Quick answer
On our New York City defaults, an $850,000 condo with $1,200 a month in common charges costs about $6,542 a month to own, against $4,220 to rent. Over 10 years renting comes out roughly $247,000 ahead. Without the common charges the two options would be close to even. Condo fees, special assessments and slower price growth are usually what make renting the better choice.
Is it better to buy a condo or rent?
In high-cost cities with large monthly fees, renting a comparable apartment is usually the better financial choice. Buying a condo tends to win only when fees are modest, the price is low relative to rent, and you stay for many years. On our New York City defaults, an $850,000 condo with $1,200 a month in common charges leaves the buyer roughly $247,000 behind a renter after 10 years. Remove those charges and the gap almost disappears. This rent vs buy condo calculator puts the fees at the centre of the comparison, where they belong.
Condo fees are the monthly charges owners pay the building’s association for shared costs and reserves. Depending on the country they’re called HOA dues, common charges, strata fees or service charges. They behave like a second rent that never builds equity, and they usually rise over time. The calculator increases them each year in line with rent growth.
How to use the rent vs buy condo calculator
- Price and comparable rent. Use rents for similar units in the same building or on the same block.
- Monthly fees. Enter the current common charges from the listing or the offering plan. For a co-op, enter the full maintenance charge and set property tax to 0%.
- Property tax. For condos, use the unit’s actual tax bill as a percentage of the price. Some new NYC developments have tax abatements that later expire. If so, model the full tax.
- Maintenance. Keep this lower than for a house, because the building handles exterior and structural work. Our NYC preset uses 0.5% of value for your unit’s interior.
- Appreciation. Be cautious. Try one percentage point below what you’d assume for a house.
- Buying and selling costs. The NYC preset uses 4% to buy and 7% to sell, because city and state transfer taxes add to standard fees.
Worked example: buying vs renting an $850,000 NYC condo
Upfront. A 20% down payment of $170,000 plus 4% closing costs of $34,000 comes to $204,000.
Mortgage. A $680,000 loan at 6.3% over 30 years. The amortization formula, with a monthly rate of 0.525% over 360 months, gives about $4,209 a month.
Monthly cost to own versus rent:
| Monthly, year one | Condo owner | Renter |
|---|---|---|
| Mortgage (principal + interest) | $4,209 | — |
| Common charges | $1,200 | — |
| Property tax (0.9%) | ~$638 | — |
| Unit maintenance (0.5%) | ~$354 | — |
| Insurance (0.2%) | ~$142 | — |
| Rent | — | $4,200 |
| Renter’s insurance | — | $20 |
| Total | ~$6,542 | ~$4,220 |
The common charges alone make up almost a fifth of the owner’s monthly bill. Over 10 years, rising at 4% a year, they add up to about $173,000, none of which builds equity.
After 10 years. The condo is worth about $1.14 million, with about $574,000 left on the loan. After 7% selling costs, the owner keeps equity of roughly $489,000. The renter, who invested the $204,000 upfront and the monthly difference, has about $736,000. Renting is ahead by roughly $247,000. The break-even rent is about $5,430: buying wins only if a comparable unit rents for more than that.
How much do condo fees change the answer?
This is the most important table on the page. Every input except the monthly fees stays at the NYC defaults, and the horizon is 10 years.
| Monthly common charges | 10-year result | Break-even rent |
|---|---|---|
| $0 | Renting ahead by ~$6,000 (buying pulls ahead in year 11) | ~$4,230 |
| $800 | Renting ahead by ~$167,000 | ~$5,030 |
| $1,200 (default) | Renting ahead by ~$247,000 | ~$5,430 |
| $1,600 | Renting ahead by ~$328,000 | ~$5,830 |
On these assumptions, every $100 a month of condo fees costs about $20,000 of net worth over 10 years once you count the investment return that money would have earned. It also raises the break-even rent by about $100. When you compare two listings, a cheaper unit with higher fees can easily be the more expensive one to own.
Other condo-specific risks
Special assessments. If the building’s reserves are thin, owners pay for major repairs directly. Ask for the reserve study, the past two years of board minutes and any planned capital projects. A building that has kept fees artificially low may be heading for an assessment.
Slower appreciation. A condo owner holds a small slice of the land, competes with new towers nearby and depends on how well the building is run. Here’s what happens with different appreciation rates on the NYC defaults over 10 years:
| Appreciation per year | 10-year result |
|---|---|
| 2% | Renting ahead by ~$336,000 |
| 3% (default) | Renting ahead by ~$247,000 |
| 4% | Renting ahead by ~$150,000 |
Rules and restrictions. Condo bylaws can limit renting out your unit, renovations and pets. That affects both how you can live in it and your options if you move away.
Rent level. The renter’s advantage shrinks as comparable rent rises. At $5,000 a month instead of $4,200, renting’s 10-year lead drops to about $86,000, and buying pulls ahead in year 19.
Time doesn’t rescue a high-fee condo. For many homes, staying longer makes buying look better. Here, renting’s lead keeps growing, because the common charges rise every year along with rent:
| Years you own | Renting ahead by | Break-even rent |
|---|---|---|
| 5 | ~$159,000 | ~$6,280 |
| 10 | ~$247,000 | ~$5,430 |
| 15 | ~$363,000 | ~$5,120 |
| 20 | ~$514,000 | ~$4,940 |
The break-even rent does come down the longer you stay, so a cheaper condo or a pricier comparable rental gets closer to the line over time. But at $4,200 rent and $1,200 a month in fees, this condo doesn’t break even within 20 years.
Co-op vs condo: what changes in the calculation
| Condo | Co-op | |
|---|---|---|
| What you own | The unit (real property) | Shares in the building corporation |
| Monthly charge | Common charges; property tax billed separately | Maintenance that includes property tax and any building mortgage |
| How to enter it | Fees + property tax % | Full maintenance in fees, property tax 0% |
| Buyer approval | Usually only a right of first refusal | Board approval; can reject applicants |
| Down payment | Set by your lender | Often a higher minimum set by the board |
| On sale | Standard transfer taxes | Transfer taxes, plus a flip tax in many buildings |
| Subletting | Usually more flexible | Often restricted |
As a quick test, take the default condo and enter it as a co-op: property tax at 0% and maintenance of $1,900 a month (the $1,200 common charges plus roughly the $638 tax, rounded up). Renting is ahead by about $263,000 over 10 years, which is in the same range. The structure matters less than the total monthly cost.
New York transaction costs to know
According to the New York State Department of Taxation and Finance, the state real estate transfer tax is $2 per $500 of consideration, which works out to 0.4%, and it’s generally paid by the seller. Buyers of residential property costing $1 million or more also pay the 1% “mansion tax”. Sellers also pay New York City’s Real Property Transfer Tax, and buyers who take out a mortgage on a condo pay the mortgage recording tax. Co-op share loans generally aren’t subject to recording tax, because they aren’t mortgages on real property. An $850,000 purchase stays under the mansion tax threshold. At $1 million or more, raise the buying costs input.
Condo vs renting: decision checklist
- Have you entered the actual common charges, and checked how much they’ve risen in recent years?
- Have you read the reserve study and board minutes for planned work and past assessments?
- Is any tax abatement expiring during your horizon?
- Have you tested appreciation at 2%?
- Is your comparable rent for the same size and quality of unit?
- Do the bylaws allow you to rent the unit out if you move?
- For a co-op: what’s the flip tax, the minimum down payment and the sublet policy?
Related tools and reading
- Buying a condo vs renting: the long-form guide.
- Buying an apartment vs a house: how the two compare as investments.
- United States rent vs buy calculator: national defaults if you’re outside NYC.
- Rent vs buy a house calculator: the same comparison for a single-family house.
- Hidden costs of owning a home: what else to budget for.
These are illustrative estimates, not financial advice. Have a real estate attorney review the building’s documents before you buy.
Frequently asked questions
Should I buy a condo or rent?
Buy if a comparable apartment rents for more than the calculator's break-even rent and you plan to stay long enough to recover the buying and selling costs. In expensive cities with high monthly fees, that threshold is often well above market rent. Our NYC defaults put it at about $5,430 a month, against $4,200 actual rent. In cheaper markets with modest fees, buying a condo can win.
What do condo fees cover?
Condo fees, also called HOA dues, common charges or service charges, usually pay for building insurance, staff, cleaning, shared utilities, repairs to common areas, management and a contribution to the reserve fund. They don't usually cover your unit's interior, your contents insurance or, in a condo, your property tax. Read the building's budget to see exactly what's included.
What is a special assessment?
A special assessment is a one-off charge to owners when the building needs money its reserves can't cover, such as a new roof, a facade repair or an elevator replacement. It can run to thousands or tens of thousands of dollars per unit. Before buying, ask for the reserve study, recent board minutes and any planned capital projects.
What is the difference between a co-op and a condo?
With a condo you own your unit outright and pay common charges plus your own property tax. With a co-op you own shares in a corporation that owns the building, and you pay a single monthly maintenance charge that includes your share of the building's property tax and any underlying mortgage. Co-op boards can reject buyers, often require larger down payments, and may charge a flip tax when you sell.
Do condos appreciate as fast as houses?
Often not. Much of a house's long-run value growth comes from the land under it, and a condo owner holds only a small share of the land. Condo values are also affected by new supply nearby and by the building's own finances. Test the calculator with appreciation 1 percentage point below what you'd assume for a house.
How do I enter co-op maintenance in the calculator?
Put the full monthly maintenance into the monthly fees field. Because it already includes property tax, set the property tax input to 0% to avoid counting it twice. If part of the maintenance is tax-deductible, the calculator doesn't model that, so the result will slightly understate owning.