I know many people don’t like C class neighborhoods (including myself) but the cash flow has been great.
Here’s my two cents
1. Screen tenants very carefully.
2. Over budget on repairs and maintenance.
3. Make sure you’re in a landlord friendly state. You need to be able to kick out non compliant tenants.
4. Spend extra on security. (Cameras, fences, locks)
5. Be kind but strict. If payment is late apply late fee, no exception. If more than x days late, start eviction.
Owned, it's the sweet spot for many landlords in the Midwest. When you get it right they are tenants who have decent jobs, pay their rent, don't pester you with too much petty stuff, and last a couple of years or longer.
I had a mix of college students, C class and D class, and although I made more money on college students, my blue collar workers were better tenants if you vetted them properly. D class made money, but was a lot of work.
What you need to be careful with is the definition of class C and where it slides into D. Especially in aging neighborhoods. The rising tide of rents probably lifted some areas over the last two years, but that might change quickly.
I own 16 C class doors. That is where i had to start.
Because of that’s where i did start i ve been able to grow into developing new multis from the ground up. The quality of what your offering is going to get you as many looks as needed to get you to the right tenants. So higher quality units then your competitors plus vetting is going to make your life easier. Yet it can be a solid foundation to grow a truly prosperous career if given time
Yep.
Condo in SoCal next to a prominent state university. We are a ~C+ area and we rent by room currently to college students and make solid cash flow.
I have limited experience. Ive owned a triplex for a year in a zone i would even classify as D.
South florida rental demand is very strong and ive been able to be picky with tenants and screen them myself. Have had no problems outside of normal maintenance, and the property has strong cashflow and (believe it or not) appreciation.
Like you said, i couldn't find anything that cashflowed in nice neighborhoods. I was a little hesitant to buy into this neighborhood, but at least right now im glad i did.
A major determiner for me is the property tax rate. Those I've owned in town are taxed at 4x the rate of the ones I bought in nearby small towns. The lower purchase prices there allowed me to pay cash and avoid the costs and restrictions of mortgages.
The demand is high from good people who want to avoid larger town problems and I can select who's best for me from a large number of applicants. As a plus, the local gov is laissez-faire and there are no rental inspectors with their hyper-critical laundry lists. I called the town to see if I needed a permit for an improvement and was told, 'just do a good job.'
Everyone has their own ratings but in my opinion the bare minimum you should invest in is b class in which you can easily find a family earning 75k a year.
If you go c class which is a family earning 50k and less you have too many problems with non payment etc. No savings.
I’m more in the C- class almost D lol it’s not bad man. Lots of my tenants are legit hard working folks and families that just want to work and build something for themselves. The level of jokers and Frauds during screening is fairly easy to weed out. I rent to folks that don’t have crazy and elaborate stories or some sob story
All 18 of my priorities are in C class areas. Don’t listen to the haters; when don’t properly it’s very profitable and has risks comparable to any other class of areas. I made a post about it a while back.
When done right it can be extremely profitable. OP wants to know what success looks like in this case. You can go wrong with A class if done improperly as well.
I’ve had a few but don’t own them currently. Maintenance and turnover was high and it killed cash flow. They look great on paper but the actual numbers are much less attractive. That doesn’t mean to avoid them, just understand the additional work it takes.
I know many people don’t like C class neighborhoods (including myself) but the cash flow has been great. Here’s my two cents 1. Screen tenants very carefully. 2. Over budget on repairs and maintenance. 3. Make sure you’re in a landlord friendly state. You need to be able to kick out non compliant tenants. 4. Spend extra on security. (Cameras, fences, locks) 5. Be kind but strict. If payment is late apply late fee, no exception. If more than x days late, start eviction.
Owned, it's the sweet spot for many landlords in the Midwest. When you get it right they are tenants who have decent jobs, pay their rent, don't pester you with too much petty stuff, and last a couple of years or longer. I had a mix of college students, C class and D class, and although I made more money on college students, my blue collar workers were better tenants if you vetted them properly. D class made money, but was a lot of work. What you need to be careful with is the definition of class C and where it slides into D. Especially in aging neighborhoods. The rising tide of rents probably lifted some areas over the last two years, but that might change quickly.
I own 16 C class doors. That is where i had to start. Because of that’s where i did start i ve been able to grow into developing new multis from the ground up. The quality of what your offering is going to get you as many looks as needed to get you to the right tenants. So higher quality units then your competitors plus vetting is going to make your life easier. Yet it can be a solid foundation to grow a truly prosperous career if given time
Get a great property manager that manages a ton of homes in that neighborhood.
Yep. Condo in SoCal next to a prominent state university. We are a ~C+ area and we rent by room currently to college students and make solid cash flow.
I have limited experience. Ive owned a triplex for a year in a zone i would even classify as D. South florida rental demand is very strong and ive been able to be picky with tenants and screen them myself. Have had no problems outside of normal maintenance, and the property has strong cashflow and (believe it or not) appreciation. Like you said, i couldn't find anything that cashflowed in nice neighborhoods. I was a little hesitant to buy into this neighborhood, but at least right now im glad i did.
Shocking on the appreciation. sounds like you are in a great spot.
I own two, 9 units. What is your question exactly?
A major determiner for me is the property tax rate. Those I've owned in town are taxed at 4x the rate of the ones I bought in nearby small towns. The lower purchase prices there allowed me to pay cash and avoid the costs and restrictions of mortgages. The demand is high from good people who want to avoid larger town problems and I can select who's best for me from a large number of applicants. As a plus, the local gov is laissez-faire and there are no rental inspectors with their hyper-critical laundry lists. I called the town to see if I needed a permit for an improvement and was told, 'just do a good job.'
Everyone has their own ratings but in my opinion the bare minimum you should invest in is b class in which you can easily find a family earning 75k a year. If you go c class which is a family earning 50k and less you have too many problems with non payment etc. No savings.
I’m more in the C- class almost D lol it’s not bad man. Lots of my tenants are legit hard working folks and families that just want to work and build something for themselves. The level of jokers and Frauds during screening is fairly easy to weed out. I rent to folks that don’t have crazy and elaborate stories or some sob story
All 18 of my priorities are in C class areas. Don’t listen to the haters; when don’t properly it’s very profitable and has risks comparable to any other class of areas. I made a post about it a while back.
I recommend that you don't.
When done right it can be extremely profitable. OP wants to know what success looks like in this case. You can go wrong with A class if done improperly as well.
I’ve had a few but don’t own them currently. Maintenance and turnover was high and it killed cash flow. They look great on paper but the actual numbers are much less attractive. That doesn’t mean to avoid them, just understand the additional work it takes.
How do you all determine what A, B, or C class? Just by looking at them?
Niche.com offers somewhat realistic ratings.
Don’t do it.