War Zone Properties

I’m finding quite a few properties that are at my valuations to buy in a certain area of town. After talking with some locals I guess it is very difficult to get good renters in the area (because no good renters want to move in there). Also note that war zone in this area of the country is not war zone in terms of crime like a large inner city it is just an undesirable place to live (crime is worst in area). So the questions.

  1. Do you just avoid these properties all together?
  2. For those that have tried properties like this. Was it worth the trouble? Did the investment work out?
  3. Any special rules to use when pricing theses properties.



It’s not a war-zone if there’s no war. In my opinion, a war zone is an area where bullets fly REGULARLY. If you’re afraid to drive through an area during the day because you might be car jacked, then I wouldn’t buy there. If there are chalk outlines still visible on the street, I wouldn’t buy there. If the police avoid the area like it’s the tribal area of Pakistan, then I wouldn’t buy there.

On the other hand, if you’re talking about a low income area where most of the buildings are rentals and low level street crime is prevalent - yes, I buy there. In fact, some of my most profitable rentals are in these areas. As you correctly said, there is more hands-on management required in these areas than in nicer blue collar areas. Furthermore, there is a higher turn-over in these areas because the tenants are only one small mental mistake away from not having the rent (like buying crack or beer with the rent or having the rent stolen). So, the bottom line is that you’ve got to buy at a HUGE DISCOUNT!

One good thing about these areas is that you can often control the entire street by purchasing a few key properties on the street. For example, one of the worst streets in my city was completely infested with drug dealers and users several years ago. It was common for the police to be there 5 or 6 times every day for fights, drug busts, etc. I took over 9 rentals on that street and completely turned it around. I haven’t seen a police car on that street literally in months. In fact, it’s actually a very nice street now!

Hope that helps.



Of course, everything you are going to get on this forum are opinions and mine is if this is the first time you are going to own and manage your own properties, it would probably not be a good area to get your experience in.

You would want to get your experience with a building that has a little less ‘craziness’ going on - because, believe me even a building in a ‘nice’ area is going to throw things at you that you weren’t necessarily equipped to handle in the beginning of your landlord career.

Get your teeth wet, so you know what you are doing first- then tackle a tougher area. Just my $.02.

Either way, good luck!

Stirling Gardner
Hollywood Landlord