I drove into a lovely and very famous neighborhood here last year. When every person in the street owns a pitbull (the most gentle of all dogs on the planet, apparently), and the AC units are in cages, I focus my business plan on other neighborhoods.
Someone recently posted their LTR got broken into between tenants and lost $6500 in appliances and mechanicals. While that can happen in any neighborhood, a neighborhood that has cages around the AC units seems to be pre dispositioned for it.
I can't help but wonder if this post is in response to the recent "don't use the term 'war zone' " post, but...
...some of my properties are in bad neighborhoods. I've never felt threatened because I treat my tenants with respect and courtesy, and I've made a point to introduce myself to all the neighbors and offer my phone number should they ever have any concerns. This has gone a long way toward fostering a sense of trust and mutual respect.
Most of the crime in these areas are drug-related, and if you're not perceived as a threat and you treat the dealers with basic decency you're likely safe from violence. The vast majority of assaults/homicides are against people who "had it coming," i.e. they went out of their way to screw somebody over.
Yes, I will probably continue to purchase properties in marginal neighborhoods. Sure, there are plenty of places I wouldn't venture because of crime statistics, but here in the Rust Belt one can't be too choosy if one wants to build their portfolio without a massive (i.e. $5mm or more) bankroll. In my city, a well-kept upper/lower double in a nice neighborhood tops out around $300k, which each unit fetching around $1300 monthly. But in a marginal neighborhood, I can buy a smaller and less attractive upper/lower double for $65k with each unit fetching $650 monthly.
I paid 25k for a duplex, that rented for 850. I held it for a couple years. Did nothing to it, collected rent for that entire time and sold it for 40k. My total return was north of 50 percent.
Cons: I had another duplex, that I had to evict the tenant out of. The utilities had been off for a month. I got in there, the toilet had been filled with human feces and left to “marinate” for that entire time. This was in the summer in the south. That’s a con...just FYI.