How to prevent your property from being vandalized while flipping it

How to Protect Your Vacant Investment Property from Theft and Vandalism

Real estate is an excellent investment opportunity both in terms of long-range growth in value as well as income from tenants in a rental property. However, there may be periods where no one is living at your property. This can be a frightening time for the owner. When a house is vacant, it is the most susceptible to vandalism, theft and illegal entry. There are several things that you as a landlord can do to protect your investment.

Install Alarms to Protect Your Vacant Investment Property from Theft and Vandalism

When someone tries to break into your property, you want something in place to scare them away. A loud alarm will send thieves running, especially if your property is in the vicinity of other homes. Modern home alarm systems can also be part of a larger security system that is monitored by a security company. They can notify the police when they detect an intruder. They also can notify you so that you can be aware of what is happening.

Install Security Cameras to Protect Your Vacant Investment Property from Theft and Vandalism

No one wants to be caught on video doing something illegal. Security cameras placed in prominent places will act as a deterrent, letting people know that someone is watching the property even though no one is home. Some of the most ubiquitous cameras on the market are motion-activated , so you don’t need massive hard drives to record thousands of hours of boring or useless footage. This footage can also be used as evidence in police investigations, which can help you recover stolen property.

Install Security Lighting to Protect Your Vacant Investment Property from Theft and Vandalism

Thieves and vandals want to remain anonymous. They want to sneak in and out of your property with no one knowing it. Motion-activated flood lights will expose bad actors as they come too close to your property. In addition, having outdoor lighting that runs on a timer or turns on automatically when it is dark gives the impression that someone is home. New LED light bulbs in these fixtures can burn for many hours before they need to be changed.

Meet the Neighbors to Protect Your Vacant Investment Property from Theft and Vandalism

Get to know the neighborhood around your property. More importantly, get to know the people living in neighboring properties. By developing good relationships, these people can be an extra set of eyes keeping watch over your place. You can let them know when the property is vacant, asking them to check in. You could also give them permission to park a vehicle at the property to give the impression of occupancy.

Mow the Lawn

If your property is going to be vacant for a while, it is important that you keep it properly maintained. In some cases, this is a matter of obeying local regulations about grass length. In terms of security, keeping the grass mowed helps people see that the place is being cared for. Most criminals do not want to enter a home where they think someone might be there. Proper maintenance, such as painting and lawn care, makes the property more attractive to potential tenants as well. Contracting with a local lawn service company to come once a week during the growing season is a small cost to maintain the long-term value of your investment.

Visit the Property Regularly to Protect Your Vacant Investment Property from Theft and Vandalism

The key to preventing criminal activity is to give the appearance of occupancy. There is no substitute for visiting your own property. Not only does this give the impression that someone is using the place, it also gives you the opportunity to address maintenance problems before they become more serious. If the property is near your home, you might try dropping by once a day when it is empty. Since most property crime happens after dark, you, a trusted friend or family member might spend a night or two at the property every week. By having some activity at your investment property, it will not look like an easy target to criminals.

An investment property can increase your wealth, but it is also a serious responsibility. If there is a problem with illegal entry, the property will both decrease in value and be harder to rent. By investing in security and giving the appearance of occupancy, you can discourage theft and vandalism and keep the value of your investment.

It is a lot easier than you think to start investing in real estate. Whether you want to be a landlord, flip homes or simply invest in companies that invest in real estate, there are many ways to get a quality return on your original investment. Join SWFL REIA for more helpful tips on breaking into real estate investment!

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How to prevent your property from being vandalized while flipping it

Maybe you’ve accepted a job transfer out of state, or perhaps you’ve found your dream home and jumped on the opportunity. There are a myriad of reasons why people vacate their home before it’s sold, but doing so presents a handful of challenges and makes your home vulnerable to thieves and vandals.

Fortunately, protecting your empty home while selling it is not only simple, it’s also affordable. From using security cameras to keeping the yard in tip-top shape, here are seven simple ways to secure your vacant home.

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1. Check your insurance policy

Insurance companies are justifiably concerned about the liability a vacant home presents. You’ll want to contact your insurance company to find out how your coverage might change once you’ve left your home. You should also ask if there are specific precautions you must take to secure your home, and how long the policy will cover your vacant home. Some insurance companies specialize in offering “Vandalism and Malicious Mischief Coverage” that protects your unoccupied home.

2. Use exterior lighting

Fortify your home against intruders by improving your home’s exterior lighting. A combination of lights on timers and motion activated lights will deter burglars. Be sure that the entrances of your home are well lit, and don’t neglect the sides of your home where intruders are less likely to be noticed. Sheds and detached garages should also be outfitted with exterior lights. There are home security systems that offer enhanced exterior lights that integrate with security cameras. When the light detects motion, the home security camera is activated and records video. You can view that video on your web enabled device.

3. Identify a local contact

If it’s no longer convenient for you to visit your home on a regular basis, then ask someone like a friend, relative, or neighbor to do so for you. Trusted neighbors can easily keep an eye on the property without even going out of their way.

If need be, pay someone to perform the service. There are companies that specialize in taking care of vacant homes by performing interior and exterior checks and making sure yard maintenance is performed regularly. There are even companies that will find people to live in your home while it’s on the market.

4. Protect your home from the elements

Of course you’ll want to take steps to secure your home against intruders, but you’ll also want to protect it from Mother Nature. One way to do so is by using a programmable thermostat that keeps pipes from freezing and cools the house in summer. There are several reasonably priced thermostats with built in Wi-Fi so you can adjust them remotely, and there are also those that integrate with your home automation system.

5. Keep your home security system active

In an attempt to minimize expenses, you might be tempted to terminate your home security monitoring service. That’s a mistake. No matter what kind of neighborhood or community your home is located in, it’s a prime target for vandals and thieves. In fact, some thieves make a living from targeting vacant homes and stripping them of everything they can. Window air condition units, heat pumps, cabinets and copper are some of the hottest items. The nominal cost of home security monitoring is nothing compared to the financial nightmare you’ll face if your home is vandalized.

6. Prepare your home

Before you vacate your home, prepare it by doing things like replacing shoddy entry doors with hard wood or steel doors that boast strong locks. You’ll also want to make sure that all windows are closed and locked and it’s a good idea to set up a few lights on timers. A home automation system gives you the convenience of turning lights on and off remotely. If your home has blinds, turn them up so nature light is let in, without telling burglars that the house is vacant. Make sure you alert your home security company that your home will be vacant and provide them with the name of the people who can access your home.

Protecting your vacant home while selling it takes a bit of forethought, but it’s easy to do and doesn’t have to break the bank. Use these six tips as a starting point to keep your biggest investment safe while it’s on the market.

Car vandalism is very upsetting – arguably even more so because it’s deliberate. Knowing that someone has intentionally damaged your property, but not knowing who or why, is a disturbing thought.

Was it a neighbour with a grudge? Someone who didn’t like the way you parked? Or just a random passer-by causing trouble? Either way you’re left with the hassle of sorting out the mess, possibly at your own expense.

How to prevent your property from being vandalized while flipping it

Car vandalism can include damage caused by:

  • Being keyed (scratched with car keys or another sharp object)
  • Smashed wing mirrors, windows or lights
  • Slashed tyres
  • Damaged rims
  • Snapped windscreen wipers
  • Graffiti

Some forms of car vandalism are purely cosmetic and depending on the severity, you may choose to repair the damage yourself. In more serious attacks, however, where the costs of repair are significant, you may need to make an insurance claim (if you have comprehensive cover) to help cover the costs.

How to prevent your property from being vandalized while flipping it

How to prevent vandalism to your vehicle

Although there is no guaranteed way to prevent vandalism to your vehicle, there are various steps you can take to help limit the chances of it happening:

  1. Use your garage. If you have a garage, use it! It’s estimated that just 22% of homeowners use their garage for parking their car, but this is probably the surest method of keeping it out of the reach of vandals. Clear out the clutter, take an extra two minutes when you arrive home and lock the garage securely behind you. It’s now going to take a very determined effort to vandalise your car – an unlikely scenario by a random passer-by.
  2. Light it up. If a garage isn’t an option, try to park close to your house in a well-lit location. Vandals are often random opportunists, but few are stupid enough to risk being seen or recognised too easily. A driveway is ideal, especially if it’s illuminated by motion-sensor lights, but underneath a street light is a good idea, too.
  3. The watcher on the wall. Is your car valuable or expensive to repair? You might consider installing a CCTV security system to monitor your driveway. It’s a more expensive option, but has the added bonus of not only putting off car thieves and vandals, but potential house burglars, too.
  4. Sound the alarm. Install a Thatcham-rated alarm if your car doesn’t have one factory-fitted. While car alarms are mostly commonly associated with preventing theft, they can also put off would-be vandals who don’t want to draw attention to themselves.
  5. Remove temptation. Some vandals might be motivated by causing mindless damage, but others are playing for higher stakes. A smashed window might be just a smashed window, or it could be an opportunity to grab your valuables. Remove the temptation; take anything of value out of the car when you park, or at least hide them in the boot or glove box.
  6. Record the evidence. A fitted dash cam isn’t only useful for recording events while you’re driving. Some dash cams have a “parking mode” feature which means they carry on recording even after the ignition is turned off. GPS is disabled to save power consumption, so they can carry on recording for longer. A dash cam might not discourage all vandal attacks on your vehicle, but it might prevent the more perceptive criminal from going anywhere near the car. And if the worst should happen, you may even have some useful footage to shed light on the crime.
  7. Don’t leave car windows open. You’re inviting vandals to throw in general rubbish, flammable items such as cigarettes, liquids, toxic or hazardous substances. Some of these may do enough damage to destroy your car, others will simply be a headache to clean up. And if you’ve left your windows open, your insurance may not cover you for any repairs, as most insurance policies require you to take reasonable precautions to prevent the incident from occurring.

Statistics about car vandalism

According to a Freedom of Information request by the RAC , reports of vehicle vandalism rose from 191,180 in 2013 to 210,418 in 2016, a 10% increase.

The region with the most reports was London (26,064), accounting for 12% of the total. Conversely, Dyfed-Powys Police reported the lowest (1,566) outside of the capital.

But these are only the reported vandalism crimes and the actual numbers are probably much higher.

For more information on crime prevention, see the Crime and Policing website .

What to do if your car has been vandalised

If you’re the victim of motor vandalism, the first thing you should do is document the incident. Take photographs of the damage, check any CCTV or dash cam footage you might have, and if it happened while parked at your home, ask your neighbours if they witnessed or heard anything unusual.

If your vehicle was parked in a public or business car park covered by CCTV, ask them to review the footage for evidence.

Unfortunately, stretched police resources mean it’s unlikely they’ll launch a full-scale investigation into a one-off incident of car vandalism, but you should still report it by calling the non-emergency number 101. Ask for a crime reference number – if you’re going to make a claim on your insurance, you’ll probably need that.

As for repairing the damage, you might want to assess the cost before deciding whether to make an insurance claim (if you’re covered) or repair it yourself.

Does insurance cover vandalism to your car?

Comprehensive cover will usually cover acts of vandalism to a vehicle, but you should check your insurance documents to be sure.

To make a claim, your insurer will want to know details such as date and time, location, photos or video evidence and a crime number, if you’ve reported it to the police.

If you’re claiming from your insurance company, you will need to pay the policy excess. For minor repairs such as replacing a wing mirror, the excess might be more than the cost of the repair. You don’t have to make a claim if completing the repairs yourself, but you have to notify your insurance company to accurately underwrite your policy.

Will my no claims bonus be affected?

Vandalism is usually classed as an “at-fault” claim by insurers because they can’t recover costs from the unknown vandal, which means you may lose some or all of your no claims bonus if you decide to make a claim. Some insurers now include no claims bonus protection for vandalism damage, so check the details of your policy to see how your claim will be affected.

How to prevent your property from being vandalized while flipping it

Shelby LeBlanc

Well, I am sure I’m not the first to encounter this issue. I have a flip property and I am having trouble with after intruders. So far. nothing is getting stolen, but it’s obvious someone gained entry after the last person had left for the day. Things were different. lights off when they had been left on, radio (fake occupied) was turned off and certain it was on when I left. Fast forward to now.. What are you doing to reduce the intruder? Are you using a security system, cameras or anything else?

How to prevent your property from being vandalized while flipping it

  • Posts 632
  • Votes 458

David Avery

Someone has a key, or going through a window.

I do believe in “ghosts”. But.. I think if you change the locks and

out up a couple fake cameras , problem solved!

Most Ghost can not turn on and off radio’s but some can turn on and off lights. Bo.

How to prevent your property from being vandalized while flipping it

  • Posts 44
  • Votes 15

Shelby LeBlanc

@David Avery Thank you! Great idea!! I will find a fake camera or two. I would kinda like to know if it is the neighbor so I may get a couple of cheap real

How to prevent your property from being vandalized while flipping it

  • Posts 1.7K
  • Votes 2.6K

Patricia Steiner

Here’s what happens in cases like these. you use a lockbox for trades to access the key. A trade will give the code to a delivery guy – or a friend – or a prospective client and they now all have access to your property. As long as the lockbox is visible/present, it let’s everyone know that no one is living there. It’s time to move the lockbox to a different location and change the code. Let your trades know that the property is being monitored and that they are not authorized to give the code to anyone. I recommend posting a No Trespassing sign on the front and rear of the property as well as a “security camera in use” sign (there is actually a small sticker available at the big box stores) above/next to the lockbox.

While you may not be having thefts and/or damage, it can lead to squatting, a great party location, and a nuisance for those who live next door.

House Flipping Insurance

Lesson Outline

  • Overview
  • Do you need insurance?
  • What type of insurance?
  • How Much Coverage Do You Need?
  • how much should a policy cost?
  • Recommended Insurance Companies

Recommended Provider

Overview

When new house flippers start flipping houses they usually reach out to their current insurance provider that they already use for their personal home and auto, but flipping houses requires a special type of insurance coverage that a typical Home Owner’s Insurance policy does not provide. В

In this lesson, we will discuss what types of insurance coverage you need for your rehab projects, how much it should costs & where to get insurance coverage for your house flips.

How to prevent your property from being vandalized while flipping it

Yes, insurance protects you and your property from all kinds of perils and liabilities that can happen during your rehab.

Your house could burn down, a worker could fall off of a ladder, your property could be vandalized or tools & materials could be stolen.

The insurance polices discussed below will protect your property and personal assets and provide peace of mind.

Flipping houses requires special insurance coverage that your traditional homeowner’s insurance policy will not cover.

Your traditional insurance provider that you use for your personal residence or auto, will likely not provide the type of policy you need for your house flip. В

House flippers typically buy distressed properties that need significant renovations, that will sit vacant for months while the rehab is being completed. Traditional insurance providers and homeowner’s policies view house flipping as ‘high risk’ and are not designed to protect vacant properties or properties that are needing rehab.

For this reason, when flipping houses you will need to consider 3 Special Types of Insurances:

  1. Dwelling Policy
  2. Builder’s Risk Policy
  3. General Liability Umbrella

Dwelling Policy

A Dwelling policy for a Vacant Building Under Renovation is for direct, physical damage to the property. This may affect you as a flipper when doing a light, cosmetic renovation, when the property is on the market for sale, or when looking for a tenant.

For insurers, vacant properties and those being renovated are considered a higher risk, because they are more prone to arson, theft of copper plumbing, vandals and water damage.

Be sure your agent knows if a cosmetic renovation is active on a property, and when it is complete, and that the appropriate values are assigned to the building value and renovation value.

Builder’s Risk Policy

General Liability Umbrella Policy

A General Liability policy may provide coverage for bodily injury that occurs on the premises such as a slip and fall or wrongful death. This coverage does not extend to your general contractor or workers you hire to be on site.

When in doubt, tell your Insurance Provider your business intentions so they can craft a policy that will properly protect you, your property & your assets.

All insurance coverage isn’t created equal, so it’s best to thoughtfully consider how much coverage your need for your house to make sure you aren’t under-insured (or over-insured).

You generally have two different options for insurance coverage:

  1. Basic Form Coverage
  2. Special Form Coverage

Basic Form Coverage

Basic Form provides coverage for the causes of loss listed in the policy, all other causes of loss are excluded.

The perils you’ll want to be aware of that are not included in Basic Form coverage are Theft, Weight of Ice, Sleet or Snow, and Water Damage (such as that caused by burst pipes).

While Basic Form coverage can save you 25-30%, consider these exclusions.

Special Form Coverage

This coverage form provides coverage for all causes of loss except those specifically listed as exclusions in the policy. The burden of proof is on the insurance carrier to prove that a loss was caused by a specified exclusion, or else coverage is afforded.

Exclusions you should be aware of in this type of policy include Sewer & Drain Backup, Earthquake & Sinkhole, Flood and Intentional Damage. Some, but not all of these may be bought back through additional endorsements.

You also have the option of two types of settlement methods that affect your insurance costs and the amount you can recover the event of a loss.

  1. Actual Cash Value
  2. Replacement Cost Value

Actual Cash Value

Actual cash value coverage settles claims based upon the property’s value in it’s current condition. Actual Cash Value is calculated by taking today’s replacement value and deducting depreciation to account for the property’s age and wear-and-tear.

Actual cash value leaves you in a tough position because you may not be able to recoup all of your money that you would need to completely re-build the property.

Replacement Cost Value

Replacement cost value coverage settles claims based upon the amount of money it would take to replace your damaged or destroyed home with the exact same or a similar home in today’s market.

It’s important to note that the replacement cost value only includes the value of the home, but not the value of the land.

In general, at the very least you want to obtain enough insurance coverage to cover the amount you paid for the home (less the lot value) and the amount invested in the property for renovations.

However, in the event of a total loss where you lose the entire structure you will either have to completely re-build the property at full replacement cost or sell off the lot to another investor for them to re-build.

In that scenario, you will want to have enough coverage to pay for the replacement of the property or enough coverage to prevent a loss if you have to liquidate the lot.

When we look at claims information, we see that many of the properties subject to break-ins, thefts and vandalism are usually vacant or going through renovations to prepare them for sale or the next tenant. I’m sure it’s truly disappointing to arrive to show a house that was finished only two days before and see it broken into and missing key components like stoves, ovens, air conditioning, the furnace, water heater, and maybe even copper plumbing and electrical wiring. All your hard work and investment is gone and now you have to deal with police reports and put in more work and money to get it ready for sale or rent again, pushing back the start to getting a return on your investment.

Who are the “usual suspects” for break-ins?

  • Neighborhood kids looking to make your vacant house their “club house”.
  • Professional thieves looking to take your possessions and turn them into their gain.
  • Contractors or their sub-contractors returning to the property they have worked on, knowing what’s inside the house.

Your first line of defense: deterrence.

If you own a home that has been vacant for a while, chances are there may be other vacant homes in the same neighborhood. Make sure your house is not the easiest target on the block. Lead thieves and vandals to believe the house is being lived in or at least being watched. Don’t make their “job” easy for them.

Locks & Door Reinforcement.

Properly secure your property. Doors and windows should be locked with sturdy hardware. If you are purchasing a property or taking possession back from a tenant, change the locks or get them re-keyed. Who knows how many copies of keys could be floating around? Even with good locks, doors can still be kicked in. Consider reinforcing your exterior doors to keep the bad guys out. Adding metal door jamb shields and hinge shields can make a world of difference. Securing basement windows is also critical as this often provides an easy access point to the house and to expensive housing components like water heaters, the furnace, pipes and wiring.

Neighbors.

Getting to know your neighbors can be a big benefit. Discuss what your plans are with house and let them know that you want to make sure they have good neighbors moving in as renters or buyers. Good relationships with your neighbors allow you to have “eyes and ears” around your investment property. They should feel free to call you if they see anything suspicious.

Inspections.

Driving by regularly and making sure the house is still secure is important. It may provide a good opportunity to wave at the neighbors or get out and talk to them to build that relationship. If you notice the house has been broken into, call the police and don’t enter the house until an officer arrives. The intruder may still be inside!

Yard maintenance.

Maintain the outside appearance of the house. Keep the yard cut and clean. Trim back trees and shrubs that may block views of the house and provide thieves places to hide. Make sure that you also keep the mailbox from filling-up with mail. Newspapers stacking up on the lawn and mail flowing out of the mailbox is an indicator to a thief that nobody is at home. Even though you have stopped bills from going to the house or the past residents have redirected their mail, remember you may still get “junk” mail that will fill-up a mailbox fast.

Lighting.

A well-lit exterior will discourage thieves from approaching your house at night. Lights should be placed at a height where it’s not easy to disable them and consider using motion detector lights that instantly light up an area, startling a would-be thief. Lighting the inside of the house is critical too. Using lights on timers in various rooms and radios that come on and go off in the evening may make your vacant home look and sound occupied dissuading potential thieves and vandals. There’s a product out now that looks like a light bulb you would put in standard lamps. It records your usage and replicates your patterns at night gradually turning out lights downstairs and ending with turning out an upstairs light like you would when you go to bed. These lights can also be set-up to turn on if the doorbell were to ring, imitating a household being startled awake by a late-night visitor.

Board-up.

When appropriate and required you should board-up your property. There are several board-up solutions. The easiest fix might be to send over a handyman with plywood and long screws, but there are also cage systems, steel “shields” held in place by special hardware, and even a heavy-duty Plexiglas-type product that allows light in the house. It doesn’t make the house appear boarded-up but is strong enough to keep thieves and vandals out. Use the best method available to you that is also compliant with local codes. Remember, insurance policies will often require, as a security measure, that vacant houses are boarded-up.

Alarm Systems.

Posting a sign on the front window or in the yard indicating an alarm is monitoring the house is a great deterrent. Actually having an alarm is better, and I would urge you to get one that works best for you. Some alarm systems and components can be purchased for a few hundred dollars and there are a ton of choices. We found several portable systems that can be moved to another property once a vacant property is rented or from renovation to renovation as you are flipping. Get a system that is flexible, does not require Wi-Fi and monitoring is set up on a monthly basis.

Wrap Up

To best protect your investment, layer your security. If you create a security system that consists of the 8 components we addressed today, you will be well on your way to moving a theft or vandalism down the block. These types of losses at vacant or renovation properties aren’t inevitable; it just takes some effort and consistent monitoring by you or your property manager to protect your valuable investment.

How to prevent your property from being vandalized while flipping it

If you’ve purchased a fix-and-flip property and are preparing to start renovations, it’s important to know what type of insurance is needed at different stages of your project. While you may be under the impression you can just add your fix-and-flip property to your personal homeowner’s policy, it may not be as simple as that. To avoid making a costly mistake, you should consult with your insurance agent regarding the coverage you will need in order to avoid loss in case of an accident, theft, vandalism, weather event or other unforeseen threat to your property.

Below are some of the considerations you should be aware of and the insurance products that are available to address the unique risks for fix-and-flip properties:

Builder’s Risk Insurance

A typical homeowner’s policy covers risks on an occupied home, but a builder’s risk policy will protect your property from specific types of loss associated with construction. For fix-and-flip projects that include a plan for ground-up construction, this type of policy will cover risks throughout the construction phase—until the fix-and-flip project develops into a finished home.

A builder’s risk policy can also come with coverage for things like damage to building materials, tools and appliances—even damage that occurs off-site. For example, “property in transit” coverage will protect materials as they travel from the supplier to your construction site.

Unoccupied and Vacant Home Insurance

Although they may sound like the same thing, an “unoccupied” home is different from a “vacant” one. An unoccupied home is one that is set up for occupancy. For example, the utilities are turned on and there are furnishings and/or personal belongings inside. With an unoccupied home a resident may be absent for periods of time, but the property is expected to be occupied in the near future. A vacant home is one that is not lived in, and has no indicators that an occupant will live there any time soon.

Both unoccupied and vacant home insurance products are specialty policies that provide financial protection from damage or loss of a home that is uninhabited at the time of the claim. You should be aware that a conventional homeowner’s insurance policy typically does not cover fire, theft, vandalism, liability or other claims on an unoccupied or vacant property. For example, if a fire occurs in an unoccupied or vacant home, a standard homeowners policy would likely not cover it, but an unoccupied or vacant home insurance policy would. An unoccupied or vacant home insurance product can be purchased as a stand-alone policy or as an endorsement to your standard homeowner’s policy.

For many reasons, an unoccupied or vacant home is considered a greater insurance risk than an occupied one. Vulnerability to theft and vandalism, lower emergency response times, and inattention to events such as burst pipes, roof damage or faulty wiring are just a few examples of increased risk associated with unoccupied or vacant homes. In theory, for example, a fire taking place at an occupied home would likely be reported and extinguished more quickly than one where no resident is present to discover and report the fire promptly.

Do You Need Unoccupied or Vacant Home Insurance?

This is a question you should ask your insurance agent, but generally speaking, if your fix-and-flip home will be vacant or unoccupied for 30 days or more, an unoccupied or vacant home insurance policy is called for. While terms may vary by policy, an insurance company will typically deny home owners’ insurance claims that are made if your home is left unattended for longer than 30 days. The determination of whether your property is vacant or unoccupied will effect your insurance rates, so be sure to speak to your insurance agent. It is quite possible that your insurance company will have specific restrictions around the length of time your fix-and-flip property can remain vacant or unoccupied.

How to prevent your property from being vandalized while flipping itFlipping houses in a “bad” neighborhood might seem counter-intuitive to you because industry pros constantly say “look for the worst property in the best neighborhood.” Of course, this is to ensure that once you have turned your ugly investment property into a beautiful home you won’t have any trouble finding someone willing to buy it. opens in a new window

While that can be sage advice in some markets, not every fix-and-flip investor can expect to find a viable distressed home in a highly-desired neighborhood with a sufficient profit margin built in to the deal.

Flipping houses in highly competitive markets has risks as well

If you are flipping houses in highly competitive markets opens in a new window where on-list distressed properties are selling at prices that don’t leave room for a sensible ROI, it can be beneficial to widen the search into “bad” neighborhoods. These areas have been deemed “bad” based on certain indicators, such as high crime rate, low school scores or high number of vacant or neglected homes in the vicinity.

What are the risks of flipping houses in a “bad” neighborhood?

The biggest risk you face in flipping a house in a neighborhood that is perceived to be undesirable is you may not find a home buyer that is willing to call that “bad” neighborhood home.

To mitigate that risk, the most important thing you can do is research the neighborhood thoroughly and look for “positives” that you will be able to use when marketing the home later. The vast majority of the information you need about the local area can be found online. If you do your homework, you may find that there are plenty of positives in the data that can make your investment a viable one.

For example:

  • Are crime rates in the area opens in a new window trending downward? Many neighborhoods that have had a reputation for crime in the past may actually be improving. If you find a fix-and-flip investment property in an area where crime rates have been steadily falling, that neighborhood may be transitioning upward–and that can be an ideal place to invest.
  • Are there other homes on the block that have recently been improved, or that appear to be well-kept? If there are other homeowners or renters who take pride in their homes, this can be a selling point later.
  • Look for signs of recent development in the area. Have real estate developers taken an interest in nearby neighborhoods and begun building apartments, condos or housing developments? Have there been recent improvements in area shopping centers, or the addition of new markets, cafes or coffee shops in the vicinity? These are all signs that a “bad” neighborhood is in transition.
  • If the local public school scores opens in a new window are low, investigate whether there may be a magnet, charter or private school in the area that can serve as an option for concerned parents.

Take precautions to prevent theft or vandalism of your property

Another risk of operating in a “bad” neighborhood is the threat of crime during the renovations. There may be criminals in the area who look for opportunities to steal unattended tools, materials, fixtures and appliances, so you may need to incorporate increased security measures to mitigate that risk. Read our blog post “Preventing Theft at Your Fix-and-Flip Work Site” opens in a new window for tips on how to avoid this potentially expensive threat to your project.

What are the potential rewards of flipping houses in a “bad” neighborhood?

ROI — If you can purchase your fix-and-flip investment property at a great price, repair and renovate it and find a buyer who sees the same positives about the surrounding neighborhood that you found in your research, you can reap a healthy profit on your fix-and-flip project.

Improving communities — When you purchase distressed properties in neighborhoods that are in transition, you are providing desirable homes for hard working home buyers and their families, and helping neighborhoods improve–and that helps entire communities improve.