Why is quantifying the quality and effective age of a rental house so important?  These factors will significantly impact cash flow.  Higher quality properties will generate more income in that the owner will have less income lost due to vacancy (higher demand from tenants to live in that area) and reduced losses from delinquency (higher quality tenants are more likely to pay as agreed). Higher quality rental houses also cost less to maintain.  We have observed for many years that C quality properties cost more per year to maintain than do B quality properties which cost more to maintain than A quality properties.  We run averages each January to look at the maintenance expenses for the previous calendar year so we can more accurately budget how much to expect for maintenance and repair expenses during the coming year.  We break down these averages by rental rate and property age to better understand the costs for A, B, and C quality properties. Some investors purchased a lot of C quality properties during the recent recession and budgeted losses for vacancy and delinquency based on some industry averages (for all rental houses), then were disappointed when the portfolio was not performing as projected.  Their actual losses due to vacancy and delinquency were much higher than budgeted.  Correspondingly, the maintenance and repair costs were also higher than they had budgeted. I don’t believe there is a perfect way to budget for 1 single family property for 1 year.  With an apartment complex, averages will work across the multiple units.  Correspondingly, our averages work across a portfolio of houses over an extended period of time.  As a “buy and hold” investor, that works for me.  I can estimate my Internal Rate of Return on houses I buy with much higher rate of accuracy using these averages based on the correct quality classification for the house. I have found my “sweet spot” is with B- and B properties.  That seems to be where I find the best compromise between yield and risk.  Your “sweet spot” may be different depending on your tolerance for risk and your expectation for yield.  If you are interested in buying rental houses in Atlanta, and aren’t sure what kind of property would be best for you, let’s talk. Excalibur Homes – The Experts in Leasing, Management, & Sales.  We are one of the few companies in Georgia that have been designated a Certified Residential Management Company® by the National Association of Property Managers®. Purchase your next rental home through one of our trusted Realtors® and your first leasing fee is FREE. Click here to view our leasing & management services. Or visit our Google+ page to check out our reviews and see what our clients have to say about us.