Renting condos and apartments are distinctly different challenges to tackle. Today, we’ll give you the information you need to make the right decision.
We’re all striving towards the goal of homeownership. This rings especially true for the rapidly appreciating Austin market, where one’s purchasing power diminishes as the market continues to shoot up. The struggle is real, and I’m here to help. However, when we must lease, there are two different types of assets: centrally managed apartment communities, and privately owned condos/houses found on the MLS.
For the sake of this post, let’s disregard houses. Houses are great and have many advantages. Some folks will pay a premium for the privacy and yard, but drawbacks include having roommates, yard work, maintenance of an outdated structure, much higher utilities, and typically a less walkable location. But let’s control for that variable and talk about the differences between leasing condos vs apartments, from major to subtle.
This post has three main parts: differences in the seach process, pricing aspects, and general living experience of apartments vs condos.
Since nearly all apartments require a 60-day notice, you’ll know two whole months in advance which specific units are available. Apartments are thus great for my clients who approach me months before the anticipated move-in and prefer to lock down a place well in advance in order to sleep at night.
Condos are trickier. Most condos/houses come up on the market vacant and ready for immediate move-in. In this hot market, landlords will seldom hold a condo for more than 2 weeks. Thus, the search is tighter. Although a condo will sometimes pop up with 30 days left on the current lease, this is usually the exception to the rule. I recommend my clients start touring condos with me NO MORE THAN one month ahead of projected move-in. I also have clients assess how much double-rent they are willing to pay for the ideal new place if the dates don’t line up perfectly.
So what’s the process before we actually tour? As a Realtor AND apartment locator, I have two primary databases at my disposal: Smart Locating and the MLS. Smart Locating is a great database of every single apartment community in town. It has picture galleries, floor plans with approximate pricing, and administrative info for each property. When I send my clients a list of applicable properties, they can go in and rate each one on a 5-star scale while leaving comments. Since the amount of apartment properties are finite, it’s usually a one-time list.
Conversely, with the MLS, each listing is privately owned and units in the same condo community can be extremely different in terms of finish outs. What I do is set up an “auto-search” for my clients that takes their criteria and emails them listings that fit as soon as they hit the market. This eliminates all that poking around on Zillow for listings that aren’t always accurate—or much worse, don’t even exist!
I recommend all my clients draft an “Intro Letter” to the landlord to tell them about how awesome of a tenant they’ll be. It has worked multiple times in the past to give my clients the edge!
Locking down an apartment is much more straight-forward than a condo. When you fill out the application at the community and pay the deposit/app fees, you automatically have that unit reserved for you. With condos, the landlord has the right to collect multiple apps and cashiers checks before making a decision. This waiting period of uncertainty can be very stressful, and I always make sure my clients identify a back-up plan should the app not be accepted. With condos, I play a bigger role in handling your paperwork and I recommend all my clients draft an “Intro Letter” to the landlord to tell them about how awesome of a tenant they’ll be. It has worked multiple times in the past to give my clients the edge!
Move-in costs are much higher when going with a condo. In tight rental markets like Austin, condo landlords typically require ONE FULL MONTH’S RENT as a security deposit in addition to an average app fee of $50/person. With apartments, the stiff competition in the market to fill up all the units once a building is complete yields plenty of specials, such as $99 move-ins and waived deposits. Even with a special, you likely won’t see 1/1 deposits exceeding $300 and 2/2 deposits in excess of $500. This is in addition to an app fee around $50 and an admin fee anywhere from $100-400, typically depending on how pricey the property is.
How do apartments and condos differ in pricing, you ask? Condos are offered at a set rate, and negotiations with the landlord are possible depending on variables such as Days On Market, unit condition, and strength of the client’s app. I love negotiating down the price for my clients and do it for sport.
Apartments, however, won’t negotiate due to Fair Housing laws. Their prices change daily, though: nearly all newer, more modern apartment communities in town use special pricing software called “Yieldstar” or “LRO” in an effort to maximize rental revenues. This algorithm based system looks at many variables, principally supply & demand, to determine the maximum price the market is willing to bear for a particular unit. If one community, say Gables Park Plaza, has more 1/1’s slated to hit the market than usual in a month or two, the price will drop. If there’s only a couple 1/1’s coming up, the price will be abnormally high. Although this is a pain in the rear to keep up with, it helps me bring major value to my clients because at any given point in time there is ALWAYS a community with awesome prices due to this software. You just need a guy like me who’s constantly on top of the market as your right hand man!
When it comes to your renewal rate, independent condo owners are typically more subjective. If you’ve been a good tenant and established a relationship with the owner, they may go easy on you. Remember, vacancy and Realtor fees aren’t cheap for them, and they’ll usually negotiate. One major drawback of condos is that the landlord can refuse to renew you for any reason, chiefly when they want to sell the unit. Apartments, on the other hand, are typically owned by investment trusts and will usually have a machine determine the renewal rate. Since they have so many units and it’s hard to communicate with the real decision makers, it’s usually harder to whittle down your renewal rate.
So we’ve learned about the process of leasing these units and how their pricing works. But what about the actual living experience?
When something breaks, there are different processes to get it fixed. Apartments will typically have a dedicated maintenance team along with some sort of guarantee of speedy service. On-site mgmt offices make it easy to access those who can help. Condo landlords can be hard to reach and have a wide range of quality for the repair people they send out. I once had a landlord who lived out of the country and didn’t have a professional mgmt company on the case, so getting an AC guy out to the place in the nasty Austin summer was a challenge to say the least!
Although there actually is no such thing as “condo specs”, you will typically find they have better insulation between units and are more likely to be built with concrete in between the floors.
Since condo communities tend to have well-established owner-occupants as the majority of their residents, they tend to be quieter and more laid back. Trust me, you don’t want your next door neighbor who owns their condo to file noise complains against you to the HOA because you felt it kosher to blast Jay-Z’s “The Blueprint” in its entirety after getting back from Sixth St. That being said, condos are typically built to higher specifications, being that people buy them. Although there actually is no such thing as “condo specs”, you will typically find they have better insulation between units and are more likely to be built with concrete in between the floors. Some properties are built better than others, and fortunately I know the ones that’ll have you sleeping like a baby.
If an active environment of like-minded young professionals is what you seek, apartments will likely appeal more to you. To stay competitive to a revolving door of urban renters, apartments typically have bigger and better amenities. Want the best Vegas-style pool scene in town for $1300/month? I’ve got you covered. Apartment communities will regularly throw resident events so you can get to know your neighbors. Some of my best friends in town are my neighbors at the Skyhouse high-rise on Rainey St.
Well, there you have it. From the rental process, to the kind of deal to expect, to the actual living experience; apartments and condos are two distinctly different renting experiences. After facilitating over 400 lease transactions in my 5+ year career here in Austin, you can bet that I’ll be here to help you choose the right one for you—and of course find the best deal on the market.