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Why Rental Property Owners Must Evaluate Crime Rates for ROI

Property owners need to be very thorough when selecting a rental property location for their Salt Lake City area clients, from assessing the affordability of homes and apartments to thoroughly investigating neighborhood crime rates.

When considering a new property, a Salt Lake City property management company recommends looking into crime statistics and including that information in return on investment analysis before purchasing. Why are crime rates important for excellent ROIs? Keep reading to find out! 

High Crime Leads to Low Rental Property Income

When real estate investors look into the many factors contributing to a successful rental property, one critical factor must be area crime rates. Unfortunately, it's not safe to assume that low crime rates in one part of Salt Lake City mean that every neighborhood also experiences low instances of crime.

Crime rate 

Buying a new rental property in a high crime area can mean gaining a new investment at a low price. However, in most cases, high crime leads to low income--and that property may never pay off or meet your return on investment (ROI) expectations. 

What Contributes to Low ROI in High Crime Areas?

A property management team can tell you that homes in high crime areas struggle to retain tenants. Real estate investors often experience high turnover rates when buying rental properties in communities dealing with frequent vandalism, burglaries, theft, or more serious or violent crimes. 

While property prices could be low enough to allow a property owner to invest without as much cash compared to a low-crime area, residential property managers know it can be challenging to manage a rental home to profitability in crime-riddled neighborhoods. 

In addition to occupancy challenges, investors might also deal with:

  • Frequent (and costly) property damage from vandalism or burglaries
  • Low-quality renters that don't pay the rent, cause damage, or conduct illegal activities in the home
  • Low property values (and a loss of returns) when trying to sell a property that doesn't pay off

While investing in areas with frequent instances of crimes isn't always a bad idea (if an area is experiencing revitalization and crime-reduction efforts), real estate investors must carefully analyze crime statistics before purchasing residential properties. 

How Can Rental Property Owners Analyze Crime Statistics?

So, where can investors find reliable information about crime before buying a new property? A Salt Lake City, UT property manager recommends using a few online resources to learn about a neighborhood. 

Websites like SpotCrime deliver insights into types of crime and where they occur throughout the city to help a property owner evaluate the community for a potential investment. CityProtect.com helps owners connect with local police departments and sign-up for incident alerts to learn more about specific reports. 

While reports and data are crucial to help owners evaluate a neighborhood, don't forget about in-person, firsthand information, too. Working with one of the best property management companies is an excellent way to get firsthand information about the best (and worst) places to invest when evaluating crime statistics. A property manager has local knowledge of how different types of crime can impact a rental property. They can also help you find the best areas (and properties) to deliver on your ROI goals. 

What Should Property Owners Look For?

What aspects of crime (or lack of crime) influence the success of an investment property? Rental owners should consider several factors, including:

  • Types of crime. While nonviolent crimes might seem like an okay risk, sometimes activities like vandalism and burglary attempts in an area are early signs of more serious criminal activity to come. Beware of rising trends in any type of crime that could impact your returns. 
  • Police presence. In areas with high crime occurrences, an active police presence can be a red flag. However, investors should still see an active police force in communities with excellent crime prevention strategies and low crimes. Seeing law enforcement patrol the streets can be a sign of a safe neighborhood with effective deterrents.
  • Children playing in the neighborhood. When parents (and potential renters) feel safe in and around their homes, property investors should see plenty of outdoor activity, including kids playing in yards and nearby parks. 

Young girl on bicycle outdoors smilingHome rental companies can help investors spend time driving the streets and evaluating activity and reports when considering a new property. However, while not every "safe" neighborhood is an ideal place to buy your next property, low crime statistics can be an excellent indicator of a smart investment. 

Choose Properties for Excellent ROIs With Help From a Salt Lake City Property Management Company

High-crime areas don't often pay well for real estate investors. Before you buy your next rental property, work with a Salt Lake City property management company to review crime statistics and analyze the potential return on investment! Reeder Asset Management helps property owners run the numbers to choose investments that generate excellent ROIs. We also deliver residential property management services to ensure every property in your portfolio meets your return expectations. If you're ready for experienced insights into the potential profitability of your next property, reach out soon!

Learn more about rentals that generate excellent returns when downloading our free guide, "Biography of the Perfect Investment Property."

Perfect Investment Property

Posted by: Reeder Asset Management on December 29, 2022