I’ve seen in posts and in books advice to newbie investors to find cheap properties in low income areas, but to stay away from properties “in a war zoneâ€. But these posts and books never quantify what the difference is between a lower income area and “a war zoneâ€. As a newbie myself, I want to be able to recognize the difference. Can you help me understand in a quantifiable way what the differences (and similarities) are between the areas? Does it just boil down to crime rates?
Neighborhoods can drift, either upward or downward.
I've got a couple properties in a border neighborhood that the police and city are targeting both for crime and code enfractions. Many houses are boarded up because the landlords won't meet standards, and soon they will be torn down on the landlord's dime. Looks bad now but once the riffraff are gone it will be a nice family neighborhood again.
You can play a part, too. Screen your tenants well and enforce your lease. I tell my tenants to report any problems in the neighborhood to me and I will pass it on to the cops. My tips have shut down two crack-houses (not counting the tenant I kicked out for selling crack).
What significantly contributes to the problem are SLUM LORDS. I've got one in this neighborhood, a really friendly guy, too! But I've dropped a dime on him and will do it again if needed.
One key to remember is that strong landlords can turn a neighborhood around.
War zones are where crime rates are very high. Also where there is reported gang activity.
Watch your news, read your paper. LISTEN where the shooting, murders, and violent crimes are happening on a regular basis. Not sure there's a magic formula. For me, if I don't feel comfortable walking the streets at nite there, I don't market or buy there.
Bullet holes in the buildings are usually a good indicator (no joke). Getting propositioned by a prostitute or 3 while looking at a deal also is another indicator. Another one is when the only realtor who will show you the property onsite is a retired marine carrying a Glock. Nothing against that, I carry my Glock everywhere but when everyone who isn't accustomed to Fallujah is scared, it's a problem. I used to look at some real bad areas before I figured out how to find the same cheap property in areas I could actually stay the night in. The only way to know the cheap non-war zone areas is to put time into learning about your specific city you're going to invest in. No other way around it.
Neighborhoods can drift, either upward or downward.
I've got a couple properties in a border neighborhood that the police and city are targeting both for crime and code enfractions. Many houses are boarded up because the landlords won't meet standards, and soon they will be torn down on the landlord's dime. Looks bad now but once the riffraff are gone it will be a nice family neighborhood again.
You can play a part, too. Screen your tenants well and enforce your lease. I tell my tenants to report any problems in the neighborhood to me and I will pass it on to the cops. My tips have shut down two crack-houses (not counting the tenant I kicked out for selling crack).
What significantly contributes to the problem are SLUM LORDS. I've got one in this neighborhood, a really friendly guy, too! But I've dropped a dime on him and will do it again if needed.
One key to remember is that strong landlords can turn a neighborhood around.
Votes for both! Very Good! I concur on all points. Know your market, REALLY know your market.
Good post Mark! I personally feel too many people play victim to their surroundings. There are things you can do to make a difference. Like Mark mentioned get law enforcement involved, if law enforcement know that the tenants and landlords care about their neighborhood they will be more likely to do their jobs. Just my two cents.
BTW- I feel that the difference in a low income area and a "war zone" area is a matter of personal opinion. Statistics prove that low income areas have higher crime rates, so I believe you cannot have one without the other. IMHO.
The difference between a low income neighborhood and a war zone is GUNFIRE! If you can't walk through the area at night without risking being shot, then you're in a war zone. If people regularly get shot for the "colors" they're wearing, then you're in a war zone. If you feel unsafe unless you're wearing two extra magazines for your Glock, then you're in a warzone! Do you see drug deals occuring in broad daylight and hookers working the corners - warzone!
Routine street crime and drug dealing without frequent violence - it's a normal low-income neighborhood.
If you want to determine if an area is a war zone, TODAY IS THE DAY! Friday night and a welfare weekend - strap on your Glock and head on down to whatever neighborhood you're considering tonight. It won't take long to determine if it's a low income neighborhood or a warzone. Better take the extra magazines until you know which it is!
BTW, I just switched to a new carry gun - a Glock model 22 in .40 S & W. The thing is very light and carries SIXTEEN ROUNDS (with one in the pipe).
I had a felon arrested today for criminal trespass - details on tonight's blog.
Mike
I'm sorry, but my definition is much different. I rent in lower income neighborhoods in So. Tx, but I don't need a gun, I've NEVER seen a drug dealer on the corner, and I will drive there at night. These are not war zones nor prostitute corners.
If you want to fear for your safety and wear a gun, then buy in low income areas of big cities. No thank you for me. My low income areas are still driveable with my wife at night. If they don't meet that criteria, I'll pass. Rich
Rich - with all due respect you may be the only Texan I know who doesn't have a gun regardless of the neighborhood you're in. :shoot:
If defending yourself (packing heat) isn't your cup of tea, then I wouldn't get into low income rentals.
I was carrying a Beretta 9000S, which I still have, but that extra 5 rounds in the
Glock and the simplicity of the gun are very attractive for a carry gun. Conceals surprisingly well.
Mike
When you start seeing bullet holes in homes,broken glass in the streets,blood on the sidewalks and police tape all over the neighborhood than you are in a war zone.
I'm a beginning investor (only have 3 properties of my own) that's cutting my teeth assisting my cousins with their properties (around 100). And yes, this is my first post on here! Most of my cousins' properties are located in less-than-desirable areas. Furthermore, a good number of their tenants are less-than-desirable people.
What constitutes a war zone? Bullet holes in the buildings are a good start. Visiting the property and getting re-routed by the police because a bloody corpse is in the alley is another. Being approached to purchase / sell drugs (not counting pot in a college area) is a clear signal that you're not in the best of neighborhoods.
Speaking to investment, I can tell you that my cousins make excellent cash flow on these properties but have trouble selling them to trade up to other properties. Cash flow IS a good thing, but I'd rather sacrifice some cash flow for the ability to sell the places in order to step into other, better places.
How to handle problems? While I like the Beretta and Glock suggestions, I've learned that local law enforcement is best used by dropping dimes on the problems. Enforcing the lease is important. Keeping the property looking good (crap condition attracts crap people) helps. There's also getting the city involved by reporting problem places with code violations and the like.
FYI, I hold a Class III FFL/SOT. My open carry gun (concealed is illegal here in WI) is a Serbu Super-Shorty 12 gauge AOW. While it has a low capacity, I've yet to meet anybody who continues to cause issues after it's produced.
Mike
Mike,
wow, i can only imagine the super shorty leaves most folks speechless when it is flashed.
jeffrey
I normally don't tote it around. But I have zero qualms about bringing it with me in certain neighborhoods or if I feel that its presence will stop problems before they start.
Mike
Upon reflection, I just realized that I LIVE in a 'bad' neighborhood.
Here are the stats: frequent drug dealing and even more frequent drug use; occasional home invasions; frequent burglaries; frequent night muggings; frequent drive-by armed robberies; vehicle thefts; frequent property damage; monthly shootings; rapes and attempted rapes; assaults; and so on.
Where do I live? IN A COLLEGE NEIGHBORHOOD!!!
Apart from the drug use (which is expected from college kids) the college neighborhood is RICH PICKINGS for roving thugs from other neighborhoods.
Although the local college hates to publicize this stuff, patrols have been beefed up, dorm security has super increased, and many more alarm boxes have been placed on campus.
The college even advises that at night students walk around IN GROUPS! Which doesn't work because the thugs know there are more wallets to steal!
And I now offer the option of SECURITY SYSTEMS to my college renters.
Some of my low-income rentals are better than this!!!
I carried my duty and off duty weapons first 9mm and then 40 cal. for too many years. It was more of a burden then anything else. I perfer my 380 cal Walther PPK. It's small enough I can put it in my pocket and I don't have to deal with a holster and I can promise you that I can drop someone just as fast, from pretty much the same distance.
You guntoters scare me to death!! My last MAJOR areas where I've bought have been St. George , Utah, Casa Grande AZ, and Rio Grande Valley, TX. I never felt the need for a gun. Of course, I'm a charmer, so that goes a long way I guess. Rich in Fl with new avatar and NO gun.
Rich, I used to live in Gold Canyon, AZ. While Casa Grande is a nice place, it can get interesting after dark.
That said, most of my Arizona gun pulls involved rattler removal!
Mike