I am sure there may be other factors that I don't know about that contribute to your dilemma but the definition of high crime area is very vague.If it was me I would give the neighborhood a try. 

It all depends on the area and hassle factor your looking to put up with.   

Not I, but I met a guy on the beach in DR @ 5am for cappuccino's, (every morning for a week), who was active in that endeavor.As a contractor he has done this for many years & was currently down in the Naples/Marco Island area. 

When we buy un/under-loved property to be a long-term rental, we factor a deep retrofit into our deal analysis and offer.  

Good morning L.

I’m not very big on appreciation plays(renting a property with negative cash flow in hopes of appreciation) There are way more X factors than you can control.  

I just got the inspection report this morning (April 24) and I should get the appraisal report this Friday (April 26th).

Also, what other factors would you take under consideration to override the higher historical cap rate?

But if you had net loss without factoring salary, Yes, you can offset other income two way. 1) If you AGI is below 150k and 2) also because you can qualify for Real estate professional if you do rentals full time. 

I’ve used it before on primaries since there’s always an emotional factor that is hard to put a dollar figure on when you just want the perfect house that meets all your wife’s criteria, but for investment properties I usually just offer the highest I’m willing to pay if it’s a competitive situation, need to avoid the crab in a barrel syndrome and becoming the greater fool when it’s an investment.