Written by Mike Nowicki
The A class is a special type of renter. These are usually rich people who do not need to be renting. They have no problem affording a mortgage, however they see the advantages of renting instead of owning their primary residence. The types of properties that are required for the A class tenant will be top notch. These tenants expect the best and definitely won’t settle for average buildings. You’ll either need to own something brand new/custom or old, but beautifully renovated. These tenants respect your property and tend to be low maintenance if you have the right processes/amenities in place.
Ahh.. the B class. These are the best tenants. My favourite part about these tenants is that the respect your property, they pay well and they’re relatively low maintenance. These tenants are considered the middle class, they could realistically afford their own house but choose not to for different reasons. I love these types of properties too because they cash flow well, they have nice appreciation and they pay down your mortgage.
This is where things start getting a bit more complicated. These are people who can’t get a mortgage due to lower income and bad credit. The good thing is that these kinds of properties generate great cash flow. Another thing is that these properties will most often appreciate pretty well. Sometimes these tenants will trash your properties but the cashflow will make up for the damages.
These are the worst of the worst and unless you like this sort of thing it’s suggested that you stay away from these type of tenants. They literally don’t have bank accounts. The areas are basically war-zones (ghetto) and they will more than likely trash your property, miss rent and cause many headaches. These areas are like a black hole for your money and almost never appreciate or get better.