5 Reasons to Invest in Indianapolis Rental Properties

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The Circle City.

The Crossroads of America.

By now, you’ve most likely heard one of these names within the rental property investment community. That’s because Indianapolis has been, and continues to be a one of the most desirable residential investment markets in the country.

There are literally hundreds, if not thousands, of investors who own rental Real Estate in Central Indiana. And, they continue to buy at a feverish pace.  

If you’re considering a real estate investment opportunity in Indianapolis, you’ve come to the right place.

There are 5 big reasons why Indianapolis is such an attractive place for REI investing:

  1. Stable housing market
  2. Extremely low unemployment
  3. Population growth
  4. Low cost of living
  5. Solid returns

1. Stable Housing Markethousing bubble - stable housing market

When the recession hit back in the early 2000s and the housing market crashed, our market only declined 7% compared to the rest of the country, which declined at a staggering rate of 50%. Within the last few years, Indianapolis has seen its most noticeable growth since the collapse.

The Indianapolis market is seasonal. But, you may also be surprised to learn that even with our bitterly frigid winters, Indianapolis is one of the top performing cold markets according to HouseCanary.

2. Extremely Low Unemployment

Indianapolis is home to some well-known companies including FedEx, Lilly, Salesforce, State Farm, and others that keep a steady influx of desirable jobs available.

Not only that, but the tech boom has also hit Indy. Due to the low cost of living and cheaper taxes, more and more companies are opting to move offices and headquarters here, opening up hundreds of new jobs every year.

As of 2021, the unemployment rate in Indy stands at 3.3% compared to the national average of 4.6%.

3. Population Growthincreasing graph showing growth

Looking back on historic trends, there has been a steady increase in population over the years. It’s estimated that the city is growing at a rate of around 8,000 people per year since 2010.

As more jobs come to Indy, it only makes sense that more people will follow to fill those positions. With an already increasingly large population of over 800,000, there doesn’t seem to be any shortage of potential renters.

Related: The Definitive Guide to Investing in Indianapolis

4. Low Cost of Living

As a Midwestern city, Indianapolis boasts a very affordable cost of living compared to other markets its size such as Austin and San Francisco.

It’s been named by Forbes to be one of the best cities for renters and is listed in the 50 biggest cities as needing an income of around $65k to comfortably own a home. 

5. Indianapolis offers solid returns 

As you may have learned from some of our other blogs, Indianapolis is considered a cash flow market. It’s one of the few major markets where investors can sometimes still achieve the coveted 1% rule: a home commanding $1,000 in monthly rent can be purchased for $100,000, for example.

Making an offerAnd, if you are patient, and treat your investment as a long-term play, you will most likely see a favorable rate of appreciation. 

Keep in mind that Indianapolis is obviously not a coastal city, where values can swing wildly in either direction. Indianapolis is steady, which creates a less risky investment. However, if you want to buy and sell 2-3 years later, don’t expect to see much of a profit.

Want to Invest in Indianapolis? Well, it’s Not Always Easy

As we discussed earlier, investors are actively buying in Indianapolis at a very high rate. We receive daily inquiries from investors about the Indianapolis market and work with Investors each month to acquire homes.

Simply put, it’s a HIGHLY competitive market out there.

So, if you want to enter our market, you’ll need a game plan, which consists of employing a highly experienced Real Estate Agent who will work hard to bring you the deals that meet your investment criteria, along with a Property Manager to lease and manage the home – assuming you don’t manage it yourself.

In the end, nothing worth doing is easy. Those investors who both plan well and show patience can be successful.

Editor’s Note: This post was originally published on January 4th, 2017 and has been updated for accuracy and comprehensiveness. 

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About the Author

Jeremy Tallman

Jeremy is the Chief Executive Officer and Managing Broker for T&H Realty Services. He has been active in the Central Indiana real estate market since 2000 and leads one of the most successful single-family property management companies in the state.

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