How Property Location and Condition are Rated
Updated: Jun 8
We are breaking down general real estate lingo for rating property location and property condition. If you are new to Real Estate and need to brush up on some Real Estate lingo, keep reading.
Rating the location of a property
Class A: High income, great schools, very safe area
Class B: Still has some high income, good schools
Class C: Blue collar, a little lower income
Class D: Low income, generally unsafe area
Rating the condition of the property
A Class: New builds within 5 to 10 years, built with modern construction standards
B Class: Built from 1990- 2010, built within the last 20-25 years
C Class: Built 30+ years ago, in 1970s or 1980s
D Class: Built in the 1960s or earlier
How can you use this as a blueprint to make millions of dollars? Imagine you are investing in a hot market much like Austin, Tampa, Nashville, etc. Everyone is looking for the next big investment that will create millions of dollars in equity over the years. Identifying which class apartment in which class of neighborhood can give you the ability to force appreciate your property's value to millions and millions of dollars.
Let's imagine you buy a C-class run-down 1973 Garden-style apartment in Terry town (a luxurious town in Austin) and you add 25k per door to make the apartment a B+ to A class apartment. You’re now able to upcharge higher rent and increase the value of your property's overall performance.
Eventually, A-D will become average lingo like using the word “the” in a sentence. These metrics are industry standards to give a better idea of what you are purchasing when in communication with a deal.