Home Buying

Should You Buy a Condo or Rent an Apartment?

A common question many young people ask is: “Should I buy a condo or rent an apartment?” The answer, of course, will be different for everyone. But after reading this article, you will hopefully know which camp you fall into. Below, we’ll go over the pros and cons of buying a condo versus renting an apartment and how these factors can affect your future.

Pros of Renting an Apartment

You Have More Freedom

When you rent an apartment, you are not locked into a monthly mortgage payment to a bank that won’t be paid off for 30 years. Most people who rent an apartment will have a one-year lease. When you’re young, your life is still in constant flux.

If you take a new job, it’s much easier to pick up and leave when you have a short-term lease. Or you may simply want to explore a new part of a big city. Or you may decide you want to see what it’s like to live in another state. Unless you can know exactly where you want to be for an extended period, you may be better off renting an apartment to keep your options open.

More Cash in Your Pocket

While buying a piece of property like a condo can be a reliable choice for building future wealth, renting an apartment can be much cheaper each month when compared to a mortgage payment. You avoid paying HOA fees, homeowner’s insurance, and property taxes when you rent.

Less Utility Costs

Often, apartment buildings will have at least a portion of your utilities covered by the monthly rent. An example is having cable and internet included in the rent, but you have to pay for electricity.

Cons of Renting an Apartment

Fewer Options for Decorating or Remodeling

When you buy a property, it’s yours to do with as you please. But when you rent an apartment, you have to abide by the landlord’s rules. This means that if you put a few dozen holes in the wall to hang pictures or artwork, you may not receive your full security deposit back when your lease is up.

Paying Someone Else’s Mortgage

When you buy a property, you are applying forced savings by paying your mortgage each month, lessening the amount of time until you own the home outright. While you have to pay interest on your loan, interest rates are at an all-time low.

When you rent an apartment, you are helping someone else to pay down their mortgage. What it boils down to is that buying a condo is an investment, while renting an apartment is a way to keep your options open until it’s time to settle down.

Pros of Buying a Condo

Mortgage Interest Deduction

A significant portion of your monthly mortgage payment is paying interest to the bank for your loan. While this can feel like you’re lighting your money on fire, it’s a necessary vehicle for owning the home outright and is 100% tax-deductible. This deduction is especially helpful at the beginning of the loan when the principal that you owe is the highest.

Option to Rent

If you decide you want to live in a new home or a new location, you may have the opportunity to rent the condo out to cover your carrying costs. Renting the space is also an excellent option down the line once the unit is paid off. Years from now, you’ll have an investment property generating a quality monthly cash flow.

Freedom to Decorate

When you buy your own home, you can do whatever you want with it. That might be tearing down a room for a remodel, putting crazy colors on the wall, or hanging a hundred pictures.

Cons of Buying a Condo

Property Taxes

Part of the reason your mortgage payment is likely to be higher than your comparable monthly rent is the property taxes you owe when you own a home.


Another factor that increases your mortgage payments is insurance. Some renters may opt to pay for renter’s insurance, but it’s not a necessity like homeowner’s insurance is.


Almost every condo will have a homeowner’s association that you must pay a fee to each month. Some utilities may be covered in this payment, but more than likely, you are paying for access and maintenance to the common areas of the building. HOA fees are also used for the building to build up a reserve for future significant maintenance costs.

Lack of Mobility

Selling a property is a massive undertaking that generally involves months of preparation and weeks of waiting for the right buyer to walk through the door. This means that you are essentially stuck where you are. One of the ways around this, though, is renting your condo, which will allow you to move out.

Be careful to make sure that renting your condo is an option before buying. Many homeowner’s associations have a limit to how many units in the building can be rented out at one time.

Final Word on Condo vs. Apartment

When it comes to what is better for you, buying a condo or renting an apartment, the answer is nuanced and as far from concrete as possible. If you were looking to buy a condo for under $100,000, which you could fully pay off in six years for $1,000 a month, then it may be best to buy the condo rather than having to pay close to that much money in rent. By the time your condo is paid off, you can now rent it and look to buy a bigger place.

But if you were comparing that same condo to an apartment that cost you $500 per month and had utilities included, you may prefer the freedom of mobility and the lack of stress that comes with buying, managing, and maintaining a home that you own.

If the monthly cost of owning a condo is similar to that of renting, you are better off financially buying an asset that will appreciate, rather than paying for someone else’s mortgage. However, even if you find the best deal possible on a condo, you may be at a point in your life that the freedom of living somewhere else a year from now overrides the future financial benefit.

There is no right or wrong answer when it comes to buying a condo vs. renting an apartment. You will have to evaluate the monthly costs, the location, the condition of the units, and your own personal preferences to arrive at the right answer.

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