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January 30, 2022

Is there any difference between renting a condo or an apartment?

A lack of apartment building construction combined with a glut of new condo construction has given birth to a new kind of landlord who buys one or two condo units and rents them out, the Ottawa Citizen reports.

While rents may barely cover mortgage, tax and other expenses in certain markets, the hope is that the rental income evens things off bit until the unit increases in value.

Fair enough, but are you sure you want to be the one paying the rent? First off,  rents for condominium apartments are anywhere from 30% to 40% more than traditional rental apartment buildings -- in the GTA, at least.

You’ll likely get a newer (albeit smaller) unit and, in many cities, you’ll have better access to the downtown core. But tenants who rent a unit in a condominium complex and are used to the standard leases of traditional apartment buildings, may be in for a few surprises.

Who’s in charge of repairs, for instance? While apartment property management companies can just as easily ignore you, condo tenants are never quite sure if it’s individual unit owner, the homeowner association, or the condominium corporation that’s responsible for the repairs?

Then there's the "sorry, my daughter is moving in" announcement. While condo tenants are protected like any other under Ontario’s Residential Tenancies Act and, in case of disputes, the Landlord and Tenant Board, it’s sometimes tricky to figure out what to do.

And there is always the potential ownership change. Commercial landlords tend to stay put. A jump in interest rates, however, could force local investor/landlords to bail, leaving tenants unexpectedly looking for new digs at the end of their lease.

What's your experience? Has being a condo tenant worked out? Was the premium in rent worthwhile?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...