If you ask most people to explain what a condo is, they'll tell you, "It's like an apartment, but you own it." Or, "It's like a home, but without a yard." Both of these descriptions are mostly true, but there's a lot more to it.
A condo (short for "condominium") is a private residence owned by an individual or family in a building or community with multiple units. Although condos are usually part of a larger building, "detached condominiums" also exist. What all condos have in common is that they share common areas -- such as yards, garages, rec rooms, or gyms -- with other units that the condo owners don't have to maintain themselves, making home upkeep that much easier.
For this convenience, condo owners pay dues to a condo board -- typically made up of elected condo owners -- who handle the hiring of landscapers, pool cleaners, and other repairmen for anything that must be fixed, from faulty elevators to gopher infestations in the common yard. This is much the way a homeowners association, or HOA, functions. (Leaky pipes and plumbing and/or roof repairs fall into more of a gray area, but generally if it's outside the walls of your unit, it's the board's responsibility to fix.)
According to Matthew Gordon Lasner, author of "High Life: Condo Living in the Suburban Century," the first condo in the United States was built in Salt Lake City in 1960 -- and since then, condos have truly taken off. Currently there are approximately 17 million privately owned condos in the U.S., which may have you wondering: Is a condo right for you?
Should you buy a condo? Here's how to decide
You can see why condos would be ideal for people who want to own a piece of real estate but don't want to worry about yardwork and maintenance. This makes condos ideal for retirees, young adults without kids, or anyone who would like to own property in more densely populated areas where detached single-family homes just cost way too much.
And the advantage of buying a condo over renting an apartment? One, condos tend to be better built and maintained than rentals. Plus, condos enable homeowners to gain equity in their property over time -- so why not invest your money in a home rather than throw it away on rent?
"Mortgage interest rates in today's market are extremely low. Most individuals seeking a $2,500-a-month rental could easily afford a mortgage of $500,000. Monthly payments would be similar if not the same," points out Jessica Peters, a Realtor with the Peters-O'Brien Team at Douglas Elliman. "Depending on the area and whether or not the buyer is savvy, the condo would appreciate during the length of residency. Whereas in a rental, there is no opportunity for a return on investment."
On the other hand, condos are not a great idea for fiercely independent people who like their own privacy and space, and don't want anyone telling them what they can and can't do with it. That's because in addition to collecting dues, a condo board also enforces rules and regulations that owners agree to abide by when they purchase their condo. The board can regulate everything from the size and number of pets you're allowed to the number and ages of the people living in your unit. Retirement condo communities, for example, can legally require that all long-term residents be over the age of 55.
So if you're looking into buying a condo, make sure to study up on the rules (called covenants, conditions, and restrictions, or CC&Rs) before you commit to your purchase.
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Watch: Is It Smarter to Rent or Buy?