The Landlord’s Guide to Indianapolis’ Seasonal Rental Market
Having rented homes over many, many years, you could say we have a pretty good handle on the Indianapolis rental market.
It’s our business to understand it, to track it and to plan for it.
And we do.
If you own or plan to own rental real estate in Indianapolis, it’s critical that you, too, understand one inherent truth about the Indianapolis rental market: Seasonality.
Seasonal meaning there are times of the year when it’s really, really good to rent your home and other times where it can be difficult to rent your home.
We understand that our market isn’t necessarily unique – many, if not most, markets throughout the United States experience the same thing – but it’s important to understand this important reality.
So, we thought we would spend some time discussing seasonality in the Indianapolis rental market. Is all of Indianapolis’ Rental Market Seasonal?
The short answer is, yes. Even in super hot areas like Broad Ripple or, recently, downtown Indianapolis, it’s always easier to rent homes during certain parts of the years. However, areas like this always have a pool of Tenants to draw upon.
But, clearly, there are areas which experience seasonality at a greater level.
Where Does the Most Seasonality Exist in Indianapolis?
Areas within the Townships outside the beltway (I-465) experience intense seasonality.
The main driver for seasonality, as you might have guessed, is school systems.
Generally, the most desirable school systems in Central Indiana are located outside of I-465. So, when school lets out in May, we see a spike in interest and applications.
And, likewise, when school resumes, which is usually the last part of July or first part of August, our activity slows dramatically.
What is the BEST Time of Year to Rent my Indianapolis Rental Home?
Generally speaking, our busy season starts in January. I’ve always scratched my head at this a little bit, but January is always super busy for us in terms of showings and applications.
Call it a pent-up demand, a “new year/new house” mentality… whatever.
In some years, in fact, January has been our busiest month in terms of showings and applications.
That brisk activity continues right through the first quarter and into the second quarter.
All of those months – particularly March, April, May and June – are excellent times to rent a home. You’ll likely get maximum rent during those months and experience the least amount of days on market.
What is the WORST Time of Year to Rent my Indianapolis Rental Home?
As we discussed above, once we hit July, we see a slowdown.
August is generally very slow, as are September and October.
In spite of what you may think, we do have a decent amount of activity over the Holidays, meaning November and December.
How Do I Avoid Seasonality?
Look, we get it. It’s sometimes extremely difficult to plan things so your home goes on the market at exactly the right time of year.
As an investor, if a home comes on the market and the number looks solid, it doesn’t make sense to avoid purchasing it simply because it may hit the rental market during a slow season.
Likewise, don’t over-think trying to extend a Lease Agreement to end at the perfect time either. There are a lot of things that could interfere with that plan as well, such as a delayed turnover, a request from a Tenant to stay longer, etc.
Bottom line: Sometimes you can’t avoid our seasonality.
But, don’t fret, there are plenty of things you can do to overcome the seasonality.
Tips to Overcome Indianapolis’ Seasonality
First, your success in getting your property rented timely during the slow season is going to come down to price and condition.
In a slower market, there will be a smaller pool of candidates and more inventory. Supply vs. Demand is not on your side during this time of year.
So, it’s important to price yourself aggressively, respond quickly to prospects and ensure your home shows as well as possible.
To simplify it: You HAVE to create a GREAT product during the slow time of year.
Don’t sweat a $25 or $50 reduction in rent to get your home rented more quickly. The rent reduction you offer pales in comparison to the cost of an extended vacancy.
In addition, don’t create barriers to your property. Not allowing pets, for example, is a major mistake we feel some investors make, particularly since nearly 70% of our market has pets. Not allowing pets, particularly during a slow part of the year, can multiply your struggles.
As we’ve discussed, there are some definite challenges to getting your property leased in a seasonal market. However, we lease homes every week of every year and, if you plan accordingly and push the right buttons, you’ll have success, too.