Can you explain the different classes of property? A,b or c

4 Replies

Hi, @Jason Kozlowski , it's really as much a subjective art as anything else. Here's how I think about it:

A class: White collar/upper-upper middle class, higher-end finishes, very safe neighborhoods, good schools. Cash flow might not be great, but good appreciation and solid tenants. Lots of families, young professionals.

B class: Working class/upper middle class; nice, not fancy finishes. Properties are clean and neat. Everyone from the successful plumber to the young, professional couples just starting out live here. Safe neighborhoods, maybe location isn't as good as A. Good balance of cash flow/appreciation.

C class: Bit more transient, properties are not very well kept. Perhaps some cars on blocks or couches on the front porch. Really good cash flow, cheap properties, little to no appreciation. Tenants will turn over more, higher chance of evictions. Much more work in property/tenant management.

D class: war zone. not for the faint of heart.

@Jason Kozlowski there is no specific definition.  Some people use ABC come use ABCD, some add F.  It is just a very general guideline to categorize really nice properties from average properties from weak properties.