Condominiums and co-ops are great choices for first-time homebuyers, singles, couples and roommates, and down-sizing families, but they are very different types of property ownership.

As an investment, a condo owner is free to rent out their unit, but some HOAs impose limits on the number of units within the community that can be rented out or restrictions that prevent short-term rentals or the use of some amenities, because a high number of renters raises the HOA’s exposure to risk.

Condominiums are usually located in the most in-demand areas, near plentiful jobs and entertainment districts. You’ll own your unit and share amenities with other owners such as garage parking, fitness rooms, and swimming pools. You’ll pay a monthly, quarterly, or annual homeowners association (HOA) fee which is levied to take care of common areas. HOA fees vary widely, depending on amenities and the market.

Co-op owners have a percentage ownership of their building and property, based on the size of their units, but they don’t own their individual units. In the Lansing area The Ponds, located in Okemos, is a co-op operated like a corporation in which homeowners are shareholders. They have the right to approve new owner-occupants and can reject them based on financial requirements. They can’t discriminate against protected classes, such as race, creed, age or gender. Most co-ops don’t allow renters; if they do, they impose restrictions such as rental terms and credit worthiness.