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The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Klaus Vedfelt/Getty Images October 18, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Troy Segal is Bankrate's Senior Homeownership Editor, focusing on everything from upkeep and maintenance to building equity and enhancing value. Jeffrey L. Beal, president of Real Estate Solutions, has 40 years' experience in multiple phases of the real estate industry. Bankrate logo

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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo

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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Choosing a place to live comes with a lot of big decisions, but deciding on the type of housing that fits your needs and lifestyle is the first step. Many people like the convenience and flexibility of living in an apartment, especially if they are new to a city or don’t want the Let’s explore what an apartment is and who is best suited for apartment-style living.

What is an apartment

Other names for apartments

While apartments and flats are generally similar residential dwellings, the word apartment is used commonly in the U.S. while the word flat is synonymous with apartments in the U.K. and Australia. The term flat comes from the old English word “flett,” meaning floor or dwelling, says Jason Doyle Spencer, a Dallas-based Realtor with Dave Perry-Miller Real Estate. Other similar terms for the same type of residential dwelling are walk-ups and brownstones, which are actually row houses that can be comprised of individual apartment units, says Tristen Heimann, director of residential rentals with Luxury Living Chicago Realty. Brownstones and walk-ups (as that name implies) don’t have elevators, unlike apartments in large buildings, however. Apartments may also be referred to as high-rises or townhouses. High-rises are often found in large cities, and as their name suggests, they’re tall buildings that contain dozens, even hundreds of apartments. , and are often three, four or five stories tall.

Types of apartments

Depending on where you live, you might find a few different types of apartments if you’re looking to rent or purchase property. Options include:

Rentals

Rental apartments may include units in multifamily homes, high-rise buildings, or other types of multi-unit buildings. Renters typically sign a lease, often with a term of one to two years. Generally, renters have a building or property manager that’s responsible for unit maintenance.

Condos

Rental have many similarities, often having similar amenities such as manicured green spaces and shared walls. Condos are units within buildings that are owned by individuals instead of being leased. Owners of condos must pay for the maintenance of the unit through monthly carrying charges (aka ) and ; they also pay . A condo owner often has the option of renting out the unit to a tenant and earns equity by making monthly mortgage payments.

Co-ops

A works slightly differently than a rental apartment or condo, though it may also have similar amenities. Co-ops are also units within buildings, though the units are jointly owned by a housing cooperative, a corporate association of the building’s residents. So instead of purchasing a particular unit in a building, you’re buying shares in this resident-owned housing corporation. In exchange, you get to reside at the property: Your shares take the form of the apartment. Co-op owners pay monthly maintenance fees, which can be partially tax deductible, since the building’s mortgage payments and property taxes are rolled into them. They don’t pay property taxes on their own. Co-ops are common in large cities like New York.

Should I rent or own an apartment

Deciding whether to own an apartment or lease it often depends primarily on your financial situation: income, assets and creditworthiness (which impacts your ability to get a mortgage to buy a home). Obviously, renting requires less money than owning does. However, in the inflationary environment of the early 2020s, the gap between the monthly costs of renting and of homeowning is fast closing. In fact, the Consumer Price Index showed both the rent index and the homeowners’ equivalent rent index rising by 0.8 percent. Another factor that can impact your decision is the stage of life you are in, Heimann says. “If you know that you are going to , then it might be wise to purchase,” he says. “However, if things are more transient with one’s career and personal needs, it makes a lot of sense to rent.” , even a smaller one such an apartment, means less financial flexibility and more costs beyond the mortgage, such as the fees paid to a condo board, property taxes and ongoing repair and maintenance expenses to the inside of the unit (which is the owner’s responsibility). “Not being tied down with a mortgage and typically having resort-level amenities are appealing for many renters,” Heimann says.

Pros and cons of living in an apartment

Pros

Affordability/flexibility. A rental apartment is less of a commitment than a home you own, allowing people to move to another apartment complex or to one in another part of the city or the country within a year or two. You also can choose from a shorter-term or long-term lease for rentals, depending on your needs. Access to multiple amenities. Living in an apartment has advantages, including access to amenities such as security, parking and trash pickup. Many apartment communities offer on-site fitness centers, swimming pools, sports courts, dog parks and even pet-washing stations, says Greg Curci, executive vice president at Morgan Properties, an apartment management and investment firm in King of Prussia, Pennsylvania. Units are move-in ready. Before you move in, rental apartments should receive a thorough cleaning, fresh paint and clean or often brand-new carpet, Spencer says. (If you plan to stay there for more than a year, ask how often the unit will be refreshed.) However, this may not be the case if you buy a condo or co-op, unless your specifies it. Expenses are typically fixed. Renting an apartment is a more accessible option for many people compared to owning a house since the only upfront cost is usually a security deposit and first month’s rent, Curci says. Condo fees and maintenance fees for co-ops are generally fixed costs as well (though they can and often do rise each year). No hassling with maintenance. “From a convenience standpoint, a renter is spared the aggravation of dealing with repairs and maintenance to their home,” Curci says. All maintenance such as repairing a garbage disposal is conducted by the landlord.

Cons

You won’t build equity. Sure, there are fewer upfront costs to renting an apartment. But you lose out on the opportunity to acquire an asset and build long-term wealth through ownership. And, today, there are several loan programs designed for that require little to no money down, as well as first-time homebuyer assistance programs to help with the down payment and closing costs. Lack of parking. Parking can be a challenge for those who reside in apartment complexes without allocated parking, says Holly McQueen, vice president at GMH Capital Partners, a Newtown Square, Pennsylvania-based real estate investment company. “This can also pose a problem for visitors because some areas require permits or payment for street parking,” she says. Limited privacy. Living in an apartment means you’ll likely share walls and you probably will have people living above and/or below you. And that might lead to more noise, less privacy and annoyances — like smoke or odors penetrating into your unit. Restrictions. Some apartments don’t allow pets at all, or have strict guidelines about how many and what kinds of pets you can keep in your unit. There could be other restrictions, as well, that conflict with your lifestyle. For instance, some apartments prohibit smoking or have no storage space for bikes. Lack of personalization. If you don’t own your apartment unit, you might be restricted to what you can do with it. Many apartment leases spell out that renters cannot change appliances or install fixtures — including . “Often, paint, permanent stickers and major modifications are not allowed or will need corporate approval,” McQueen says. “The cost of restoring the apartment is the resident’s responsibility and [that] could be more than the deposit.” With owned apartments, you have no say over or the common areas’ decor, even though you help pay for these things. Limited expansion. Even if you own your apartment, it can be difficult to or , as you often share walls with your neighbors. Unless you also buy the unit next door, your expansion opportunities are limited.

Who are apartments best suited for

While many apartment dwellers are younger, single people who move often for jobs or don’t want the obligation of a mortgage, the demographics of individuals living in apartments is changing. There are more Gen Xers and Baby Boomers who want simpler living arrangements and to leave the hassle of maintenance behind as they age. Many apartments are in effect like assisted-living facilities — they are often single-level and have a staff on call — which makes easier. According to 2022 data from the Joint Center for Housing Studies at Harvard University, were headed by an adult over age 65 in 2019, and that number is set to increase by 4 million by 2039. The maintenance-free lifestyle is another big reason why people are renting, Heimann says. “Many Baby Boomers are relocating back to the city and downsizing into these new amenitized buildings,” he says. “They do not need to worry about mowing the lawn, shoveling snow, fixing appliances or even replacing the light bulbs. It’s all taken care of within 24 hours at most luxury apartments.” In reality, apartments are suited for anyone looking to stay in a prime location for a cheaper price near shopping, restaurant and entertainment centers, often at a more affordable cost than buying a condo or single-family home, Curci says.

House type Who it’s right for: Apartment Apartments are suited for anyone looking to stay in a prime location near shopping, restaurant and entertainment centers, often at a more affordable cost than buying a condo or Condos appeal to those looking for a lower-maintenance living, home with a sense of security, opportunities to be social with neighbors, among other factors. Townhouses are a particularly good option or first-time homebuyers or other budget-minded home buyers who want more space than typically afforded in a condo. Modular homes are enticing to empty-nesters looking to downsize, couples looking for backyard units like tiny homes or families looking to upgrade their dated properties in nice but expensive neighborhoods. Single-family homes are best for families who prefer a huge yard and plenty of room to spread out. Others still prefer a low-maintenance condo or townhome that includes benefits like landscaping, snow removal and exterior maintenance. Multi-family homes are best for those who are interested in getting into real estate investing and are comfortable with the added responsibility and time commitment that comes with being a landlord. At between 1,000 and 2,000 square feet, bungalows are a great option for young families looking for a starter home or retirees hoping to downsize in a home without stairs, or single homeowners who want the single-family home lifestyle without managing a huge property. Co-ops are most often found in major cities, and they can be good for those looking for security or neighbors who largely adhere to the building’s rules and policies. Typically capped at one-and-a-half stories and part of a larger association, patio homes are best for homeowners who don’t want to deal with stairs or maintenance. Ranch homes are ideal for anyone who prefers single-story living. Singles, couples and families with children can find something to love about a ranch home. SHARE: Troy Segal is Bankrate's Senior Homeownership Editor, focusing on everything from upkeep and maintenance to building equity and enhancing value. Jeffrey L. Beal, president of Real Estate Solutions, has 40 years' experience in multiple phases of the real estate industry.

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