You Can Fix a Property—Not a Neighborhood

Martin Beechen
2 days ago
3 min read

When you're investing in real estate, two things matter right away: the property itself and the neighborhood it’s in.

Each one gets rated from Class A (the best) to Class D (the worst).

And here’s the truth: the neighborhood matters more than the property. You can always fix a property. Paint it, renovate it, upgrade the kitchen—you're in full control of that.

But if the neighborhood is in bad shape? There’s nothing you can do to fix that. You can’t clean up crime. You can’t make schools better. You can’t keep bad neighbors out. You’re stuck with whatever the area brings.

That’s why smart investors look for the best neighborhood they can afford. Once you’ve locked that down, then focus on the property. Even if the building isn’t perfect, if it’s priced right, you can fix it up—and people will want to live there because it’s a great area.

Quick Summary:

Property class = the quality of the building
Neighborhood class = the quality of the area it’s in
Class A = new and clean
Class D = broken and risky
Neighborhood matters more than the property
Class C property in a Class A neighborhood = gold
Class A property in a Class D neighborhood = trap

Property Classes

Class A: Brand New and High-End

These are the nicest properties—new, modern, and loaded with amenities. They attract high-income tenants who expect everything to be perfect.

Easy to rent, low maintenance, but expensive to buy.

Class B: Nice, But Older

These are solid properties—often 10 to 20 years old—but still in good shape. They might need some updates, but nothing major.

Good for investors looking for stable returns with less upfront cost.

Class C: Worn but Worthwhile

These properties are usually 30+ years old. They may have outdated systems, old finishes, and some wear and tear.

Great if you’re willing to renovate or manage repairs—but only if the neighborhood is solid.

Class D: Don’t Be Fooled

These properties often look cheap on paper, but they come with major issues: bad condition, serious repairs needed, and hard-to-manage tenants.

Avoid unless it’s a truly incredible deal in an improving area—and even then, be careful.

Neighborhood Classes

Class A Neighborhoods: The Best of the Best

These areas are safe, clean, and full of life. Great schools, nice shops, low crime. Tenants want to live here—even if the property isn’t perfect.

If you find a Class C property in a Class A neighborhood, grab it. These deals are rare and can lead to massive upside.

Class B Neighborhoods: Reliable and Stable

Still good areas, just a step below Class A. Usually middle-class communities with steady demand.

Good for cash flow and long-term growth.

Class C Neighborhoods: A Mixed Bag

Older neighborhoods, often with more rentals, fewer services, and aging infrastructure. May include auto shops, pawn shops, or payday lenders.

Some can work, but you’ll need to watch closely for declining rents or rising crime.

Class D Neighborhoods: High Risk, Low Reward

These areas have serious problems—high crime, poor schools, and little investment. Even if you buy a great property here, it won’t matter. Tenants will be rough, rent will drop over time, and your property will get trashed.

99% of investors should avoid Class D neighborhoods unless you really, really know what you’re doing—or you’re willing to be a slumlord. Most people should stay far away.

Why This Matters

The best investments aren’t always the nicest buildings—they’re the ones in the best locations.

If you find a Class C property in a Class A neighborhood, that’s a rare and incredible opportunity. People move to great neighborhoods no matter what. You can fix up the building, raise the rent, and see long-term value growth.

Now flip it around: A Class A property in a Class D neighborhood sounds impressive on paper—but it’s a losing bet. You can’t fix the neighborhood, no matter how hard you try. If there’s high crime, sketchy activity, and people don’t feel safe being there, you won’t be able to change that.

All you can control is your property. You can call the police when things go wrong—but they rarely show up in time or solve the real problem. Meanwhile, your nice property gets trashed, tenants leave, and rent drops.