B-Grade Neighborhoods 🌳

These are the properties that will lease with a market rate between $1,000 and $1,299. As a general rule, think of these as within the far limits of townships, with solid school systems, and have a long-term tenant pool. Additionally, these are usually neighborhoods built 1980s and after.

💡 Ratings are fluid. In other words, a lot of the locations on the northside were once D or C neighborhoods but have, through gentrification or other factors, become top classifications. Look for desirability and growth over what the current rental rates demonstrate.

C-Grade Neighborhoods 🌱

View these areas as a growth investment. Although these areas have a monthly rent rate between $750 - $1,000, they are typically found in a currently undesirable part of a desirable school district. This situation can equate to diamonds-in-the-rough and a great opportunity for arbitrage for buy & hold investors, because the tenant pool is higher than that of Grade B. However, unlike Grade D neighborhoods that favor low-income renters, these areas are ripe for gentrification in the urban core with favorable ARVs.

We link think of C-Grade neighborhoods as a budding Grade B location. 🌱

D-Grade Neighborhoods 🌰

We aren't saying not to put your Real Estate money into these neighborhoods, but then again even jumping out of a plane with a chute has risks...

Proceed with caution. These areas have the highest density of renters to owners. Which you may tell yourself isn't a bad thing, but that usually means it's a lower-income area with lower-quality renters. Typically if average rents are less than $800/m it is sitting in a D-Grade Neighborhood.

💡 Like we mentioned in the footnote of Grade B, neighborhoods can change rapidly over the course of a few years and evolve into higher grade investment pools. We have the developing urban core to thank for that!