The Benefits of Investing in B and C Class Properties

November 19th, 2019

B and C class properties are some of the best turnkey rental property investments you can make. Don’t let the sparkle of A class properties distract you from the undeniable profitability of B and C class turnkey rentals. Granite countertops and vaulted ceilings don’t equate to money in your bank account every month. You aren’t living in your turnkey rentals. They’re meant to be money making machines. If you want real cash from real estate, you need to understand the following benefits of investing in B and C class properties.

 

More Likely to Cash Flow

 

B and C class turnkey rental properties are more affordable than A class properties. This cost benefit has less to do with your personal ability to afford a more expensive property than it has to do with cash flow. If you can afford an A class property, that’s great. But if you’re comparing a cash flowing B class property with an A class property that doesn’t cash flow, the winner is the B class property. The less you pay for a property, the less your monthly expenses will be, and the more it can cash flow for you. In today’s economy, you’re far more likely to find cash flowing properties that are B or C class than A class.

 

Tenants More Likely to be Able to Afford The Rent

 

B and C class properties are more likely to have tenants that are blue collar workers. That’s a generality; not always the case. But in general, if you have affordable rents that match up with B and C class turnkey rental properties, then you’ll have solid tenants that are working at places like an Amazon warehouse, a distribution center, a retail store or a coffee shop. Now, it doesn’t really matter where your tenants work as long as they’re able to pay the rent, right? With B and C class properties, tenants are more likely to be able to pay rent because it’s more affordable. In fact, if your tenant gets fired from their warehouse job, they can still pay the rent with two incomes from a coffee shop job. When rents are affordable—as they are with B and C class properties—tenants can pay rent even if they have to take a lower paying job for a while. Also, it doesn’t take long to get a blue collar job. Your tenant could get laid off on Monday, apply on Tuesday and have a paying job that starts on Wednesday.

 

On the contrary, A class tenants need high paying jobs in order to afford premium rents. Most often, it’s a white collar job that pays very well. That’s great until the breadwinner gets laid off. White collar jobs aren’t easy to get. Your tenant could be out of work for months while they wait to be picked up again by another corporation. A job at Starbucks won’t pay the rent in your A class property. In the meantime, you go without monthly rent payments. You may even end up needing to start eviction proceedings.

 

More Room For Appreciation

 

A class properties are already the top of the line. There’s very little room for improvement. The property is at its best considering the neighborhood and comparable properties. You’ll need to wait many years to see any appreciation because you’re buying in at the top of the market. With B and C class properties, there’s a lot of room for appreciation. Cities in cash flowing markets like Memphis and Cleveland are seeing high levels of investments from developers and corporations that see the intrinsic value of these important cities in our nation. When you invest in areas like Memphis and Cleveland, your B or C class turnkey rental property may appreciate at a rate that far exceeds the appreciation rate of A class properties in cities like California or Texas. Especially if you are finding up and coming B and C class neighborhoods. These neighborhoods tend to have very high appreciation as well as great cash flow.  If you’re having trouble finding these up and coming neighborhoods, don’t worry, we’ve got you covered. We have many neighborhoods that we invest in which we think are going to be great little areas in the next 3-5 years. Just ask us!

 

More Demand in a Bad Economy

 

When the economy takes a downturn—as it always does at some point—people always turn to lower rent properties. They don’t go looking for premium rents just so they can brag about living in an A class property. People will cut corners however they can; including moving out of an expensive rental and into an affordable rental in a B or C class neighborhood. Demand is high when the economy tanks, and you’ll always be able to rely on cash flow to get you and your family through the tough times.

 

Always a Need

 

There’s always a need for affordable housing options. Even when the economy is doing great and everyone seems to be raking in money, there are some people who need lower rents. That’s where your B and C properties come in. Your B and C rentals will always be an affordable option for those who aren’t able to make a lot of money, who are on fixed incomes, or who just need safe, affordable housing. As a B or C class turnkey rental property owner, you’re fulfilling a critical need in society. And that’s a good feeling.

 

There are many investors who don’t understand that B and C class properties are actually the epitome of a good investment. They combine the affordability of lower rents with the stability of consistent need and the increased opportunity for long-term appreciation. What more could you ask of a real estate investment? To see turnkey rentals that are available in fast growing, cash flowing markets right now, please view our inventory of turnkey rentals for sale.

 

 

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