When you think about strong investment markets in Indiana, Kokomo might not top your list—but it should.
This mid-sized city, just an hour north of Indianapolis, is quietly becoming a hotspot for investors seeking both affordability and long-term potential.
Whether you’re a first-time buyer or looking to expand your Central Indiana portfolio, here’s what you need to know before investing in Kokomo.
Why Investors Are Paying Attention to Kokomo
Kokomo’s real estate market is defined by three key factors: low entry prices, strong appreciation trends, and a growing local economy.
As of mid-2025, the average home in Kokomo sells for around $176,000, with some properties listed even lower depending on location and condition. That means investors can enter the market with far less capital than they’d need in Indianapolis or surrounding suburbs.
But affordability isn’t the only appeal. Over the past year, home values have increased by more than 8%, and over the past decade, the city has seen cumulative appreciation of nearly 110%. That kind of growth puts Kokomo ahead of many similarly sized markets in the region.
A City on the Rise
One major driver of this momentum? Jobs.
Stellantis and Samsung’s $6.3 billion EV battery plant is expected to create nearly 3,000 jobs in Kokomo. That’s a significant injection of demand—particularly for rental housing.
The ripple effect is already visible. Rents in the area have increased by more than 20% in the past year, and more than 1,000 new housing units are either planned or under construction to keep up with demand.
As more workers relocate to the area and Kokomo’s economy continues to diversify, housing will remain a key need. And for investors, that spells long-term opportunity.
What Areas Are Worth Exploring?
While Kokomo doesn’t have the hyper-localized market segmentation of a city like Indianapolis, there are a few areas that stand out:
Downtown Kokomo: Experiencing major revitalization. Properties here tend to be more expensive but offer strong appreciation and rent potential.
South and Southeast Kokomo: Affordable and popular with both families and working professionals.
Northeast Kokomo: Still developing, but offers solid entry prices and upside.
Before buying, take a close look at local comps and talk with an agent who understands the nuances of each neighborhood.
Should You Expect Cash Flow?
In today’s market, cash flow in Kokomo is still possible—but not guaranteed. While home prices are relatively low, taxes and rising repair costs can eat into margins.
That said, if you buy right, rents ranging from $1,000–$1,500/month are realistic for renovated 3-bedroom homes.
Kokomo may not deliver the same cash-on-cash returns as it did five years ago, but it’s still far more favorable than many markets outside the Midwest. Plus, with strong appreciation trends and steady population growth, there’s real equity potential over time.
Final Thoughts
If you’re struggling to make the numbers work in Indianapolis but still want to invest in Central Indiana, Kokomo deserves a hard look.
It offers:
Lower acquisition costs
Strong rental demand
A rapidly expanding job market
Long-term appreciation upside
Like any market, Kokomo isn’t without its risks. But with the right team and a solid investment strategy, it could be the next smart move for your portfolio.
Our brokerage team works with investors every day to uncover the best deals across Indiana. Reach out and we’ll help you determine if Kokomo aligns with your investment goals.
