You are on the hunt for a new turnkey rental property. The numbers look good, the price is right and you are ready to pull the trigger and put this baby under contract! Not so fast bub!! Are you really ready to proceed? This is the time when you need to start digging deeper and doing proper due diligence. This due diligence is very important in determining if you are going to buy a pig or a quality investment property. It is a part of the step by step process you should be taking when researching your future investment property.
Many investors don’t want to take the time to dig deeper, confirm numbers, evaluate neighborhoods and really get to know what you are about to buy. My guess is that in a lot of times, these are the same investors that get burned and give Real Estate Investing a bad name. There are many horror real estate investing stories out there and most of them come from investors who did not research enough or put the proper time in to determine if this would be a quality asset.
But not you, you are going to do this right! You will take the time and dig as deep as you can because you want to feel warm and fuzzy inside when you do decide to sign that purchase agreement. Part of the due diligence that needs to done when evaluating a new potential rental property is to confirm market rent prices are up to par with what you are being told. Another part is to check crime statistics for the neighborhood or street the house is located in. If you are purchasing out of state rental properties like I am then this makes it more difficult to really find out if the neighborhood/street you are buying in is OK. Without actually being there for yourself or having boots on the ground, how in the world are you going to know if you are buying a house in a bad area? The only way to find out is to check local crime statistics on the address and location of your potential rental property.
Crime statistics are gathered and reported differently in all markets and it is very important that you understand this. In some cities, law enforcement will report every infraction, in some cities they will under report their crime stats. Not to mention, in most cities, the good and bad areas can vary based on just streets. You might have a block of a really bad high crime area but then two blocks over is a well-respected great neighborhood. This is why I personally don’t look at the crime statistics for a city as a whole or even by zip code. That is just too broad of an analysis to use on a particular house in one area. I like to use tools that break down the crime reports down to the actual address and neighborhood of a property.
The methods below are great tools to use when you need to evaluate crime stats on a new potential investment property. These tools allow you to see reported incidents down to a street level. I have used these tools for all the turnkey rentals I own and will continue doing this on my future rental properties.
**Important** Keep in mind that these tools will probably never be 100% accurate but they absolutely are the best options you have without living there yourself. Also, not all cities will show up on these tools. Some may be in one and not the other and vice versa. This is why it is important to use all the tools below to see the full picture.
Online Tools To Use For Evaluating Crime Statistics
Trulia’s crime heat map is my favorite tool to use for checking crime stats on an out-of-state rental property. You just enter the address and choose the Crime tab and it will show you the heat map. Green is the safest you can get, Red is a high crime area. You can click on the little black dots to see what the reported incidents are as well as the dates. Let’s analyze the screenshot below. The screenshot is of a neighborhood in Indianapolis called Bates Hendricks.
This particular neighborhood is really close to down town and is on the up and up. The last turnkey I bought is actually in this same neighborhood and I love this property. Based off the heat map below, you will see that in this same neighborhood, there are areas which have high crime, moderate crime and low crime. It literally varies by street and this is exactly the kind of helpful information I use when looking at one particular investment property. If there is moderate crime on the street I am analyzing it may not fully deter me from purchasing the investment. It’s up to you to look at the actual reported incidents and evaluate what kind of crimes they are. Obviously if there are murders and rapes then you don’t want to proceed. If some of them are not too serious like a “failure to appear” (as indicated in the picture below), then these aren’t so bad. Ultimately it is up to you to determine what your level of risk is for crime in a rental neighborhood.
SpotCrime is another online tool that shows you reported incidents. You just type in the address and see the results. The bar on the right hand side is a key that explains what each icon signifies on the screen. The below picture is the same exact neighborhood as above yet it does not show as many incidents. In this scenario, Trulia appears to be the better option for this city.
CrimeReports is an online tool that works very similar to the ones above. You enter an address and it will show you all reported incidents as well as sexual offenders. The picture below is the same neighborhood and although it does not show your standard criminal activities, it is showing the registered sex offenders by address and even picture. This is helpful for me to know when I am evaluating a potential rental property.
Raidsonline just like above will show you a cool map with all the reported incidents it can get. You just enter the address and view. The picture below (same neighborhood) is actually showing me more reported incidents than any of the other sites I have checked so far. This will vary from city to city so please be sure to check all of them and see which one appears to be most accurate for you.
Non-Online Tools To Use For Evaluating Crime Statistics
The methods described below are alternative ways used to find and evaluate crime statistics for a particular property.
5) Contact a Local Property Management Company
I am a big proponent of having a property management team manage my out-of-state rentals. This makes my life a lot easier and I can enjoy the passive income with little hassle. A local property management team will most likely have a deep understanding and knowledge of the neighborhoods in whatever city you are looking to invest in. It is always a good idea to contact a PM and ask for their opinion on a particular address. A good PM will have all this knowledge and be more than happy to share it with you.
6) Contact the local Police and/or Fire Dept.
Another good idea is to actually speak to a local police officer or even fireman. These professionals will also have deep knowledge on these neighborhoods and in most cases would be willing to help you out.
7) Contact local real estate investors
Go to a site like BiggerPockets and start connecting with local real estate investors from the city/locale in question. Do searches in the forum for your city and start sending messages and even post a new thread asking what the crime is like in the neighborhood. You can get valuable feedback from the locals and a lot of people will be more than willing to share.
All the methods above can and should be used when evaluating the crime statistics for a potential rental property. You no longer have to wonder how to find crime statistics on rental properties because as you can see from above, the tools are there. It is up to you to put them to good use and properly analyze your next investment property.
Do you know of other ways to check local crime stats?