How Do You Work With Crime Reports?

Question

There are plenty of sources to to run crime reports. How do you decide if area is good or not in regards of crime? Is it better to buy fresh reports or to use free information on internet? How many square miles should be the area around the property that we are looking at? What kind of crime is relevant to our business (Imo like murders, rapes, vandalism) and what can we skip?(like theft)

Vlad Denisov · Answer

Jonathan, I want to invest out of state in Phoenix. I live in LA, so it's about 5 hours by car. I have never been there though. I'm wondering how deep investors research crime activities when deciding if area is safe enough. I mean, in most places it's ok, so as long as you don't feel unsafe walking down the street - the crime should be fine, isn't it? Am I wrong? Can we use this feeling as a rule of thumb?

P.S. How bad were the areas you invested 5 years ago? Was it Superbad? Can you describe how the neighborhood looked like?

Jonathan Taylor Smith · Answer

@Vlad Denisov - Are you investing in / near the market where you live, or out of state? And if out of state, how familiar are you personally with the area? I ask because I've only used free online resources like the Trulia.com Crime Heatmap, which previously had green to yellow to orange to red to indicate progressively increased crime, but is now just progressively darker shades of blue (likely due to the historical association with "redlining"). This includes references to both property and violent crime, but of course the latter is the far bigger concern.

Since I invest in areas that I am also personally familiar with, I can merge this data with my own knowledge to determine if I wish to own property there or not. I also look at the path of progress, and will risk what were the yellow and orange areas if I see all sorts of rehabs and development and I know the City Council plan for the area.

In my market we have rehabs and  knock-down / new-build of homes ranging from $300K to $600K in areas that were previously solid red five years back - and are quickly becoming the place you want to be. But if you were scared of the crime reports back then, you would have missed out on this opportunity.