At first, they may be hard to tell apart. They come furnished or unfurnished, pro pets or no pets. And the prices are comparable, whether they`re in a modern high-rise, a vintage graystone or a refurbished factory.
So, what`s the difference between renting a condo and renting an apartment?
”The differences are subtle. It may be more a preference of lifestyle than location, cost, amenities or leasing terms,” says Corey Sapstein, a leasing consultant for Sudler-Marling who placed more than 40 renters into condos this year.
”Condo buildings tend to be more stable because only a small percentage of owners select to rent,” she says. ”Plus, I think the condo market offers more distinctive properties. If someone wants a prestigious residence in a prime location, most of those buildings are condos, especially downtown.”
Looking for a furnished four-bedroom apartment on East Lake Shore Drive with all the amenities? Try the condo market, and expect to pay up to $8,000 per month. However, impressive in its own way is a seasoned 450-square-foot studio in Sherwin on the Lake, a Rogers Park condo building whose tenants enjoy a private beach and the ambience of a classic beachfront resort for as little as $375 per month.
David and Sally Mueller rent a studio in the building, and recently purchased and remodeled a one-bedroom there. The studio was David Mueller`s apartment before the couple were married and now serves as their office.
As a renter for two years, David Mueller enjoyed the freedom of not owning and the sense of community that comes with living in a building in which most people own their home. Now they appreciate the security of owning too.
”If you rent or own here, I think it is an excellent deal,” David Mueller says. ”This is a self-managed building, which keeps the assessment down and the rents low. If something needs to be done, we first look to someone in the building who has the expertise to handle it.”
Mueller, who does private security consulting, was involved on the condo association security committee and continues to address security questions for the building as well as for individual tenants.
”Everyone really takes pride in the building, even renters, and because most people are into wind surfing, we all share a common interest. It`s a nice atmosphere. More like a family than a group of residents,” says Sally Mueller.
Buying into it
The Muellers` story is not unlike those of many condo renters who end up purchasing their rental or another property in the building in which they`re living. In fact, at Imperial Towers, an 860-unit condo building at 4250 N. Marine Drive, one renter per month buys his or her unit.
Many condo owners offer tenants the ”right of first refusal,” in the event the property goes on the market. Or, at the time of lease, owners may simply let it be known that the condo is for sale, if the renter is interested.
For Sandy and Judy Bank, the ”purchase option” was an important factor in the couple`s decision to rent an elegant three-story condo in the Newbury Mansion, which was converted into a six-unit condominium building in 1982. The owner of the Banks` condo also lives in the Gold Coast building.
”It`s an extraordinary building, but, with renting condos, there are no long-term guarantees. The owner could sell, decide to take occupancy or any number of things,” says Sandy Bank. ”With an option to buy, we feel we have some security. But, by renting, we also have the opportunity to look around for a year before we make a commitment.”
That homey feeling
The Banks, who moved from a large house in the suburbs into the city, represent a segment of the rental market that is looking for an interim home and believes condos ”feel more like a home.”
”We`re empty nesters,” Sandy Bank says. ”Moving into a smaller home and into the city was a big adjustment. We weren`t sure what kind of place we`d feel comfortable in, and I think a condo was the perfect choice. We have a place that feels like home, but we also have the flexibility to find something we may like better.”
The Banks found their condo with the assistance of Sapstein, who knew the property was listed for sale but asked the owner if he was interested in renting.
Any number of brokers can help renters in their search, assist with the paperwork and expedite the approval process. Or, renters can find a wide selection of condos for rent listed in the newspaper. If a specific building catches your eye, call the building`s management company or a broker and ask them to keep you posted if a rental turns up.
More for your money?
”In comparing condos to apartments, we found condos to be 20 to 30 percent less expensive when comparing cost per square foot,” says Sandy Bank. Sapstein agrees that condos may provide a better value but cautions about simply comparing prices.
”Condo owners are generally not looking to make a profit-they`re looking to meet their mortgage and assessments and protect their investment,” she says. ”Their first priority is usually to have a tenant that will care for their property.”
Pat Schroeder, who is co-owner of two rental condos in Imperial Towers, says she actually loses money on her two rental units, but is content to have tenants who are responsible and appreciative of the quality improvements she and her partner, Richard Janyia, recently made.
”We remodeled two condos with the idea that I would live in one and we would sell the other for a profit, so we really did things nicely. When we decided to rent them, we took the time to find the right people and even lowered the price to meet their budgets,” says Schroeder, who purchased a third unit in the building for her home.
”If we have a tenant who takes care of the condo, then we can keep rents lower,” explains Ben Culver, who rents two one-bedroom condos on the Near North Side and says rents have remained flat for the past two years, partly because of competition from nearby apartments.
Rules to live by
Also in condo buildings, the condo association sets the rules for renters. And it generally has final approval of all new tenants, whether they buy or rent. In most cases, the approval is as easy as with an apartment:
Renters usually must fill out an application, undergo a credit check and put down a deposit.
But some associations require thorough financial statements and references, and request that the prospective tenant appear before the board of directors, which may sound more ominous than it actually is.
”I considered it a courtesy as much as anything,” says Sandy Bank, who was asked to meet the board before it approved his rental application. ”It was nice to meet the other people who lived there and feel that we`re all part of a community.”
At Imperial Towers, the process requires a $120 fee, but that can be paid by the owner or the renter. Schroeder offers to split the fee with prospective tenants.
According to John Owens, president of the Lake Condominium Residence Association at 680 N. Lake Shore Drive, ”Our rental agreements are essentially an apartment lease, and the security deposit is at the discretion of the owner.
”The first responsibility for the condo lies with the owner, not with the renter, so if an owner is satisfied with the prospective renter and the paperwork is in order, we are very likely to approve the application.”
When considering a condo, here are some questions renters might ask to give them some insight into the property:
What is the owner`s intention for the property? Is the goal of the owner to sell, to remodel, to take occupancy or to maintain the unit as a rental?
Where does the owner live? Many owners live in the same building; others may live out of state or travel frequently. Some renters claim they haven`t seen their owner in years, and find that preferable to someone who may live across the hall.
How does the owner prefer to handle maintenance problems? Some owners allow the renter to take care of problems and deduct it from the rent. Others want to be informed about everything.
Does the condo association have plans for improvements over the length of the lease? Renters may want to avoid getting caught in a building whose lobby is scheduled for remodeling or in which other major construction is planned.
In general, find out who you`re renting from. After all, one of the distinguishing features of a condo rental is the owner, and most owners have little experience being landlords. They may be wise investors, excellent remodelers and nice neighbors, but, as Schroeder concedes, ”I probably don`t have the temperament to be a landlord. I prefer to rent to people I can trust and get along with.”
