When it comes to choosing an Indianapolis rental property, you need more than an agent feeding you listings. You need someone who knows the area, understands the market, and can advise you on the best investment decisions. We provide that. As a fully licensed brokerage, we will not only act as your agent during the purchase process, but we will also offer our knowledge and expertise to help you find the best investment possible.
We take a lot of calls from investors who are interested in the Indianapolis real estate market. Inevitably, one of the first questions they ask is:
“Where Should I Invest in Indianapolis?”
The answer is: “It all depends on your investment goals.”
We have very old neighborhoods and we have newer neighborhoods. Some areas in Indianapolis offer bettercash flow than others, some offer better appreciation potential, and some neighborhoods are more speculative in nature.
In general, Indianapolis is a great city and so is the rental market. Finding the perfect investment property can sometimes be tricky and, because it’s so big, you’ll need to do your research to find a property that aligns with your investment goals.
We can help with that. Especially if you're an out of state investor, we can be your boots on the ground and provide you with research and our expert opinion.
Indianapolis is a city where many investors have decided to invest because it’s considered a “Cash flow Market.” We’re not a market, like in coastal cities, for example, that sees dramatic increase in property values, but we are considered a stable market that produces cash flow.
So, a common question we receive from investors, is “How Much Cash Flow Can I Expect in Indianapolis?”
Generally, investors that we work with want and expect around $200-$300 per month in cash flow for single family homes.
Calculating cash flow is one of the most important and basic calculations you can use to evaluate rental real estate. It’s basically just understanding two big buckets: Income and Expenses.
Simply put, to calculate cash flow, you use the following:
Cash Flow = Total Income – Total Expenses
Remember, cash flow will not be evenly distributed. When we say that investors here in Indianapolis expect $200-$300 per month in income, we don’t mean that they will receive that amount every single month. Cash flow can vary significantly from month to month and from year to year.
We work with a lot of investors throughout the United States and throughout the world. A question we receive from many new to the Central Indiana market is: What kind of cap rate should I expect in Indianapolis?
As you know, the cap rate simply measures the annual net income of a property divided by the purchase price.
Indianapolis investors can expect anything between 8%-10%. Some investors, especially those who are interested in buying in really nice areas, are settling for smaller cap rates.
Another common question we receive from many new investors to the Central Indiana market is: What type of cash on cash return should I expect in Indianapolis?
As you probably know, cash-on-cash is simply the annual pre-tax cash flow of a property divided by the actual cash invested.
Generally, investors in Indianapolis, are shooting for somewhere between 8%-10% cash-on-cash return. But remember, as with cash flow, your cash on cash return can vary significantly year to year.
Property taxes are important, and if you’re investing in Indianapolis or you plan to invest here, you need to understand our property tax rules.
I can't tell you the number of phone calls we've taken over the past several years from our customers regarding property taxes. And, trust me, they are not fun phone calls.
Me: "Hi Joe Investor. Good to hear from you. How can I help?"
Joe Investor: (very panicked voice) "Jeremy, I just received my tax bill and my property taxes doubled!! What's going on??"
That's followed by a few minutes of Joe discussing how his cash flow is killed, we have to raise rents immediately, being a Landlord is the worst idea ever, etc.
The bottom line is that Joe didn't understand how property taxes work BEFORE buying his investment property. And Joe clearly didn't use us to help buy his home, or Joe would have known exactly what to expect.
So, don't be Joe.
Take a few minutes to understand how our taxes work here in Indiana. They are a little different, and depending on how and what you buy, you may have to adjust your budget and your cash flow expectations to account for taxes.
A question that we hear all the time from Buyers is, "Should I have a home inspection?"
We always advise clients to have a home inspection. We recommend having a home inspection regardless if this is your first time buying a home or you are buying the property as an investment home. Without an inspection, you would have no clear way of knowing if everything is working properly and is up to code.
We can get you set up with a great home inspection company as well as a local lender and title company.
If you're an out of state investor, hiring a property manager is a must. If you're local, you may be tossing around the idea of managing your property yourself. T&H, and Property Managers in general, are not good fits for everyone.
You probably don't need to hire a Property Manager if:
We've had many conversations with people over the years who have told us about the stress and the problems that come with managing a home on their own. It’s difficult, and it can be expensive. It’s a huge relief in many cases when owners of rental real estate are able to leave it all to a qualified management company.
We realize entrusting your home to a Property Management company is a big deal.
Here are five reasons why we think you should choose us:
Investing in rental real estate is an exciting and challenging venture. It takes both strategy and, sometimes, some good fortune to be successful.
When dealing with rental properties, there are three key factors to consider:
All three are equally important and extremely dependent on one another.
Inevitably, you're going to need or want to sell your rental property for some reason or another. So, the question is, "When is the best time to sell?"
There is no one size fits all answer to most real estate related questions, and this one is no different. It very much depends on your investment goals and your unique situation.
However, having worked with hundreds of different Investors since 2000, our experience has shown there are 6 keys factors to consider when deciding to sell your rental property.
As we've mentioned before, we can assist you with the whole process.