Updated September 12, 2022
Condos and apartments certainly have a lot in common, but they aren’t the same thing.
Those commonalities sometimes lead to confusion about what the difference between the two is. That’s the purpose of this article: what makes a condo a condo, and an apartment an apartment? Plus, a quick look at the cost difference between these two types of homes.
Condos and apartments are both types of residences.
They tend to share a very similar (often identical) physical structure. You can probably picture an apartment building: usually a multi-storey affair, with multiple living units on each floor. Condos can share this form, but also may be townhouses, detached houses, or anything in between.
The difference between condos and apartments is mainly about ownership:
So, it’s technically possible for a residence to be both an apartment and a condo. For example, if someone owns a condo unit and rents it out for someone else to live in, the owner would call it their condo; the occupant would usually refer to it as their apartment (assuming it was in an apartment-style building).
There are also purpose-built apartment buildings, in which the individual units are not for sale. These types of buildings are normally owned by a single property rental company that rents out each unit and manages the building. It would not be correct to refer to these types of residences as condos, because no one can buy the individual units.
Note that condo is a specific term for a form of property ownership. Each province has some form of condominium act that codifies condo law. In some provinces, you’ll hear the term strata; it means the same thing as condo.
Apartment, however, is a more colloquial term. Some condo owners may refer to their home as their apartment, even if they’re not renting it out. Generally, any residence that’s part of a large, multi-unit building may be called an apartment, but it’s usually reserved for rented residences.
Now we’ve seen the differences between condos and apartments, let’s look at the differences in cost.
Naturally, given that one owns a condo and rents an apartment, the cost difference can be pretty significant.
To rent an apartment, your living costs are relatively straightforward:
A condo, on the other hand, has more complicated costs associated with it:
You can see that condos typically involve higher total costs than apartments (assuming one owns the condo and rents the apartment).
One major difference, however, is that the condo owner is building equity in their home with their mortgage payments. When the mortgage is paid off, they’ll own the condo outright—a major financial asset. Someone renting an apartment pays rent every month, but they don’t gain any financial interest in their home; the rent money is gone with nothing to show for it (except a place to live, of course).
If you’re wondering whether it makes more financial sense to rent or buy, there are many online calculators that can help you crunch the numbers.
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Renting an apartment or buying a condo each have upsides and downsides—not just financial ones, either. Here are some of the common pros and cons of condos and apartments.
Want to learn more? Visit our Condo Owner resource centre for more helpful articles about the intricacies of condo life. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.
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