Updated about 2 years ago on . Most recent reply
A class vs C class
What are the pros and cons of investing in A-class vs C-class areas?
Personally, I think of C-class like Jordan Belfort's famous pink slips. First, the cons of C-class, aside from section 8, C-class has more fluctuation in price, more tenant problems (vacancy expenses, evictions, etc), and local crime. It is just more labor intensive in general. Of course, many of these headaches can be delegated to a property manager. The pros - cash flow, cash on cash return, and potential for more significant appreciation in gentrifying areas.
Conversely, A-Class is analogous to the S&P 500. It has more reliable tenants (some of which even fix the property up), more stable and predictable appreciation, and just over-all less work. The cons - very hard to cash flow off the bat, especially with a low down payment and... I'm not sure.
I'd love to hear other opinions on the topic. Does this look accurate in your experience?