Class A, B, C or D neighborhood

[Pete Tarin]

When researching rental properties for potential investment.  How does one determine the class?  Is there an option on Zillow or Realtor?

[Aristotle Kumpis]

This is a subjective question, and everyone will have a different answer to the same area. But overall, classifications are separated by income, schools, and other places of business in the community. Just know that A class areas tend to have very high income earners, and D does not. A areas are better for appreciation, but are horrible for cash flow. I would not recommend to invest in a D area. C areas are lower price point homes and better for cash flow, but usually not much appreciation. And B is kind of in between.

You usually do not find laundry mats, check cashing places, or liquor stores in an A or even B area. I usually see those in C and D areas. And I never saw a Whole Foods or Traders Joe's in a D area.