If you’ve been investing in real estate for any period of time, or even if you’re just in the research phase, you likely know about property classes.
Just in case you’re brand new to REI and have no clue what I’m talking about, there’s an informal grading system that investors use to classify properties.
Yes, I mean literal grades such as an “A” property or “C” property.
I say it’s informal because everyone has their own variation and subjective opinions about what each grade constitutes.
One investor may think a property is a “B” class while another considers it a “C”.
Some grade on an A-B-C scale while others go all the way down to an “F”.
Some go even more in depth by adding pluses and minuses into the mix.
But with all that aside, at its core, the grading system is universally known and is an important factor to consider because each class represents a different level of risk and return.
As a company who manages mostly A/B properties, we are often asked what those types of properties look like.
So, we thought we would take some time to break down each class, provide some real life examples from right here in Indianapolis, and hopefully be able to help you determine which class of property best fits your investment goals.
For the purposes of this blog, we’re going to use an “A” through “D” scale.