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How Crime Rates Affect Richardson Rental Property Returns

Crime should always be top-of-mind for property owners, especially if their property is in a high crime area or particularly vulnerable to property crimes.

While higher-crime areas often have lower-cost inventory, investors must balance their desire to maximize profits with the safety of tenants and rental properties. Today our Richardson, Texas property management experts will talk about how crime rates can impact returns. Renting property in an area with higher rates of serious crimes can have profound effects on rental property returns. Here's what investors need to know!

Crime Doesn't Pay the Rent

When deciding whether or not to invest in a neighborhood, property managers should check local crime statistics and weigh the area's crime rates against the potential returns for an investment property. 

While it might seem like building a real estate portfolio of low-priced homes rented at mid-to-higher rental rates is a quick way to make serious money through rental properties, high crime rates can work against that plan. 

Hand writing crime rate on a white board

What Should Rental Property Owners Look For?

It's essential to look at property crimes as well as violent crimes when analyzing a neighborhood for a potential investment. While property crimes might not impact the safety of your residents, vandalism, burglary, and theft can become costly problems to deal with. Frequent repairs from property damage can ruin cash flow and returns. In addition, frequent break-ins and burglary attempts can lead to high turnover rates for a rental property when tenants don't want to live in the area. 

In addition, if vandalism is prevalent in the area, this type of crime often leads to a rise in more serious crimes in the neighborhood. However, violent crimes should raise immediate red flags for property owners analyzing the potential of an investment in a community. Assaults and homicides are significant deterrents when trying to find new renters for a rental unit. 

Where Can a Property Owner Find Crime Data?

Property owners can start their analysis by conducting online research. Using websites like SpotCrime.com or Cityprotect.com can reveal plenty of information about a neighborhood, including police reports, types of crime, dates that crimes occurred, and more. 

Real estate investors can also check the National Sex Offender Public Website (NSOPW) for information about those types of crimes and criminals in the area. For boots-on-the-ground insights, property owners can check the local police department website or talk with crime prevention officers in the area. Property managers also have excellent insight into how area crime rates impact different rental properties in the area, and if a property you have your eye on is in a high-crime area that could be bad for your business. 

Visit the Neighborhood

While data and reports are helpful, statistics don't always tell the whole story. Seeing a community for yourself can also help you evaluate the condition of the neighborhood. This is an excellent way to understand more about the community if you're local. Take a property manager with you and look for:

  • Kids playing outside. Generally speaking, parents probably feel like they're in a safe neighborhood if kids are outside playing with friends and neighbors. 
  • Booming businesses. Businesses don't thrive in high-crime areas. Pay attention to the types of businesses in the area, as well. Note the quality of buildings--if you see too much graffiti and vandalized storefronts, it might not be a good area for your next investment. 
  • Neighborhood watch groups. A protective and supportive community often has a neighborhood watch program actively keeping an eye on homes, neighbors, and businesses. If you see signs warning people about an active program, that's a good sign. 
  • Police presence. In high-crime areas, a heavy police presence is there for the wrong reasons. However, safe communities should also see routine patrols and an active police force keeping homes and residents safe. 

While crime rates aren't the most crucial factor to say "yes" or "no" to a new investment property, they should be a priority worth considering.

a row of coins and a small house model on the desk

How Does Crime Affect Returns?

We mentioned that high crime rates could deter renters from your properties. Without consistent occupancy rates and rental income, real estate investors can't meet their return on investment goals. While it's probably not necessary to only choose rental properties in high-end gated communities with hired security patrols, paying attention to crime rates can be an excellent way to thoroughly evaluate a potential investment property before making a costly purchasing mistake. 

Work with property managers to choose rental properties in safe communities that attract a range of prospective tenants for better ROIs!

A Property Management Company Guides Investors to Excellent ROIs

Working with a local Richardson property management company is one of the best ways to evaluate an area before purchasing a rental property. The right properties attract quality residents, generate competitive rental rates, and reduce vacancies for investors. 

If you're considering the Richardson or DFW area, RentHub is here to help! We help property owners research and identify properties with the best potential for excellent returns, then work with them through the selling process. Our residential property management services also ensure that every rental in your portfolio generates optimal returns. Reach out soon to learn more about buying, selling, and renting with RentHub!

Learn more about what to look for in an ideal rental property! Download our free guide, the "Biography of a Perfect Investment Property."

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