Grading Investment Properties

[Neil Whitney]

I'm relatively new to investing, have 6 doors in two years. My question is what are these a, b, c class properties and who or what determines this?

[Jeff Greenberg]

There is a lot of discussion and disagreement on this. Age of the property can be a factor, but not always.  I like to look at it as the type of tenant that would be attracted to the property and the neighborhood. This also depends on the community.  An A property is going to attract high end Dr., lawyers, and other high net worth individuals.  B will attract young professionals and white collar employees.  C will attract service people and blue collar.  D will attract those that cannot afford or not welcome in the other areas.  Low wage earners, drug dealers, low end prostitutes, gang members, and felons.  You and your tenants make your determination as to the class.  The property class should also match or be lower than the neighborhood class.  You don't want the reverse.