SIGNS OF A BAD NEIGHBORHOOD

You should recognize the signs of a bad neighborhood, or the signs of a deteriorating neighborhood, as one of the first steps in buying a home. A bad neighborhood, or a neighborhood that's going bad, can affect you in several ways: it can make you and your family more likely to be victims of crime; it can impact your overall quality of life; and, finally, it will definitely effect how much your home appreciates in value, or even loses value.

Here are some ways to spot signs of a bad neighborhood, or a deteriorating neighborhood:

Visible signs of a bad neighborhood:

Some signs are easy to spot. Broken windows, vacant homes, graffiti, unkempt yards, cars on the lawn, peeling paint, or other signs that the homes are not being kept up are obvious signs of a bad neighborhood..

Another visible signal is the number of people walking in the neighborhood. Check out the area on a warm evening, or on the weekend. Are people out walking their dogs or walking with their children? If so, great. That means that residents feel safe. If not, there may be crime problems.

Take a little time to look at businesses in the area. Are there vacant buildings? Do the businesses in the area look like they're doing well, or are they the types of businesses that gravitate towards low-rent areas? Retail business owners pay close attention to the quality of the area; if the successful businesses have moved out, the owners may know something you don't.

Also spend some time in the area watching for police cars. Police departments assign their officers where they're most often needed. If you see squads patrolling the area frequently, that's probably not good.

Less visible signs of a bad neighborhood:

The neighborhood you're considering may look good based upon the points above, but there could still be underlying problems.

For example, homes in a neighborhood that's in decline don't appreciate as much in value as homes in robust areas. Most newspapers publish articles at least once a year about property values in the various parts of the area. Do a little library or online research for such articles to see if the neighborhood you're considering is keeping pace with overall property values.

Also do so some research to find out how many homes in the area are owner-occupied. Absentee landlords are frequent problems, and their tenants often destroy property values. Likewise, look around the area to see how many apartment buildings there are. Transient people who have no vested interest in a neighborhood usually don't make an effort to keep the area stable, and often contribute to instability and decline.

Another less visible sign, and one that would require a little more research, is the number of police officers who live in the area. Cops know where the bad guys are, and they don't like to have their families live in those areas.

The city of MIlwaukee, Wisconsin, for example, requires police officers and other city employees to live within the city. The far southwestern part of the city has the highest concentration of police officers living there. That part of the city also has the lowest crime rate. Coincidence?

Consider the entire city or county:

When considering buying a home, you should look at the city or county in its totality. Is the population increasing or decreasing? If it's decreasing, find out why, and where the people are moving to.

Also research business patterns to see if major companies are moving into the city or county, or have been leaving.

These two considerations--population change and business patterns--are excellent indicators of where a city or county is headed.

Even if residents are leaving to move to larger homes in the suburbs, and businesses are following to stay close to their employees, that still doesn't bode well for the future. When they leave, the city or county's tax base shrinks, resulting in cuts in services, increased unemployment, and more problems.

If residents and businesses are leaving, the area is facing trouble that you don't want to be a part of.

An island in a storm:

If the area you're considering looks nice, look a little further away. What are neighborhoods like ten or twenty blocks away? It may well be that the neighborhood you're looking at is an island surrounded by bad neighborhoods. Sometimes these "islands" remain intact. More often than not, though, the island eventually becomes just one more bad neighborhood.

Conclusion:

If you're like most people, your home will be your most valuable asset. Buying in a bad neighborhood puts that asset at risk. If you're limited financially, consider buying a smaller home in a better area. You'll be able to trade up later on, and you'll be glad you did.