You've found the "perfect" investment property in Seattle. However, have you taken a look at the crime rates for the area? While a property that seems to have everything a renter wants might seem like an ideal purchase for your portfolio, a high crime rate in the neighborhood can make it a bad investment.
Why do investors need to consider crime statistics when evaluating a potential investment? Our Seattle, Washington property management experts have some insights!
To put it simply, no one wants to live in an area with a high rate of criminal activity. No matter how wonderful a rental home is, frequent occurrences of any crime can deter prospective tenants from putting in an application for your property. If instances of vandalism or other illegal behavior increase in the neighborhood during a lease term, your current residents might not renew their lease.
A full-service property management team knows that even in Class A and B neighborhoods, crime can be a problem. Assuming that "nicer" neighborhoods are free from frequent 911 calls, car break-ins, or vandalism—without doing the research—can lead to buying a property that never stays occupied. Without tenants willing to live in your rental home, you lose critical income.
While investors need to be mindful of criminal activity in a neighborhood, no areas are completely free of crime. However, crime rates can tell you a lot about the area and help you mitigate the level of risk you're willing to take on when considering a new real estate investment property.
Low crime rates and a vigilant police force indicate a safer community that can be a worthwhile investment. In most cases, the local library or police department website can provide statistics on crime rates and the types of crime occurring in the area.
When reviewing reports and statistics from city resources, keep in mind that you're making a long-term investment in the community. If crime statistics are good today, you want to see indications that they will stay that way for the long haul. However, if crime seems to be a problem in the area, investors should look for signs that these issues are improving with a plan for the long-term reduction in criminal activity.
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While numbers and reports can give you an overview of crime in the area, it's also a good idea to talk with local law enforcement and one of the best property management companies. These resources can tell you a bit more than numbers on reports can tell you about the safety of a neighborhood. A full-service property manager can also tell you about the frequency of police activity near your potential investment property. Safe communities see police officers patrolling areas regularly and responding promptly to emergencies. However, high-crime areas see law enforcement frequently but for reasons other than simply being visible to the community.
Property owners must also remember that high crime can also be just one of many reasons not to invest in a property. Areas with frequent or serious criminal activity might also lack good schools or excellent city resources and amenities to attract quality renters.
In Seattle, a property owner can find plenty of areas with high crime, as well as communities with low crime rates and high safety ratings. The key to a successful investment purchase is balancing the research and finding properties that fit your goals and deliver the best returns. Potential tenants evaluate neighborhood safety when choosing a rental home, so it's critical for investors to evaluate crime and safety, too!
An area with "some" crime isn't necessarily a bad investment, as long as you see evidence of a generally safe neighborhood, solid police presence, and numbers trending in the right direction. However, a low-price property in a high-crime area could be a bad investment—unless the area is targeted for reform and improvement through revitalization efforts. In this case, getting in on an up-and-coming neighborhood at a low price point can pay off long-term.
Work with a local property management company to assess a potential property and evaluate research, including crime statistics. The first-hand experience of a Seattle property manager can help you make smart investments (and avoid bad ones)!
Finding an excellent rental property at the right price to add to your real estate investment portfolio can be exciting. However, if you decide that a home in a high-crime area is worth buying for your portfolio, make sure you research rent prices and vacancy rates before making any decisions. If people are not willing to live there because they don't feel safe or secure, this could affect your monthly rental income.
Talk with one of our experts at Real Property Associates about what Seattle neighborhoods might work best for long-term rentals and which properties would be good investments in those areas. Our property management services include helping you analyze potential rental properties so that you make smart investments for long-term success!