Several years ago, someone I knew was doing very well in business and was smart enough to invest some of his profits in real estate. He had about three houses and lived in one.

Unfortunately, he did not consider some factors before choosing the location where he would live. The area was downtown and had a high crime rate. By the time he was visited by the third set of men from the underworld, he had to move out of his house and rent a flat in a more secure neighbourhood.

Another friend purchased a parcel of land in a rough part of Lagos State, Nigeria. He works for a multinational company and was well travelled. The land was big and cheap and moreover he wanted to build a magnificent home that requires space which he could not afford in more organised neighbourhoods. The house was beautifully built and finished and as part of his contribution to the community, he made provision for a public borehole facility to give them water free of charge. Then he moved into the building and that’s when the “romance” ended. His house was repeatedly burgled and he narrowly escaped being killed by a gang of armed robbers. He had to move out and relocated to an estate as a tenant temporarily.

Unfortunately, the incidents above are not isolated cases and I am sure several people can attest to these realities. The key lesson in these experiences is that you should seriously consider the issue of security when investing in real estate anywhere in the world.

The more secure a neighbourhood, the higher the value of properties in such an environment. And when a place is unsafe, it is only a certain set of people who you may prefer not to have as neighbours that would live there. Moreover, such a neighbourhood will not be ideal for raising a family due to the wrong experiences they may be exposed to.

Insecure neighbourhoods also generally attract the worst types of tenants. So if you have a property in such a neighbourhood, you are not likely to enjoy regular rental income from your tenants. In addition, violence prone areas also attract individuals who deliberately misuse properties and are not interested in aesthetics or maintaining your property. Lectures on the importance of having a green environment are not appealing to them. And there is constant threat to the security of lives and properties.

Insecure neighbourhoods also have high vacancy ratios. Some of those living there are constantly looking for the opportunity to exit such communities.

Thus leaving it for more rough individuals to populate.

Neighbourhoods with the above characteristics are not likely to enjoy excellent or even average government services or infrastructural developments due to the fact that they are generally filled with people who pay little or nothing in government taxes. They are mostly filled with individuals who live on government, where there is a welfare system in certain countries. Where there is no welfare system, the existing government infrastructures are going to be overstretched and may even be damaged or destroyed without any collaborative community effort to bring restoration and renewal.

The combined effect of all the above on property value is negative. Real estate investments in such an area is a waste except you have won a government project that includes massive transformation of the environment. This will definitely involve ejection of several people from the area and demolition of several structures. The re-creation of such neighbourhoods could lead to significant appreciation in property value.

Sometime ago, Maroko area of Lagos State, Nigeria was a popular slum area with high incidence of crime until the land was acquired, buildings demolished and some land owners were resettled by the Government. The redeveloped “Maroko” is no longer called by that name but property value has gone over the top in that area now.

This is one of the reasons for the growing popularity and rapid appreciation in values of properties in enclosed or exclusive estates popularly referred to as “Estates” or “GRA”(Government Reserved Areas). Usually it is easier for people to regulate and organise themselves when they are all of the same mind. In organised neighbourhoods there are functional resident associations that co-ordinate contributions to joint projects, security arrangements and several activities that promote the well-being of the residents.

In some of such neighbourhoods, entry and exit of visitors are regulated and residents may be given special tags to identify their vehicles or special access permits that they are expected to give to their visitors. There is a general sense of order and mutual understanding. These things boost property values in such areas.

If you are living in a less secure neighbourhood and you can organise people of like minds together it is possible for you to upgrade your neighbourhood. It is possible to organise yourselves and make your neighbourhood safer. This may involve identifying key sponsors of violence and legally dealing with them. But if you succeed,you will not only live more securely but also enjoy the added benefit of appreciation of your real estate investment.