Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
An apartment is a general term for a separate residence within a larger building. Getting your place to live will always be a hassle; part of it is learning the difference between your options. In the magical land known as New York City, there are two main types of housing people want condos and apartments. They often look identical, too. So, what’s the difference between the two, anyway? Apartments are generally entire buildings owned by one person or a company, with individual units rented out to residents. Condos are buildings governed by an HOA but individually owned by people who live in them or rent them out. Understanding the implications of a condo versus an apartment is essential before you start looking for properties. There’s a lot to talk about here. So, it’s time to unpack it.
Apartments in NYC can either be individually owned condominium units, co-op apartments, or one unit of a rental building that one landlord entirely owns. Many folks moving to New York City for the first time will be confused by the difference between a condo and vs. apartment. Often, properties will be listed as simply an “apartment” on real estate search websites, and home buyers will become confused to find out later that it is a condo or a coop. We’ll explain in this article the difference between a condo and vs. apartment in NYC.
New York City is full of condos and apartments, but this doesn’t mean that they are identical—even when it looks that way. These main vital points below are the most commonly cited differences between the two:
Most people will find it easier to get an apartment for the funding issue and the issue of getting approved to move in.
Apartments have strict regulations on what they can and cannot deny an applicant. Condo boards, though, have more lax requirements on what they can deny an applicant.
With funding, the issue is pretty straightforward. Condos usually need lenders to approve you for a loan unless you can buy it in all-cash. When this happens, you always risk having a sale fall through.
Apartments are generally easy to leave.
You must refuse to renew the lease for the next year and find a new apartment to rent. Selling a condo, though, can be tricky. The HOA can reject a new buyer’s application, even if they make an offer on the unit, and this can force your unit to take longer to sell.
Let’s say you buy the condo all cash. You might be under the belief that you won’t have to pay fees month-to-month, but that’s not the case. Every apartment will have mandatory monthly fees brought forth by the HOA.
These HOA fees cover common area maintenance, admin salaries, repairs to the building structure, and taxes.
Blow by blow, studies have shown that New York City is a place where it’s almost always more affordable to rent than it is to own.
People who work in the city and want to live there already pay a premium price. Ownership, especially condos, comes with premium fees and a heavy tax burden.
Most people in New York are thrilled to rent for the rest of their lives. When you realize how much the price of homes can increase, it’s easy to see why some may find it better to sell their condo as a retirement vehicle later. So, both have their perks and pitfalls on a financial level.
Honestly, there is no correct answer that works across the board. Some people (like myself) want to be life-long renters simply because it is easier on them and makes sense for their financial needs. On the other hand, if you’re going to build equity or potentially rent out your home, a condo makes more sense later.
Most real estate professionals would say that it makes more sense to look at each option on a case-by-case basis. So, ask a real estate broker if you need help figuring out what you should get, and they often have the best advice.