What is a condo? Condominiums defined

Providing community living in walkable urban areas, condominiums (condos for short) are great options for first-time home buyers and people looking to enjoy homeownership without extensive upkeep.

But what is a condo? Let’s explore the pros and cons of buying a condo; the different types of condos you may come across; and the key differences between a condominium, an apartment, a townhouse, and a single-family home.

What is a condo?

The definition of a condo, also known as a condominium, is a housing or residential complex with separate units, each owned individually. This makes it different from an apartment complex, which is a multiunit housing development that is owned by a single entity who collects rent from lessees. A condo can be leased out, as well, but in that case the renter leases directly from the condo owner.

Condo owners are responsible for what goes on within their individual units, including maintenance and repairs. Beyond that, they must pay regular fees to a homeowners association (HOA). The fees contribute to the maintenance of shared common areas, building amenities, and the exterior of the complex.

Types of condos

We’ve determined that what all condos have in common is that the resident owns the property and the maintenance of shared properties is the responsibility of all the owners in the condo association. But from there condos can vary in what they look like and how they function within their association. If you’re looking to buy a condo, you should start by examining how you want it to work for you. But to simplify, condo complexes exist as one of three basic configurations:

• Big box condo. This can look much like an apartment building. It can be low-rise, mid-rise, or high-rise. It has a common entrance and elevators. In some cases the building will employ a concierge or even a doorman. Units may have balconies or terraces, and in some cases the building will have a ground-floor courtyard or other common greenspace. Most big box condos will have a private parking structure.
• Townhouse condo. These are one- or two-story condos that are attached to each other but otherwise have their own entrances. Each unit might have its own outdoor space, such as a deck, balcony, or courtyard. Parking can be in an attached garage or an outdoor parking lot or carport. There are some types of townhomes where the owner owns and maintains the outdoor space and is thus not considered a condo.
• Detached condo. While it typically exists in close proximity to other units in a condo development, this kind of home does not share a wall with any other unit. It sits on a lot that is owned and maintained by the condo association. It almost always has some type of outdoor living space, deck, or patio, plus its own attached garage.

What is a condo owners association?

Generally speaking, if you own a condo, you will be part of a condominium owners association (COA). A COA is similar to an HOA in that the association makes sure rules are followed, fees are paid, and shared spaces are maintained.

There are some key differences, though. COAs are composed of all condo owners in the complex, while HOAs are usually run by an independent management company. In a condo complex, all condo owners share joint ownership of the shared spaces, while in an HOA the shared areas are usually owned by an independent entity or by the developer of the neighborhood. Nonetheless, in many condo communities the terms COA and HOA are used interchangeably.

How much does a condominium cost?

Though the U.S. national median sale price of a condo in October 2025 was $365,000, this number doesn’t mean very much on its own. There is no one answer to this question, as the cost of a condominium, just as the cost of any housing unit, varies widely based on region, state and city or town. Redfin data shows that in Los Angeles, for example — one of the most expensive real estate markets in the U.S. — the median condo sale price in October 2025 was $635,000.

Even within a city, costs will vary based on size, shared spaces, neighborhood amenities, and other factors. If houses are on the expensive side in an area, condos will also be expensive. For example, according to Redfin data, you can easily find a condo for under $200,000 in North Dakota or Oklahoma, but you’ll have a tough time finding one for under $500,000 in Massachusetts or California.

Is a condominium a good investment?

Your financial circumstances will play a large part in determining whether a condo is a good investment for you. Besides that, condos have plenty of unique advantages and disadvantages to consider.

Pros of buying a condo

Pros of buying a condo vs. renting or owning a single-family home include ownership with amenities, less upkeep, and affordability.

Let’s take a closer look at the pros:

• Chance to build equity: Buying a condo home helps build equity, unlike renting, which doesn’t contribute to long-term financial growth. Mortgage payments increase your stake in the property, and you benefit from resale value increases.
• Added amenities: Depending on the complex, you may have access to amenities like a pool, a dog park, or parking garages. Since shared amenities are usually managed by a condominium owners association, you can enjoy them without the responsibility of upkeep.
• Sense of security: Many condos include features like gated entrances or hired security guards. Additionally, the proximity of neighbors and the sense of community can make condos feel safer for residents.
• Less maintenance: Condos are popular for people who want to own a residence but don’t want to deal with the upkeep that comes with owning a single-family home. If you like the idea of owning your own place without needing to mow a lawn, shovel snow, or care for landscaping, a condo may be a great fit for you.
• More affordable: Condos can be less expensive than traditional homes, making them an affordable option for home buyers with modest salaries, even despite condo association fees. If you delayed or disregarded homeownership over affordability concerns, a condo may be closer to your price range.
• Investment property: The pros outlined above are why many real estate investors purchase condos. Relative affordability, less maintenance, and attractive perks and amenities can make them an appealing investment.

Cons of buying a condo

If you don’t want to pay additional costs on top of your mortgage or abide by community rules, condo living may not be suitable for you.

Let’s further define the cons:

• COA restrictions and fees: When you buy into a condo home complex development, you also buy into rules set by its members. The rules can include rental limitations and pet restrictions. Additionally, you’ll pay a monthly COA fee for the upkeep of the common areas and building. These fees will vary depending on the location and size of the condo.
• Less square footage: Large families or buyers who prize outdoor space may feel cramped in a condo. Condo units usually don’t have private outdoor space, and you may need to walk a fair distance to find a park or playground.
• Less privacy: Condos share common areas and walls. With this shared space comes the feeling of community – but a lack of privacy. Shared space can mean noise problems.
• Resale challenges: Reselling may be difficult because some factors – like the financial health of the condo association and the rigidness of its covenants – are outside your control.
• Limited personalization: Depending on the rules and restrictions of the COA, there may be restrictions on making changes to the exterior of your unit or prohibitions of flags or decorations.

The pros and cons of buying a condo will vary depending on the type of condominium, its location, the size of the complex, and the type of tenant.

Condo vs. other property types

Condos are often confused with apartments and non-condo townhouses. To clarify things, we’ve included the table below. We’ll also go into more detail about the differences between condos and other types of homes.

Condo home

A standard condo home is a residential property where the portion of the building an owner owns consists of the interior of their home. When you own a single-family residence, or what you may traditionally think of as a house, you own the dwelling and the property it sits on. Condo homes can also be used as a primary residence.

With freehold condominium developments, the developer owns the land the units are on. When a tenant buys a condo, ownership is transferred to the buyer. The key difference between freehold condo developments and traditional condo buildings is that the owners of freehold condos are responsible for upkeep and maintenance on their units, including exterior walls, while management maintains the common areas.”

Condo share

A timeshare condo, or condo share, is typically used as a second home or vacation home. Its tenants are allocated use of the condo for a certain time and number of days each year.

Detached condo

Detached condos have the advantages of condominium living with minimal upkeep and planned communities within an HOA. The major difference between detached condos and condo homes is the lack of shared walls. A detached condo often appears as a single family home, with an attached garage and sometimes a smaller landscaped yard that is maintained by the condo association.

Private condo or private-owned apartment

A private condo, or private-owned apartment, is owned by its unit’s landlord. Typically, private condos are rented out to tenants, but they differ from standard apartments in terms of property management and options to customize. The application process, criteria, and deposits may vary with private rental condos.

Condo building

A condo building refers to a complex made of individually owned units. It is typically a “big box” building that can be anywhere from a few floors to a high-rise tower of 30 stories or more. Ownership is typically controlled by an HOA or a community property management company that performs property upkeep and some maintenance.

FAQ about condos

What financing options are available for condos?

You can buy a condo with a mortgage, same as if you were buying a single-family home. There are different types of mortgages that can be used to purchase a condo, including conventional loans. You should check with a condo’s HOA to see if they have any financing restrictions.

What are the benefits of a condo versus an apartment?

Owning a condo can be more beneficial than renting an apartment because condo ownership allows you to build equity. Also, a fixed-rate mortgage payment gives you more certainty in the long term because you no longer need to worry about rent hikes. And because your neighbors in the condo community also own their homes, they’re more likely to be longer-term residents who respect their homes and their neighbors.

What does it mean to rent a condo?

Condos are typically owned, not rented. When you rent a condo, you’re likely leasing it from the owner. Alternatively, if you’re the condo owner, renting a condo means you use it as a rental property and charge rent.

Can you use a condo for nonresidential purposes?

There are condominiums that are used primarily as a place of business. These are almost exclusively within a condominium building or complex that is composed of other nonresidential condos. If you wish to purchase a condo to use for retail or offices, you probably won’t be able to purchase a residential unit beside other residential units and convert the space to commercial use — residential condos have strict rules limiting them to residential use only. Most residential condos will allow for some business use, however, such as working from a home office or giving piano lessons.

The bottom line: Should you buy a condo?

Condos can be a wonderful way to own a home, especially if you want to minimize maintenance responsibilities. But whether you decide a condo or a house is right for you, the next step is to start your mortgage approval online.

Shopping with a preapproval in hand will give you confidence. It’s also often a priority for sellers to know you have the money you’re offering. So if you want to make an offer on an attractive property quickly, getting a preapproval should be first on your list.

If you’re ready to buy a condo, start your mortgage application online today with a Home Loan Expert at Rocket Mortgage.

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