If you are looking to buy out of state for buy and hold properties, how do you decide if a neighborhood is 'good' or 'bad'? I've tried looking at areas via Google street view, but I know that's probably not super accurate. Thanks!
I don't invest out of state, but what I always say--is the market talks! Trulia has a great crime map!
IMO you can quickly tell the good/bad areas based on price, and availability of rental units. If the rentals are the cheapest in the area, it's because it's the worst area and likely has problems. If there are a ton of rentals available, in that cheap area.. it's because no one wants to live there! I'd absolutely analyze the area, determine where on average the most expensive apts/homes are, where the cheapest are, and then connect the dots with crime. If it's a lot of expensive ones, there might be a higher supply and higher price, and it doesn't fit the demand, but it wouldn't be bad-- as the higher price! I see a lot of this where we invest, some rich investors bought a large warehouse, did granite, hardwood floors, made them way too nice-- and priced around $900-$1200/ 1bd.. and they sit...the area/market doesn't support it-- it's a depressed area, whereas our 2bd/1 bth homes around $700 go like hot cakes! Look at house prices-- what's on the market, but also what's recently sold? I'd determine what's the average price, and why?
Another one of our rules, is that we don't rent in proximity to section 8 complexes/low income only. A street can be cleaned up, but a complex will stay, and if it's government run, it's not likely going to get better! If you're looking at a house, make sure to find the local complexes, and determine if it's a good fit. Granted, we only do local and do a lot of work ourselves, so this might not matter as much to you.
I have a brilliant sister, who I kid you not... rented a house in the ghetto in a new area, and never once questioned "why is it the cheapest?!" ... it was the cheapest because it was 1 block from their 3 ghettos. The price will correspond to the demand, and if it's the cheapest, it's because it has to be to compensate as an incentive to get people there. It's a puzzle you just need to solve :)
Bloomington, IL · Member since 2017 · 16 posts · 7 votes
9y
Pay a real estate agent in that area to drive around for an hour and take notes. They have showings and networking, so that takes them all over the place anyway. Win for you, win for them.
Minneapolis, MN · Member since 2017 · 26 posts · 15 votes
9y
Hi Care,
I recently found on Realtor.com (or the app), that there are a few useful filters you can add. You can show crime rates, see if there are schools nearby, grocery stores, etc. and it overlays the map of homes for sale in those areas. Pretty cool! So yeah, I would recommend trying that -- finding one with lower crime, one with nearby shopping areas... and then maybe search nearby businesses on Google. The more closeby, the merrier! Hope that helps.
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
9y
@Care Anne S. I've never been able to come up with a reliable way. Sure there are crime heatmaps, sure there are Google Street View to look for cars on cinder blocks and boarded up homes, sure I can get an opinion from a realtor, but it's all imperfect. Or maybe I just trust my gut too much. Usually in under 15 minutes of driving around (after flying out) I can figure out my comfort level with the area. And, more often than not, I end up disappointed. The nice part about taking trips out there is that I can make my little "GOOD Heatmaps" with a highlighter. So I can subsequently narrow my areas of focus.
If you do narrow down your focus to a particular city/town you can call around to vet property managers. Any decent property manager will tell you if they are comfortable going to 456 Main Street at 10:00 p.m. to pick up rent in cash. If they aren't, you have your answer. If you haven't committed to a certain area you're probably wasting your time by calling PMs.
And, what I do, which is REALLY inefficient is to stream local radio and follow the newscasters in the area on Twitter. It might take a month or two but I'm guessing you'll start to hear similar areas, streets, etc. when it comes to crime. I'm sure there are way more efficient ways to accomplish this but it's something that I like to do.
Good or bad is relative of course. Some ideas would be to look up local crime rates, ranking of the local schools. If you post the name of the neighborhood on BP I'm sure you'll be able to get some feedback from local people that know the area.
Citydata is another site that can be helpful. You can find the forum for the state/city the neighborhood is located in and ask on there from local people.
Try doing a google news search of the neighborhood and see what comes up.
Put the address into yelp and search for what types of businesses are nearby.
Keep in mind the upper end areas or A class areas usually don't cash flow that well, especially in the current market.
Hope this helps.
Also just wondering since I don't often hear people talk about Michigan being too high and I did a quick search on Adrian,MI and prices seem pretty reasonable.
Is there a specific reason why you want to invest out of state rather than locally?
Lender · College Park, GA · Member since 2017 · 10 posts · 5 votes
9y
Hi, Care Anne
I use data mining resources for real estate. This will give you an idea by zip code how a neighborhood measures up. This tool will enable you to make an informed decision if a property is a good match for you.
I use data mining resources for real estate. This will give you an idea by zip code how a neighborhood measures up. This tool will enable you to make an informed decision if a property is a good match for you.
Which data mining resources? Are they ones available to individual investors or more corporate/institutional ones?
This one is a good source. You can also google the zip code and real estate index. I use data mining with my personal investments and for my clients. It gives me insight as to which properties I can safely buy and hold.
In Michigan, Realtors are not allowed to comment on area's roughness when buyers ask, is that not the case in other states?
@Joseph M. - Adrian is a great place to invest, rental rates vs. home ownership is over 50%, and there are always people looking for rentals. However, we are looking to get out of state due to the weather, so hoping to buy some properties now, and then move into one of them in a year or so when we're ready to get out of here.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
9y
@Care Anne S. I would highly recommend taking in person visits to markets you are seriously considering. We deal with a lot of out of state investors here in CT that come from other markets and i always recommend they come and see things for themselves.
Real Estate Broker · Granby, CT · Member since 2015 · 695 posts · 317 votes
9y
@Care Anne S.,Realtors and Brokers learn about the term "steering" in the Fair Housing sections of our principles and practices guides when in class. Wikipedias definition is this:
Racial steering refers to the practice in which real estate brokers guide prospective home buyers towards or away from certain neighborhoods based on their race. There are certainly other "projected classes" other than simply race that also encompass steering, and most good agents do not entertain even a hint of telling a client about how we "feel" about an area. There are testers out there to keep us in line as well, and our licenses are in jeopardy if we answer incorrectly.
Daily, I need to tell my investor clients that they should do a drive by, use their favorite school/crime rate website, and research the areas themselves. Actually "walking the neighborhood" certainly adds another layer of comfort as well, but the drive by should come first. If you don't feel comfortable getting out of your car, then you might have your answer about how you (personally) "feel" about the area. Because in the end, we all have differing levels of comfort.
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
9y
It's not a bad idea to look at the roof of the homes in the area. If you find there are tons of missing shingles, tarps on houses and a bunch of folded up corners (Google Street maps can show some of that) then you know that there is not money being pushed into that neighborhood. If you see that they are pretty much all newer that tells you people are investing in that area (maintaining the values). You can also use some of that to help you with comps, if yours needs a roof and you know you can get it done in the area for 8K, that helps you to put a value on the one you are looking at.
I don't invest out of state, but what I always say--is the market talks! Trulia has a great crime map!
IMO you can quickly tell the good/bad areas based on price, and availability of rental units. If the rentals are the cheapest in the area, it's because it's the worst area and likely has problems. If there are a ton of rentals available, in that cheap area.. it's because no one wants to live there! I'd absolutely analyze the area, determine where on average the most expensive apts/homes are, where the cheapest are, and then connect the dots with crime. If it's a lot of expensive ones, there might be a higher supply and higher price, and it doesn't fit the demand, but it wouldn't be bad-- as the higher price! I see a lot of this where we invest, some rich investors bought a large warehouse, did granite, hardwood floors, made them way too nice-- and priced around $900-$1200/ 1bd.. and they sit...the area/market doesn't support it-- it's a depressed area, whereas our 2bd/1 bth homes around $700 go like hot cakes! Look at house prices-- what's on the market, but also what's recently sold? I'd determine what's the average price, and why?
Another one of our rules, is that we don't rent in proximity to section 8 complexes/low income only. A street can be cleaned up, but a complex will stay, and if it's government run, it's not likely going to get better! If you're looking at a house, make sure to find the local complexes, and determine if it's a good fit. Granted, we only do local and do a lot of work ourselves, so this might not matter as much to you.
I have a brilliant sister, who I kid you not... rented a house in the ghetto in a new area, and never once questioned "why is it the cheapest?!" ... it was the cheapest because it was 1 block from their 3 ghettos. The price will correspond to the demand, and if it's the cheapest, it's because it has to be to compensate as an incentive to get people there. It's a puzzle you just need to solve :)
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
9y
@Care Anne S. street view can be very outdated. It also doesn't represent topography. It is a good starting point to look for obvious issues.
I would recommend crime logs and registered sex offender logs. The sex offender logs are especially helpful, because high concentrations mean landlords who have no standards, which means run down properties.
School rating scores are also helpful. If the local elementary school has high rating, you can assume involved and caring parents. Good schools attract people who care.
The property value itself can also be a great indicator. A neighborhood of $20K houses is going to be worse than a neighborhood of $200K houses.
Ultimately, you need to travel to any area you plan to invest in. Drive the streets and talk to local people.
This one is a good source. You can also google the zip code and real estate index. I use data mining with my personal investments and for my clients. It gives me insight as to which properties I can safely buy and hold.
I’m familiar with tableau as a tool but where are you getting the data from. Thx! - Leslie
Property Manager · Windsor Locks, CT · Member since 2016 · 1k+ posts · 1k+ votes
9y
What I have done with my out of state clients is drive through the neighborhood and surrounding blocks with a go pro or a dash camera. This gives my client the same "view" that I would get while driving the area.
Because most of my clients come to me for property management first, and acquisition second, they will typically ask me if I would manage in that area - if not, we just move on. As Rick mentioned, in CT we are not allowed to speak to the safeness of the neighborhood due to potentially "steering" folks.
Real Estate Agent/Property Management · Houston, TX · Member since 2014 · 1k+ posts · 827 votes
9y
I don't know why people insist on doing this the hard way. The best thing for you to do if you're investing out of state is to create a relationship with a local Realtor. He/she will be knowledgeable about the area and guide you on the best rental properties. And then let him put in the contract. That's a win/win, not offering $50 to have them drive by.
There are plenty of local Realtors on BP who will be glad to help you in your target area.
Lehigh Valley, PA · Member since 2016 · 144 posts · 91 votes
9y
You need to be a really seasoned investor and hopefully with strong relationships in the area you're looking to purchase without visiting and knowing the area. My first question is: would I live there? Then value to me is based on that answer.
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
9y
Keep in mind bad areas may look different in a new region. In the NJ area I was in I could really recognize the projects. At that time they were high rise, no trees, heavy security doors. I moved to phoenix they were garden style, trees and looked quieter because they were less densely occuppied. In MA/RI they have another look.
Some things carry across areas. Do the cars look as if they are maintained. Are there bars on the doors ? who is hanging out when?
Real Estate Agent · Grand Rapids, MI · Member since 2014 · 493 posts · 200 votes
8y
Crimereports.com is a fairly good way of determining if an area has issues. The map generated for the Grand Rapids, Michigan area is pretty spot on, i.e. avoid the areas where there is a heavy cluster of crime icons. However, if you're asking, is it a good or bad area to invest, that is a completely different question. There are many fringe areas near these neighborhoods in GR that are on the cusp of redevelopment and have huge potential for increased value, etc. Get with a local real estate broker that also invests. I can refer you to someone that is excellent if you touch base with me via email.