There are plenty of different ways to live if you think about a potential dwelling – from a standalone house to a shared unit in a building. If you intend to stay central, though, there are two places that you most likely would call home: a condo (also called condominium) or an apartment. Instinctively, people know the difference between them, the condo being a more high-end and expensive dwelling, versus an apartment, a simpler and lower-cost living option; but did you know there are several main differences between condos and apartments?
What are they? Let’s dig into this question!
Condo vs. Apartment – Difference #1: The question of ownership
An apartment is typically entirely owned by a leasing company that leases out its units. A condo unit is owned by a separate condo owner. A company, called a condominium corporation, manages this condominium under the supervision of a chosen circle of condo owners who make up the condo board.
That means, as an individual, you can rent an apartment, or you can either rent a condo (from an existing condo owner) or buy it and become a condo owner yourself.
Let’s assume that you are a potential tenant and are making a choice between a condo and an apartment. What else do you need to know?
Condo vs. Apartment – Difference #2: Who are you dealing with / Who manages the property?
If you are renting an apartment, you rent from a professional organization that has probably been in the business for decades. If you rent a condo, you deal directly with the condo owner. Some landlords might be overprotective and intrusive – after all, that’s their property and they are concerned about it. In the worst case, you might find yourself with a landlord who regularly comes in to check in on their property, which can be annoying.
In general, rental leasing organizations are better suited to manage leased properties since they can quickly deal with any potential issues and resolve any problems.
Condo vs. Apartment – Difference #3: Where do you pay more?
There are different financial constraints around apartments and condos.
When you rent an apartment, your rent will be lower than when you rent a condo. In 2014, Moneysense estimated that renting an apartment in Toronto cost approximately $200 less when you consider that renting a condo can result in some savings, such as not buying a monthly transportation pass or saving on a gym membership. The same criteria for Montreal revealed around $300, $100 for Vancouver, and $40 for Calgary.
A lot has changed since then – the TorontoRentals website offers more up-to-date numbers, suggesting that the average cost to rent a condo in Toronto in 2017 was $2,078, but the rent for an apartment was around $1,306, resulting in a difference of over $700. Surely, a condo might allow you to save something on a gym membership, transportation fees, and party room rentals, but these are more like consolation factors. The fact is, condos are more expensive to rent than apartments.
Condo vs. Apartment – Difference #4: What do you get for your money?
When renting a condo as opposed to an apartment, you will typically get a better choice of amenities and perks. A typical set of apartment amenities and perks would include parking, a gym, and maybe, if you are lucky, a swimming pool. Condo amenities and perks might also include a party room that you can rent for special events, a sauna, a movie room, a meeting centre, and an outdoor patio with one or more BBQ sets.
Some condominium complexes, like Westlake Condos, also have squash courts or, like Emerald City Condos, offer an indoor running track. These are more of an exception, though. Many downtown condos compromise on the space and amenities offered.
Condos vs. Apartments – Difference #5: Do a building’s age and location matter?
If you look at the entire inventory of condominiums and apartments, you will notice that condos, in general, are newer and are built in more recent years (e.g. after the 90s), whereas apartments can be somewhat more dated; many of which were built before the 90s. This is visible in the dwelling’s appearance and architecture. Most condos tend to nest in the downtown core or around large transportation hubs and subway lines, whereas apartments can be less attractive from the location perspective, and many of them can be found both in suburbs and scattered across the city.
Condo vs. Apartment – Difference #6: Where are the risks higher?
The amount of uncertainty and risk is different when dealing with condos versus apartments. When you rent an apartment, you
deal with a professional organization and things are very predictable. When you have an individual as a landlord, like in the case of a condo, you have the risk that he or she will decide to sell the property, leaving you searching for another place to live. Remember that some people purchase a condo as an investment, which is a great option when the market is growing, but once returns are not there and economic stability disappears, people will look at getting rid of their investments to minimize their debt (e.g. to avoid mortgage costs). As a condo tenant, you can be a victim of this.
Also, there is a question of ongoing funding. In an apartment, a leasing company is on the hook for all expenses, such as a defective roof, burst pipes, elevators that need maintenance, etc. In a condominium, a reserve fund is created from the condo fees and is used as needed for maintenance and upgrades. The condominium corporation’s insurance takes care of unexpected surprises. There are, though, cases where these funds are not enough, or where the condo insurance does not pay for everything. In those cases, costs are passed on to the condo owners as a special assessment. As a condo tenant, you can see this impacting your condo rental fees.
Condo vs. Apartment – What is the best option?
So, is an apartment or a condo the right option if you want to rent a place in Canada?
Well, it depends a little bit on what you need. In an ideal case, you will find in apartment in a relatively new building that is central with amenities that are comparable to condos. It is rare, but it exists!
Otherwise, your two options are:
Option 1: You are not too picky about how fancy and new a building you live in should look like, you do not care too much about proximity to the downtown core (because you have a car, or you are located close to the transportation routes), and you want to make sure that you do not overpay. Then an apartment might be the right decision for you.
Option 2: If your status of living is important to you, you enjoy living in a newer building just a few steps away from your work or subway station, and you like having a great choice of amenities, you are probably better off with a condo.
So, which option would you choose?