I invest mostly in Class B Housing.
Because its vacancy rates are super low. If you compare Class B to Class A, they’re about half. That means that I don’t have the most expensive expense in real estate, which is vacancy.
Why is vacancy so expensive? Well obviously, you’re not receiving rent, but you’re still paying a mortgage. On top of that, a lot of times when someone moves out, there are turn costs.
You have a security deposit, but so many times, it doesn’t cover the total cost to turn a unit. And then if you’re not managing the property yourself, you have to hire someone to go out there and lease the property for you.
I also don’t invest that much in Class C. Why? Because I’m just not that good at it.
It takes a lot of management. And it takes a lot of working with your property manager to make sure that you have success.
I know that my time is valuable, and my time is not scalable. So I need to invest in something that is low-risk and scalable, which is why I invest mostly in Class B apartments.