In the real estate rental business, there are different kinds of rental properties available. There are single-family homes, vacation homes, and many more. However, two popular kinds of rental properties are often difficult to differentiate from each other: condominiums and apartments.

As a landlord, you have to know the difference between the two before you invest in any of them. It would also be necessary that you, as well as your property managers and rental agents, are clear on the type of property you have when creating listings on platforms like Padleads.com so that you will not mislead potential tenants.

Knowing the difference will also be helpful for you to have the best approach to managing your rental property. Apartments and condos are similar in many ways, but where they differ is more important and crucial for you to know as a landlord or property manager. Here’s how they differ:

Ownership

Apartments: Typically, an apartment complex is owned by only one entity. Tenants will mostly occupy all the units unless the owner decides to live in the building as well, this means that all tenants are most likely to be on the same page, governed by the same housing rules, and have leasing transactions with the same landlord or property management company.

Condo: Each unit has a unique owner. All owners will be responsible for common areas and they will usually be under a homeowners association (HOA) which will manage building fees for basic maintenance and upkeep of areas outside individual units.

Each owner will be responsible for maintaining the unit that they own. If you will rent out your condo unit, your tenant’s renting experience will be based on your leasing terms alone. The rules and rent that you will charge your tenants don’t need to be the same as what other unit owners will implement.

Fees

Apartments: The fees that you can charge to tenants is pretty standard. It’s usually the first and last month’s rent, a security deposit usually equal to one month’s rent or depending on local housing laws, pet fees (if applicable), and sometimes an application fee for potential tenants which will cover tenant-screening costs (e.g. criminal and credit background checks).

Condos: It may be similar to what apartments charge tenants, but it greatly depends on the unit owner’s discretion (as long as it is still legal based on local housing laws) and how a potential tenant would negotiate. But unlike apartments, an HOA fee is typically charged to a tenant, which will be used to maintain common areas in the condominium building, such as swimming pools, elevators, and lobbies. It may be charged as part of the rent or a separate fee, depending on the unit owner.

Repair and Maintenance

Apartments: Since you manage an entire building, it’s best to a have maintenance team or different third-party service providers that can respond to every repair and maintenance request. You also have to have clear rules as to what your repair and maintenance responsibilities are and where you draw the line. Your tenants need to do their part in maintaining their rented unit, while you do your part to provide them with habitable housing.

Condos: Tenants would have higher expectations that their landlord would be more responsive to repair and maintenance requests since they don’t manage an entire apartment building. As the owner, you are responsible for keeping your unit under habitable conditions. For maintenance and repair in common areas, you can expect the HOA to take the necessary action.

Rental Rules and Regulations

Apartments: The rules a landlord can impose will apply to all tenants such as noise restrictions, pet policies, rental amount, and payment terms.

Condos: A unit-owner can have a unique set of rules and limitations for their tenant. The key difference is that both tenants and owners need to follow the rules and guidelines set by the HOA for common areas, so you must make your tenant fully aware of the HOA’s policies.

IN A NUTSHELL

Condos and apartments can both be a good investment for rental property investors. Knowing the difference between the two can help every interested investor to know which is more suited for them and their target market.