Definition and Examples of Condominiums
A condominium is a type of home that’s part of a larger residential unit and will often share walls with one or more neighbors.
You may see condos listed among traditional homes when you're searching for a house to buy. Condo listings will make it clear the home is a condo, their photos should show the unit is attached to at least one other unit, and they may or may not detail the amenities you receive as an owner.
- Alternate name: Condo
How Condominiums Work
When you buy a condo, you’re not only purchasing your unit; you’re also buying a portion of your complex’s property.
Condos usually have association fees that help maintain the common areas of your project. These fees can vary depending on the type of amenities your complex provides, which can include parking garages, security, pools, gyms, and clubhouses.
The cost of your condo fees can vary, but they will likely be high if your building features many high-end amenities.
Pros and Cons of Condominiums
- Typically come with amenities
- An affordable option
- Usually require monthly fees
- Smaller than traditional homes
- Less privacy
- Typically come with amenities: Many condo complexes provide lawn care, building maintenance, pools, and a gym.
- An affordable option: Condos typically cost less than a traditional single-unit home.
- Usually require monthly fees: Condo fees can range anywhere from a few hundred to a few thousand dollars a month, depending on the level of amenities you get.
- Smaller than traditional homes: Condos usually have less indoor and outdoor space than a traditional home.
- Less privacy: Condos units are often located in apartment-style buildings, which means you share walls with at least one other unit.
Do I Need a Condominium?
You’ll want to decide whether or not to purchase a condo based on your needs. Condos are popular—millions of households live in these multifamily units throughout the U.S.
Condo demand has been high before and after recessions over the past 30 years, indicating that condos remain a popular option among potential homebuyers.
There are positives to owning a condo. You’ll likely have less maintenance, more amenities and security features, and lower costs than a traditional home. This isn’t just because purchasing a condo is cheaper than a single-family home; your condo association can cover things like insurance for your building’s exterior and common areas, pest control, and even some utilities. Having these paid for can significantly lower your out-of-pocket monthly costs.
When a Condo Might Be a Good Fit
Let’s say that you’re a single 25-year-old looking to purchase your first property in Los Angeles. Your main goals are to be close to your work, be able to walk to restaurants and cafes, and spend as little time as possible maintaining outside spaces. In this case, a condo may be a good fit for you. Condo communities typically cover the cost of outdoor maintenance. You can also take advantage of a condominium’s affordability to find a place closer to work without going over budget.
Depending on location, your condo association’s insurance may cover floods or earthquakes, which means you’ll only need to insure the interior of your condo and your personal belongings.
When a Condo Might Not Be a Good Fit
Now, let’s assume you’re a married 27-year-old with a new baby. You and your partner already live in a two-bedroom apartment, but you simply don’t have enough room. You want a yard so that you can finally build that massive two-story playground you’ve always dreamed about. In this case, opting for a single-family home may be a better option. Because condos don’t often feature large private yards, your playground dreams would be better suited with a sprawling landscape.
Condominiums vs. Apartments
|Pay a monthly mortgage||Pay monthly rent|
|Amenity fees||Typically don’t charge amenity fees|
|Can own||Can’t own|
|Can rent||Can rent|
These two types of properties are easy to confuse. On the outside, they may look the same: they consist of one unit inside a larger multifamily unit and can feature amenities like pools and gyms. The main difference between a condo and an apartment is that you can buy a condo, whereas apartments are rented.
That doesn’t mean that you can’t rent a condo, however. Privately owned units within a condo complex can be subleased to tenants. In this case, the condo owner or their representative will act as your landlord.
- A condominium is a single unit in a multifamily property that you can buy.
- Compared to single-family homes, condos often offer additional amenities and security.
- Condominiums will often share walls with at least one or two neighbors, which can reduce privacy.
- Condos can be more affordable options than single-family housing.
National Association of Homebuilders. "Multifamily Condo Construction Starts Fell 28% in 2020." Accessed July 8, 2021.