The smart buyer’s guide: What’s a condo, and is it right for you?

What you’ll learn ✅

• What condominiums are and how owning one works

• How condos compare to houses, townhomes, and apartments

• How to decide whether buying a condo fits your budget and lifestyle

• Costs to expect if you look for a condo, like purchase prices and association fees

When you’re looking for a new home, it can be hard to choose between buying a house and renting an apartment. The former offers control and equity, while the latter comes with less responsibilities and (usually) more amenities.

Condos are a great third option that gives you a little something from both categories. You still get to own your home, but you’re also part of a community and don’t have to handle all the upkeep on your own. Plus, condos are a popular option for homebuyers who want easier access to city centers or work than traditional neighborhoods may allow.

Along with the benefits, condos come with their own rules and ongoing costs. This guide explains what a condo is and what you’re responsible for when you buy one, so you can decide whether this kind of home is right for you.

What’s a condo? Meaning and ownership

A condo is part of a shared arrangement where you own your individual unit and share ownership of common areas. The building’s HOA, sometimes called a condo association (CA), manages the common areas. Those areas can include:

• Hallways

• Elevators

• Lobbies

• Parking garages

• Outdoor spaces

• Shared amenities like gyms and pools

How does a condo work?

If you’re a potential first-time condo buyer, you should know that financial and upkeep responsibility comes in two parts:

• Your unit: You’re responsible for the interior of your home, including flooring, appliances, and fixtures.

• Shared spaces: The CA oversees and maintains common areas and exterior elements, and all residents share the costs.

To cover those shared costs, owners pay monthly CA fees, which vary based on the age of the building and the amenities included. Some CAs only cover basic maintenance and condo insurance, while others add on services like trash pickup, water, and building staff.

Most condo communities also regulate things like pets, renovations, and noise levels. Reviewing these rules carefully helps you avoid any unwelcome surprises after you buy.

Four types of condos

The term condo describes how ownership works rather than a single building style, so you’ll come across different setups. Here are four of the most popular condo types.

1. Condo building

A condominium building is a mid-rise or high-rise property with multiple units under one roof. These buildings are common in urban areas and usually include shared hallways, elevators, and amenities like pools or gyms. The CA takes care of exterior maintenance and outdoor spaces like lobbies and parking areas.

2. Detached condo

A detached condo looks like a single-family house but is part of a CA. While the home is a stand-alone structure, you follow community rules and have a shared ownership arrangement. The CA may still handle exterior areas like roofing and landscaping. And in most cases, you don’t own the property the condo sits on.

3. Mixed-use condo

A mixed-use condo is in a building that combines residential units with office or retail spaces. You might live above shops or workplaces, which is convenient if you want those services nearby. These buildings often have extra rules about access and noise, so it’s important to understand how the CA separates residential and commercial responsibilities.

4. Loft condo

A loft condo features open floor plans, high ceilings, and large windows. You’ll find many of these condos in converted industrial and commercial buildings, usually in older city neighborhoods. Because of their layout and building history, loft condos may have stricter limits on renovations and sound insulation.

How much does a condo cost?

Condo prices vary as much as any other property type, and you’ll have ongoing costs along with the up-front expenses. When drafting your budget, factor in:

• The down payment

• Your monthly mortgage payment

• The building’s CA fees

• Line items like property taxes and insurance

CA fees can change over time, especially when the building undergoes major repairs or renovations. Stay aware of budgets and association meetings so you know about future costs that might affect you.

What are advantages and disadvantages of owning a condominium?

Whether or not buying a condo is the right move depends on your lifestyle. Below are a few advantages and disadvantages to consider before you make a purchase.

Pros of condo living

• Less day-to-day upkeep

• Access to shared amenities

• Often located closer to downtown or job centers

• Potentially lower purchase prices than single-family houses

Cons of condo living

• Monthly CA fees that increase housing costs

• Limited privacy in shared common spaces

• Restrictions around rentals, pets, and renovations

• Condominium resale value affected by the building’s condition and finances

How condos compare to other property types

Check out the differences between condos and other properties to see which is the best fit for your situation.

What’s the difference between a condo and a single-family home?

Buying a single-family home gives you more control and privacy than most condo houses, but it also comes with more responsibility. With a condo, the CA handles a lot of repair work, simplifying day-to-day upkeep. Homeowners are responsible for maintaining their entire property, which costs more time and money.

From a financing standpoint, you can buy condos and single-family houses with similar mortgage options. But with a condo, lenders may review the CA as part of the approval process. Plus, you have to account for CA costs versus the price of maintaining a single-family home.

To make that process easier, Better offers a range of mortgage loans and a calculator to help you decide how much house you can afford.

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What’s the difference between a condo and a townhouse?

The term townhouse describes a building style, not an ownership structure. So some townhouses are condos, while others work like single-family homes. CA documents should define everyone’s shared responsibilities, like whether owners or the association maintains the exterior and how rules are enforced.

What’s the difference between condominiums and apartments?

Apartments are usually rented, while condos are owned. With a rental, you have fewer long-term responsibilities, but you don’t build equity in the unit. A condo purchase lets you build equity over time and take part in shared decisions about the building and community.

Let Better help you find a condo that fits your needs

Condos make sense if you want to own a home without having to handle outdoor maintenance and upkeep personally. They also expand your options when affordable houses are hard to find and give you access to shared amenities. Before buying a condo, review the CA’s rules and finances carefully, and plan out how the monthly costs will fit into your budget.

To help you find the right match, check out Better. We have a dedicated team of real estate agents ready to pair you with the perfect condo. If you’re ready to see how much you’re pre-approved for, fill out our application. It doesn’t impact your credit score, and you’ll have the results in as little as three minutes.

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FAQ

What does a condo look like?

A condo can be a unit in a high-rise, a townhome residence, or even a stand-alone building. What makes it a condo is shared ownership of common areas.

What are HOA fees, and what do they cover?

HOA fees are monthly dues paid to the association that manages a building or community. These fees cover shared expenses that range from upkeep of exterior and common areas to building insurance and trash removal.

What are typical condo loan requirements?

Condo loans look at both the borrower’s qualifications and the building’s community management. Rules and key factors vary a lot, so brush up on these tips for getting approved before you talk to lenders.

Do condo owners pay property taxes?

Condo owners usually pay property taxes on their individual units. Taxes are assessed separately from CA fees and are based on local tax rules and unit values.