How do YOU grade/rate a neighborhood?

35 Replies

One thing I’m struggling with is finding the right neighborhood to invest in. Or when I find a property, confirming if the neighborhood is decent enough.

Any tips?

Thank you!

If you are going outside of areas that you are not familiar with, then you either have to use statistics or boots on the ground that are familiar with the area. You can use crime, demographics, housing age, proximity to employment/shopping/attractions, etc. If you are familiar with the area, it gets pretty easy as you drive around. Start with the premier neighborhood and see what it looks/feels like. Then compare other neighborhoods to that. Look at rents in the neighborhoods you think are premier vs. others. ETC.

One thing I do when I drive an area (though I know my own area in my sleep): I drive around at 1 or 2 PM on a mid-day weekday, like a Tuesday or Wednesday. If I see a lot of able-bodied people (mostly men) hanging around the houses on porches, corners, etc. at that time, I'm unlikely to consider it much further. 

Hi @Eric Kulling , I am relatively new so take the information as you will however, I am working through a similar process and wanted to share my thoughts. 

1) The first thing I did was hop on the MLS and start crunching numbers on properties all over the place. After a 100 or so I was able to create themes pretty quickly for the neighborhoods that worked for my numbers based on taxes, rent potential, and ultimately cash flow.

2) I then created a list of neighborhoods, got in my car, and began driving around to see what they actually looked like boots on ground. How nice were cars parked on the streets, are there contractors/workers in the area developing properties, sold signs on houses, etc.Idea being that I want to buy in neighborhoods people are actively moving into, fixing up, and are attractive to potential tenants who like to own/take care of nice things (cars). 

Definitely open to the thoughts of others on this strategy. 

A (best), B (just under the best), B-/C+, C, C- (not good, but not scared for your life), D (scared for your life)

@Eric Kulling  If you're considering out of state I'd strongly recommend Columbus, OH here. Great appreciating market, midwest prices, and lots of strong attractions driving people to move here. I have the entire city mapped out as A -> C- if you'd like to see.

Originally posted by @Marc Rice :

@Eric Kulling  If you're considering out of state I'd strongly recommend Columbus, OH here. Great appreciating market, midwest prices, and lots of strong attractions driving people to move here. I have the entire city mapped out as A -> C- if you'd like to see.

You don't think Columbus has even 1 D area?

 

@Nathan W.

Originally I did, but after really thinking through what a D class neighborhood means I don’t think Columbus has any. Even in the worst neighborhoods I would feel uncomfortable walking though but wouldn’t feel threatened for my life due to gang violence or insane amount of crime. I’m sure some worse cities like Detroit or Compton could have those D class neighborhoods where you’d be concerned for your life to walk through but I have not found that in Columbus. That’s why I grade it a C- class neighborhood and not a D.

Good question though!

Originally posted by @Nathan W. :
Originally posted by @Marc Rice:

@Eric Kulling  If you're considering out of state I'd strongly recommend Columbus, OH here. Great appreciating market, midwest prices, and lots of strong attractions driving people to move here. I have the entire city mapped out as A -> C- if you'd like to see.

You don't think Columbus has even 1 D area?

 

I think there were D areas in Columbus 5 years ago. Not anymore though

 

Originally posted by @Marc Rice :

@Nathan W.

Originally I did, but after really thinking through what a D class neighborhood means I don’t think Columbus has any. Even in the worst neighborhoods I would feel uncomfortable walking though but wouldn’t feel threatened for my life due to gang violence or insane amount of crime. I’m sure some worse cities like Detroit or Compton could have those D class neighborhoods where you’d be concerned for your life to walk through but I have not found that in Columbus. That’s why I grade it a C- class neighborhood and not a D.

Good question though!

 Maybe it’s my middle class suburban blood, but every time I drive through Linden and Hilltop I feel fearful for my life!

@Steven Wilson

South Linden and Hilltop are definitely the diciest, by the Casino of Lincoln Village is similar. I will say I have not spent too much time over there walking just driving. It's all subjective, gotta love real estate !

@Eric Kulling

It’s easy to get caught up in the A-D grading, but the problem is that’s it’s very subjective. Online data will only get you an idea of what an area is like. Go to your market and drive around. When you’re in the hood you’ll know it.

Originally posted by @Nick Pawlowski :

@Marc Rice I would love to see that map! I’m from brunswick Ohio and interested in the Columbus market.

Here is a good sheet to get you started in Columbus, Ohio. Please note that this is very subjective and not necessarily what I think. I got this from a local hard money lender.

There are always pockets in neighborhood that are good and bad, sometimes 2 houses on a block are rotten apples and the rest of the block is fantastic.

I would drive around and get a feel of your desired area's.   

If you have an agent, they will have a good feel also.

Duplex area's can be so much different than single dwelling.

Different tenant also!

It depends on your investment,  I think area is a more of a concern with

Single house, Four plex is a different . Different tenants.

Spend a few hours driving around, seeing options and when you get your 

property ready to rent.  Have your rent high, you will still get several applications!

Originally posted by @JD Martin:


One thing I do when I drive an area (though I know my own area in my sleep): I drive around at 1 or 2 PM on a mid-day weekday, like a Tuesday or Wednesday. If I see a lot of able-bodied people (mostly men) hanging around the houses on porches, corners, etc. at that time, I'm unlikely to consider it much further. 

That's so judgmental. They might be independently wealthy! :-D

 

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