Interior view of a kitchen and living room in a modern condo

Understanding what a "condo" is can be a little tricky, but we've outlined some defining features.

At times, the world of real estate can seem a bit esoteric with its unusual and sometimes antiquated vernacular. Terms like “escrow” and “lien” aren’t commonly used in everyday conversation, and even some terms used to describe the basic features of a house can be confusing and occasionally misleading. (What's the difference between a sun-room and a solarium anyway?)

Single-family homes are easy to understand. Four walls of your own, floors, a roof, and a few doors and windows. Words like "condo," "townhouse," "courtyard home," and "attached home" are often used interchangeably when they actually mean different things. Here are the subtle differences are between a condo, an apartment, a townhouse, and a co-op condo, and more importantly, what those differences mean to you as a homebuyer.

What is the difference between a condo and an apartment?

Though the buildings may look the same, these two are perhaps the easiest to distinguish. Simply put, a condo is owned by the resident whereas an apartment is rented by the resident. Typically, condos are in multi-unit buildings while apartments can be found in a wider variety of buildings. Think of an apartment above a storefront in an urban setting or in two- or three-flats which are common in more established urban areas. 

The primary factor when choosing between a condo or an apartment is your plan for the future. If you plan to stay a while, it may be better to own your home and build equity than to rent. For a more temporary or seasonal home, renting can be a smart option.

What is the difference between a condo and a townhouse?

The differences between a condo and a townhouse get a little murky. In both cases, the occupants typically own their unit. In the case of a condo, the residents usually don’t own the land their home sits on, while in the case of most townhouses, the homeowners also own the land.

In a condo building, you may have neighbors on two sides of your unit as well as above and/or below. Rowhouses, as the name suggests, are taller, narrow buildings in a row, so residents may share just one or two walls with neighbors.

Though prices and local tax rates vary substantially, there are also differences when it comes to cost. If all other factors are equal, a townhouse tends to be the pricier of the two options. Given that the homeowner also owns the land their townhouse sits on, the tax burden tends to be somewhat higher.

The tradeoff is, depending on what you homeowners’ association (HOA) covers, your fees may be lower on a month to month basis in a townhouse compared to a condo. This is because condo HOA dues typically cover much more (such as the maintenance of the entire building) than townhouse fees in which the owner may be responsible for building maintenance.

What is the difference between a condo and an attached home?

It sounds a bit like a riddle: All condos are attached homes, but not all attached homes are condos. We’ve already defined condos based on their primary characteristics of being occupant-owned with the likelihood of having neighbors to your sides as well as above and below. In an attached home, you’ll share at least one wall with a neighbor. Much like a townhome, you’ll also likely own the land your home sits on, making you responsible for the taxes on it. Also, an HOA will almost always cover common area maintenance and, in some cases, the roof and exterior maintenance of your attached home. 

Attached homes more closely resemble their single-family home counterparts than any other home type we’ve described here. The classic suburban duplex is a perfect example of an attached home. Increasingly common are “courtyard homes” or “quads” which are quite popular in active adult communities. Attached homes are a good fit for homebuyers who enjoy having a yard and want a more suburban feel in their neighborhood. Many modern examples are built to emulate a single-family home with built-in privacy fences or walls.

What is a co-op condo?

Finally, we have the somewhat unusual case of a co-op condo. These are most frequently seen in larger cities like New York; in Manhattan alone, co-ops make up nearly 75 percent of the city’s available housing. Co-ops are a type of condo and may look very similar to a standard condo building, though there are some key differences buyers should know about before purchasing.

In a standard condo arrangement, the homeowner owns the condo and pays the HOA fees for upkeep of the building. In a co-op arrangement, the homebuyer is buying shares in a corporation that owns the building. These shares then allow for them to lease a unit in that building.

In a co-op, maintenance, property taxes, building improvements, and much more are usually included in a fee paid on a monthly, quarterly, or annual basis. While not always the case, these fees can be substantially higher than in a comparable condo building. In most cases when it comes to property taxes, homeowners can deduct their share of the building’s property taxes much like a condo owner can deduct their property taxes.

Perhaps the most well-documented difference is that, in a co-op, the building is “governed” by a co-op board rather than an HOA. In a co-op, you’ll need to be interviewed by the board or at least a portion of it. This is a notoriously difficult process where the board will ask about your financial situation along with a host of other questions. This is where it pays to have a real estate agent who understands co-op boards or, better still, has a relationship with the board of the building you wish to live in.