.
One of the biggest advantages of renting a condo is the access to many coveted amenities that they provide. Though you may have to pay a little extra in HOA fees, condos often offer more amenities than a typical apartment building. They’re on par with many luxury apartments.
Though these amenities may not be the tide-changer, they’re important to note for renters whose dream apartment comes with plenty of amenity options.
Here are a few common condominium community amenities to look out for that'll be sure to enhance your rental experience.
- On-site Gyms
- A Pool
- Community Garden
- Rooftop Access
- Common Recreational Areas
- Professional Landscaping
- Community-Wide Events
- Excellent Location
- Regular Maintenance
When maintenance issues arise in your apartment, you can call your landlord and have the maintenance team take care of them. When it comes to renting a condo, maintenance can either be a breeze or a headache.
If your HOA covers maintenance and is simple to request, renters can usually expect swift action and professional support. However, this may not be the case when your landlord is responsible for handing and covering the cost of repairs without the help of the HOA.
For example, an experienced landlord would generally be on top of repairs to your apartment. They might be able to perform a repair themselves, or they may have contacts for third-party businesses to get the job done.
However, inexperienced landlords may not be able to pull this off. They may cheap out on the service. Or, worse yet, they may be inexperienced and try to fix the problem themselves. This can lead to a world of trouble for you as a renter.
Be sure to inquire about repairs and maintenance prior to signing your lease agreement. If you’re responsible for covering the cost of repairs, you will need to consider these costs in your budget.
4. Rules in Condos
While a traditional apartment has a set of guidelines for all tenants regarding tenant behavior, rights, pets, and more, condo rules are a bit more complex.
When renting a condo, you will have to abide by two sets of rules: those set by the condo owner and those set by the HOA. As you’re renting from an individual, they may have very specific rules regarding tenants residing in their unit.
One thing to note about landlord rules for a condo is that it's very easy for inexperienced landlords to put in rules that don't comply with laws that protect tenant rights. This is usually unintentional due to a lack of experience. However, the effects can still be harmful to a renter.
For example, rent raises without due notice, illegal evictions, or entering the unit without the tenant’s permission should be causes for concern.
Being proactive is essential. Do not sign your lease agreement without reading it over. This is the only way to protect yourself in advance. Otherwise, you’ll be fighting an uphill battle if any of those things do occur.
Let’s move on to the HOA's rules. HOAs can enforce strict rules that have significant consequences when people breach them. It’s essential to read HOA bylaws before renting a condo.
5. Credit Checks
While applying for a traditional apartment unit generally requires a credit check, this may not be the case when renting a condo from a private owner.
Credit reports are used to determine whether a tenant has an upstanding history of repaying loans and credit lines on time. However, credit history is not always the best standard to measure by, and obtaining a credit report can be an unwanted expense during the rental process.
For these reasons, some condo owners forego credit checks when renting out their unit. This can be good news for young renters without credit history or renters with poor credit.
However, you’ll likely still have to produce some means of proving that you can cover monthly expenses. These include proof of gainful employment and proof of income.
Private owners may be more flexible. However, traditional property management companies or professional landlords may have strict income and credit requirements.
Be sure to watch out for rental scams. Some scammers will list a unit for rent without the owner’s permission. They just want to get your money. They don’t care about your credit history or ability to pay rent on time.
If your contact asks for money upfront and doesn’t seem interested in your ability to pay rent or whether you’re a good tenant, run!
Check out our tips for avoiding rental scams.
Choosing Between an Apartment or Condo
Apartment or condo? That’s the question.
Let's take a look at the essential features of an apartment vs. a condo.
- Rented from and managed by a landlord or professional property management company.
- Tenants are bound by the law and the terms of their lease agreement.
- There is no HOA. Therefore, there aren’t any HOA bylaws to follow or fees to pay.
- Outside of luxury apartment buildings, some apartment buildings may lack high-end amenities.
- Rented and managed by a private individual condo owner.
- Tenants are bound by the law, their lease agreement, and the bylaws of the HOA.
- Typically governed by an HOA, which requires additional fees on top of rent.
- Generally, condos feature substantial amenities, including gym access, a well-maintained building, and access to shared spaces.
This is just a brief breakdown. If you’re truly struggling with the decision between a condo or an apartment, check out our in-depth guide on Condos vs. Apartments.
While there are important factors to consider, the decision will largely come down to what you are specifically looking for in a home.
At the end of the day, whether an apartment or condo best fits your needs depends wholly on your preferences and individual circumstances. The two most influential aspects of the decision come down to whether you’re comfortable renting from a private owner and taking on the associated costs of a condo.
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