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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
I have invested in hundreds of C and D class properties in my 20+ year career and hundreds of A and B class properties. I've seen firsthand how differently appliances get handled depending on the neighborhood, the tenant base, and the expectations that come with each property class. It's one of those things that doesn't get talked about enough, especially when newer investors are modeling out their numbers before buying in tougher parts of the city.
Appliances are an obstacle that a lot of investors don't plan for. They model rent, taxes, insurance, maybe a general maintenance line item, and call it a day. But appliances break. They need to be repaired. They need to be replaced. And depending on where you invest, the dynamics around all of that change in ways that can surprise you.
One of the biggest differences I've learned over the years is that in C and D class neighborhoods, you can often have the tenant provide their own washer and dryer. In A and B class areas, that's expected to be provided by the landlord. In some parts of C and D class, many landlords won't even provide major appliances at all. They'll offer a rent concession or some other incentive for tenants to bring their own. That can save you money on the front end, but it introduces a whole different set of problems. Tenants buying used appliances that already have roaches living in them. Damage to hallways, stairwells, and common areas from moving heavy appliances in and out. Issues with electrical or gas hookups when a tenant installs something themselves. It's not as clean as it sounds on paper.
All of that had me thinking for a while: are appliances actually more expensive to maintain in C and D class neighborhoods, or does it just feel that way? So I looked at the last two years of appliance work order data across our portfolio at GC Realty & Development to see if there was a real, measurable difference or if it was just theory.
Here's what I found.
First, Let's Define Property Class
Wall Street has a fairly standard way of classifying real estate, but in our world of scattered site property management across Chicagoland, the lines are even blurrier than they are in the institutional multifamily sector. A building's class isn't just about the building itself. It's about the neighborhood, the tenant profile, the age of the housing stock, the rent levels, and a dozen other factors that all blend together.
For the purposes of this article, we grouped properties into two buckets: A/B and C/D. We did this for two reasons. First, it makes the data easier to digest for readers. Second, the distinction between an A and a B or a C and a D can be subjective. One person's B+ is another person's A. By grouping into just two categories, we're drawing a cleaner line that most investors would agree on: nicer areas with higher rents and newer housing stock versus tougher neighborhoods with lower rents and older housing stock.
In our current portfolio of 1,400+ managed properties, the properties that generated appliance work orders over the last two years broke down as follows: 567 A/B properties and 223 C/D properties. The A/B properties generated 1,144 work orders (74% of the total) and the C/D properties generated 408 work orders (26%).
The Surprise: Per Property Costs Are Almost Identical
This one caught me off guard. After 20+ years of feeling like appliances cost more in C and D class neighborhoods, the per property numbers tell a different story.
$361 per property per year for A/B. $364 per property per year for C/D. That's essentially a wash. But don't stop reading here, because the way that money gets spent is completely different, and that's where the real lesson lives.
C/D Properties Replace More, Repair Less
This is the biggest difference in the data. C/D properties have a 29% replacement rate versus 23% for A/B properties. That means for every 10 appliance work orders in a C/D property, nearly 3 are full replacements. In A/B properties, it's closer to 2 out of 10.
The average repair cost is similar ($278 vs $282), but the average replacement in C/D properties costs $685 compared to $628 in A/B properties. That 29% replacement rate combined with higher replacement costs is what drives the per work order average up to $398 in C/D compared to $358 in A/B. It's 11% more expensive per call in C/D, but because A/B properties generate more calls per property (more appliances provided, including washers, dryers, and dishwashers), the annual per property cost evens out.
The Appliance Mix Is Different
This is something that shows up clearly in the data and ties directly back to what I mentioned about tenant provided appliances.
Work Orders by Appliance and Property Class
Two things jump out immediately.
Dishwashers barely exist in C/D. Only 22 dishwasher work orders in C/D compared to 242 in A/B. A huge number of C/D class units simply don't have dishwashers. It's not part of the expected amenity package in those neighborhoods. That alone removes a significant line item from the C/D appliance budget.
Washer and dryer work orders are proportionally lower in C/D. Washer and dryer related work orders made up 24.7% of all A/B appliance work orders but only 19.6% in C/D. That's the tenant provided washer and dryer dynamic showing up in real numbers. When tenants bring their own, those maintenance calls don't hit your ledger.
When C/D Appliances Do Break, They Cost More
Even though C/D properties generate fewer work orders per property, the ones that do come in tend to be more expensive. Every single appliance category costs more per work order in C/D than in A/B, with washers running 25% higher and microwaves 34% higher.
The C/D replacement rate being 6 percentage points higher than A/B (29% vs 23%) tells part of the story. Appliances in tougher neighborhoods tend to be older, get used harder, and are more likely to be past the point of economical repair when something goes wrong. The housing stock is generally older, which means the appliances that came with the property were often installed a long time ago.
There's also the repair rate gap. In A/B properties, 77% of work orders are repairs. In C/D, it drops to 71%. That means vendors are looking at these appliances and more frequently making the call that repair isn't worth it. When your appliance stock is older and has been through more tenants, you cross the replacement threshold more often.
The Repeat Repair Trap Hits C/D Harder
We talked about the repeat repair trap in a previous article, where the same appliance gets repaired multiple times before eventually getting replaced anyway. That pattern is more pronounced in C/D properties.
The average repeat repair situation in C/D cost $828 compared to $746 in A/B. And 32% of C/D repeat repairs eventually ended in replacement anyway, compared to 22% in A/B. If you're managing C/D properties and you're on your second repair call for the same appliance, the data says you should be leaning heavily toward replacement. The odds of getting stuck paying for both the repairs and the replacement are meaningfully higher.
What This Means for Your Investment Model
If you're running numbers on a potential acquisition, here's how to think about appliances by property class.
For A/B properties: Budget around $360 per unit per year for appliances. You'll see more work orders because you're providing more appliances (including washers, dryers, and dishwashers), but the per call cost is lower and 77% will be repairs under $300. Your appliance costs will be steady and predictable.
For C/D properties: Budget the same $360 per unit per year, but expect the cash flow pattern to be lumpier. Fewer calls, but when they come they're more likely to be replacements. Be especially careful about the repeat repair trap. If a vendor has already been out once, think hard before sending them again on the same unit.
If you're considering having tenants provide appliances in C/D: Yes, it saves you money on appliance maintenance. The data shows that clearly with fewer washer, dryer, and dishwasher work orders in C/D properties. But factor in the hidden costs. Roach infestations from used appliances can cost you hundreds in pest control across multiple units. Damage from moving appliances in and out hits your common areas. And if a tenant moves out and takes their appliances, your next tenant may not want a unit with no fridge or stove.
Final Thought
The data surprised me. After two decades of investing in both A/B and C/D class properties across Chicagoland, I expected to see a clear gap in per property appliance costs. The gap isn't in the total. It's in the composition. A/B properties give you more calls at a lower cost per call. C/D properties give you fewer calls but more replacements at a higher cost per call. Both end up in roughly the same place annually.
The real takeaway is that you can't manage appliances the same way across different property classes. Your decision framework for repair versus replace needs to be more aggressive in C/D. Your preventive maintenance matters more because the cost of waiting is higher. And your vendor relationships matter just as much in a C/D neighborhood as they do in an A/B neighborhood, maybe more, because the margin for error on each call is smaller.
Don't Go at This Alone
Look, I get it. A lot of investors try to manage maintenance issues themselves. They're Googling model numbers at 10 PM, calling around for quotes, and trying to figure out if it's worth fixing a 9 year old dishwasher. I've been doing this for 23 years and I still rely on the vendor relationships and systems we've built at GC Realty to make these calls efficiently.
This is exactly the kind of thing a good property manager handles for you. We know which appliances to repair and which ones to replace. We have the vendor relationships to get competitive pricing. We track every single work order so we can show you exactly where your money is going, just like we did in this article.
If you're self managing and this data made you realize you don't have a handle on your appliance costs, or if your current property manager can't produce numbers like these, that's worth a conversation. Reach out to us at GC Realty & Development and let's talk about what your portfolio actually looks like under the hood.
Whether you are a first time investor or a seasoned pro, having the right team behind you makes all the difference. If you want a data backed rent analysis for your Chicago area investment property, reach out to us at gcrealty.com or give us a call. We’ll show you what the market says your property is worth and help you lease it fast.
Reach out today!
Partner / Co-Host of Straight Up Chicago Investor Podcast
Mark Ainley is the owner and managing partner of GC Realty & Development, LLC, Chicago's Responsive Property Manager®, managing 1,400+ units across the Chicagoland area. He is also the co-host of the Straight Up Chicago Investor podcast.
