How to determine if a neighborhood is good or bad?

[Care Anne S.]

Hey everyone!

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!

[Linda S.]

@Care Anne S.,

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 :)