What is this A, B, C, D, etc area?

Question

I’m new to the Real Estate Investment scene. I’ve been doing a lot of research on markets I’m interested in as well as a lot of research on BiggerPockets. Something that I’ve seen quite a few times now is the classification of of cities/neighborhoods such as A, B, C and so forth.

My question is how do I determine what areas should be classified as what? I get that A is great and F is really bad, but what constitutes the ratings? Is there a chart with specifics to look for in cities? A fear of mine has been purchasing property that needs quite a bit of work in not the best areas, but also not the worst. I’m worried about getting a fairly good deal but after rehab that I won’t be able to sell, or at least sell fairly quickly due to being in not the best area. Any advice and insight would be great. Thanks!

Scott Passman · Answer

@Freddy Neuhold There are no charts or anything like that.  Neighborhood ratings are a bit subjective and what one person may call a B another would call a C/C+.  In general:

A neighborhood- I would love to live there

B neighborhood- I would be happy to live there

C neighborhood- I would live there if I needed to, but it wouldn't be my first choice

D neighborhood- I would live there if I had no other choice

F neighborhood- I would call everyone I know to find a place to stay in order to not live here

"A" neighborhoods are the cream of the crop with the best locations, high end amenities/view right there, in the heart of the city.  "B" neighborhoods are often what you would think of as a nice suburb near amenities such as popular retails stores and restaurants with lots of parks and is well cared for.  "C" areas tend to be more run down with some increased crime.  May often see more stores like Dollar General, fast food, family owned small businesses etc. as opposed to larger retail stores.  "D" areas are run down neighborhoods with boarded up windows, abandoned buildings, high crime, and are overall poorly maintained and depressed.  "F" areas are flat out war zones and you want to stay the heck away from. These are generalities of course, but I hope it helps get the point across. Speaking to local investors, realtors, and property managers is a great way to get the rundown on the best and most desirable neighborhoods in areas you aren't familiar with.

Mark Fries · Answer

@Scott Passman

Masterful response...lol!!

Freddy Neuhold · Answer

@Scott Passman

Thank you for the info!