One of the first steps in buying a home is learning to recognize the signs of a bad neighborhood. A bad neighborhood, or one that is in decline, will limit your home’s appreciation, increase your chances of becoming a crime victim, and affect your entire way of life.

Some signs of bad neighborhoods are clearly visible, while others are less so.

Visible signs of bad neighborhood.

Obviously visible signs of a bad neighborhood include broken windows, empty houses, graffiti, cluttered yards, abandoned cars, peeling paint, or other signs that houses are not being properly maintained.

A less obvious but still visible sign is people walking through the neighborhood. Visit the area on a warm night or on the weekend. Do people go out to walk their dogs or with their children? If so, that means the area probably has little crime.

Look around at the businesses in the area. Do you see empty storefronts or office buildings? Does the area’s businesses seem to be doing well or are they the type of businesses that gravitate toward low-income areas? Retail business owners keep their fingers on the pulse of a neighborhood. If successful business owners have moved elsewhere, perhaps you should consider a different area as well.

Pay attention to the number of police cars you see. Police departments put their officers where they need them most. Unless the area you are viewing is very exclusive, frequent police patrols mean the area is likely more prone to crime than others.

Less visible signs of a bad neighborhood.

If the area you are looking at is looking for the points above, that does not mean that the area is not prone to less visible problems.

A telltale sign of a deteriorating neighborhood is property values ​​that are stagnant or not keeping up with values ​​in other parts of the city or county. Do a little search in the library or online for newspaper articles to see if houses in the area are appreciating at the same rate as houses in other parts of the city or county.

Ask neighborhood residents which houses are owner-occupied and which have absentee owners. Absent landlords don’t always evaluate their tenants well, and bad tenants can ruin a neighborhood. Look around the area to see how many apartment buildings there are. Apartment dwellers are often transient, have little or no interest in a neighborhood, and can be sources of trouble.

If possible, try to find out the number of police officers who live in the area. Police officers know where criminals work and they don’t like their families living in those areas.

Many cities require that police officers and other city employees live within the city. Milwaukee, Wisconsin is one of those cities. The most southwestern part of Milwaukee has more police living there than in any other part of the city. That part of the city also has the lowest crime rate. This is no accident.

Consider the entire city or county.

When considering buying a home, look at population and business patterns. Is the population increasing or decreasing? If it is declining, where are people moving and why?

Are large companies moving to the city or county, or have they left?

These two considerations, population change and trade patterns, are excellent indicators of the future of the area.

Even if residents are moving to larger homes in the suburbs, and companies follow them to stay close to their employees, that still doesn’t bode well for the future. When they leave, the city or county tax base shrinks, resulting in cuts in services, rising unemployment, and more problems.

If residents and businesses leave, the area faces problems that it doesn’t want to be a part of.

Resist buying on an “island”.

Even if the neighborhood you are looking at appears fine, you should examine neighborhoods ten to twenty blocks away. It may well be that the neighborhood you are looking at is an island surrounded by bad neighborhoods. Sometimes these “islands” remain intact. However, most of the time, the island is eventually engulfed by the surrounding bad neighborhoods.

For most people, their home is their most valuable asset. Buying in a bad neighborhood puts that asset at risk. If you have financial constraints, consider buying a smaller home in a better area. As your home appreciates, you’ll have the equity you need to trade it in for the home you’ve always wanted.