Investing in commercial real estate property in the Denver area can be an incredibly smart and lucrative decision. Earning consistent revenue through your tenants rent allows you to earn a steady cash flow of passive income, especially if you are able to delegate maintenance tasks to a trusted third party entity. But it’s not always a surefire guarantee that you will be able to make a hefty profit from your property, as various factors can play a role in taking money out of your pocket. One such factor to be aware of is how crime can play a significant role in how much your commercial real estate property is worth.
Crime: A Threat to Stable Price Increases and Potential Revenue
It shouldn’t come as a huge surprise that crime is detrimental to property values in a neighborhood, specifically when it comes to violent crime. According to a study in the Journal of Crime and Justice
, crime presents a threat to not only the stability of neighborhoods, but also the ability of property owners to sell their property in a swift manner. High crime areas tend to have higher vacancy rates in regards to both commercial and residential properties, as it will make an area much less attractive to potential buyers.
High Risk, High Reward
Crime is certainly an unfortunate occurrence in any neighborhood, as it can lead to individuals feeling unsafe, both in regards to their living situation as well as venturing out to engage in commerce in the area. However, high crime areas do present a possible opportunity for ambitious investors seeking to revive, rebuild, and profit from urban blight. Of course, there are many factors to consider when engaging in such a plan, as it won’t necessarily be easy or a straightforward process.
Taking the risk to invest in commercial real estate in higher crime areas can pay off handsomely if the area ends up turning around. One needs to look no further than the highlands neighborhood in Denver to witness how dramatic price increases can be in the span of several decades. Homes and businesses purchased in the mid-90’s have seen several thousand percent increases in value in some instances, showcasing the potential for serious gains in regards to investing in these areas. It is important to consider that simply investing in an area will not lead to massive price increases, as there are many factors that play into why an area is struggling with higher crime rates.
If you’re seeking a qualified and knowledgeable real estate firm in the Denver area to assist you through the property investment and development process, Elevation Group is your preferred choice in the mile high city. We offer expert advice and help from start to finish in order to ensure your commercial or residential project is a smooth success, providing you with the needed peace of mind to make your dreams a reality. Contact us today
to begin the process of building your dream property development.