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Real Estate Investing
Crime Reports Affect Real Estate Values
There are many factors that affect the cost of homes. Location, as we all know is the biggest factor. Some homebuyers may not realize there has been many studies that indicate that crime reports in local areas affect the cost of homes and should be carefully considered when choosing a neighborhood.
Those studies conclude, nearly unanimously, that crime tends to have a negative affect on property values. A study performed in Chicago found that just a 10% drop in crime usually increases property values by two to nearly five percent. Crime rates are usually reported per capita, that’s just the average per person rate taking the number of incidents of crime and dividing by the total population, the lower the number the better.
This approach does not consider the impact on quality of life.
One thing every parent should look into before selecting a neighborhood is the sex-offender database. Economists Leigh Linden and Jonah Rockoff studied the impact of that living close to a sex-offender has on property values. They found that home values within a tenth of mile of the offender fall by 4% on average.
There are some things that you can research on your own: What are the crime rates in your neighborhood versus others? Ask your future neighbors: Is there a neighborhood watch program in place? How are the response times of the police? A neighborhood watch program indicates that they are serious about keeping the neighborhood safe.
If some good news can be found in all this it’s that when crime rates affect property values then it can affect property tax revenue. Making it a priority for local government to do something about the crime that may be making your neighborhood unsafe and lowering their revenues. | 
