Properties are classified into different categories based on their quality not just by investors, but by property appraisers as well, location, and characteristics, commonly referred to as Class A, B, C, and D.

Class A properties are the highest quality buildings, often newly constructed within the last 15 years, featuring top-notch amenities, high-income tenants, and prime locations. These properties demand the highest rents and typically have the lowest vacancy rates, making them a secure investment with little deferred maintenance.

Investors looking for stable returns with minimal risk often prefer Class A properties.

Class B properties are a step down from Class A. They are generally older, have lower-income tenants, and may or may not be professionally managed. These properties are still well-maintained but may require some renovations to upgrade to Class A- or B+ status. They present "value-add" opportunities for investors looking to increase property value through improvements.

Class C properties are older buildings, typically over 20 years old, located in less desirable areas. They often need significant renovations and have the lower rental rates. These properties carry higher risk but can offer substantial returns if managed well.

Investors must understand the different levels of building quality to align their investment strategies with their risk tolerance and return objectives. There are plenty of investor whom only buy C+ class properties and make a killing on flipping or renting them. "C" class properties typically have a lower entry point, so they are easier to get into, and the rents are lower so many of these neighborhood are targetted by investors since most middle to lower middle class renters end up in this neighborhood.

Class A Properties:

• Location: Built in the most desirable parts of town with low crime rates.
• Age: Typically built within the last 10-15 years.
• Income Level of Residents: High-income earners.
• Property Condition: Well-maintained with few physical issues, often with high-end amenities.
• Rental Rates: Highest rental rates in the market.
• Management: Professionally managed.
• Appreciation: Positive outlook for future appreciation.

Class B Properties:

• Location: Located in good areas, but not as prime as Class A.
• Age: Generally 10-30 years old.
• Income Level of Residents: Middle to upper-middle income earners.
• Property Condition: Well-maintained but may have some deferred maintenance.
• Rental Rates: Moderate rental rates, lower than Class A.
• Management: May or may not be professionally managed.
• Appreciation: Fair appreciation potential.

Class C Properties:

• Location: Found in less desirable areas with higher crime rates.
• Age: Typically over 30 years old.
• Income Level of Residents: Lower to middle-income earners.
• Property Condition: Requires significant maintenance and repairs.
• Rental Rates: Lower rental rates in the market.
• Management: Often self-managed by owners.
• Appreciation: Limited appreciation potential, often needs significant investment to improve.

Class D Properties:

• Location: Located in areas with high crime rates and poor infrastructure.
• Age: Older properties, often poorly maintained.
• Income Level of Residents: Lowest income earners.
• Property Condition: Requires major repairs and renovations, often dilapidated.
• Rental Rates: Lowest rental rates in the market.
• Management: Frequently self-managed or managed by smaller, local companies.
• Appreciation: Little to no appreciation, high-risk investment .