What to know about renting a condo or co-op apartment

Spring is almost here — and people looking for a new rental face a competitive market.

Asking rent prices in the U.S. jumped to $1,959 in February, according to Zillow Group’s latest Rental Market Report. That’s up just 0.4% from the month prior, but a 3.5% increase from a year ago.

The national rental vacancy rate remained flat at 6.6% by the end of the fourth quarter of 2023, according to the Federal Reserve.

Vacancies have increased in some cities due to new builds, and more new apartment buildings are expected to hit the rental market in 2024. Yet, some cities have few open apartments. New York City’s vacancy rate recently hit 1.4%, the lowest level since 1968.

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Consumers hunting for a new place may encounter different types of rental properties available on the market, from straight-forward rental buildings to properties that may come with their own particularities, such as condos and housing cooperatives.

“Buildings really determine their own policies for what an owner can do if they decide to rent out the unit and for how long, and what the requirements are for doing that,” said Carlo Romero, a StreetEasy concierge.

That means if you are looking at a rental, you should consider what the application process is like, any fees that are involved and what amenities you will have access to, experts say.

Properties such as condominiums and co-ops tend to carry high upfront fees, while traditional rental buildings are more likely to be under local rent regulation policies.

“In a condo or co-op building, upfront costs and fees are determined at the building level and they can vary significantly,” Romero said. “An application fee for renting a condo might be several hundred dollars, maybe even a thousand. And there are often move-in fees or move-out fees associated.”

To compare, for a typical rental building, according to New York state law, the application fee is capped at $20, and the security deposit is limited to one month’s rent, Romero said. Wisconsin has a similar cap where the application fee must not exceed $20.

Rhode Island has a new state law that prohibits landlords, rental agents and property managers from charging application fees to rental applicants beyond the actual cost of conducting certain background checks if needed.

In addition to the monthly rent, make sure to inquire about all the additional costs you may be responsible for in a potential unit.

Condos and co-op properties are primarily targeted to people who want to buy. They may appear in a rental marketplace platform if the owner decides to put the property up for rent.

There are key differences between condos and co-ops. A condo is a real estate property that one can…