From cap rates to cash-on-cash return, investors have no shortage of metrics to gauge a property’s potential.
But at the root of nearly all of them? Rental cash flow.
And while we are seeing non-existent cash flow in Indianapolis, you should still want higher returns down the road.
That’s why landlords—and the property managers they hire—often shoot for the highest rent possible.
And on the surface, that makes sense.
But here’s the trap: chasing top-dollar rent can backfire. Badly.
Unless you’ve grossly underpriced a home in one of Indy’s most competitive neighborhoods, the rent price tenants agree to usually only goes one direction during negotiations: down.
So while the instinct is to list high and “see what happens,” that strategy often backfires—leading to longer vacancies, price drops, and ultimately, lower returns.
Here are three reasons why overpricing your Indianapolis rental is one of the worst moves you can make:
High Price = Longer Vacancy
Imagine you list your two-bedroom bungalow in Broad Ripple at $1,200. A renter sees it—it’s right at the top of their budget—but ends up choosing a nearly identical unit down the street for $1,000.
That happens more than most landlords realize. And often, they never know price was the dealbreaker.
Platforms like Zillow give instant feedback—clicks, inquiries, even showings—which can create a false sense of demand. But clicks aren’t commitments.
It’s never been easier for a renter to tour a home, and that ease leads many landlords to stay overpriced for too long.
And that costs you.
More time on market means more showings, more wasted time, and worst of all—more vacancy.
One month of vacancy on a $1,200 rental wipes out the gain you would’ve had if you’d priced it right at $1,100 from day one.
One month of vacancy on a $1,200 rental wipes out the gain you would’ve had if you’d priced it right at $1,100 from day one
And vacancy is more expensive than most landlords think. You’re still on the hook for utilities. You may have to keep the heat or A/C running to protect the home. There’s no rent coming in to offset those expenses. And an empty property is more vulnerable to break-ins and vandalism, especially if it sits for weeks without activity.
In most cases, speed wins.
Those Who Have Seen the Unit will Ignore Price Changes
People make irrational financial decisions all the time—there’s a whole field of behavioral economics built on that truth.
Sometimes, that works in your favor. A warm, confident showing might win over a tenant even if your property isn’t perfect.
But if your rental is overpriced? Psychology works against you.
Back to that $1,200 Broad Ripple unit. Even if a renter hasn’t signed a lease elsewhere, once they’ve mentally written your property off as “too expensive,” it’s hard to get them back. Even if you later drop the price, they’ve likely moved on—and they’re not coming back to check.
That’s the danger of overpricing: your renter pool shrinks faster than you realize.
And fewer prospects means more pressure. Suddenly, you’re not just dropping to $1,000 to match the market—you’re slashing to $900 just to spark interest.
Overpricing doesn’t just delay leasing. It can drag your price lower than where you should’ve started.
Many Potential Residents Will Never See Your Listing
Speaking of a shrinking pool of Renters, setting a price that’s too high will have an immediate impact on those that see your listing.
On listing platforms like Zillow and Realtor, etc. searchers can easily set a price range for themselves. If you’re not in that price range, they won’t see your property – it’s that simple.
If you’re in a Renter’s market in which there is more quality inventory than potential Renters, this is doubly painful.
Every day you can have your listing viewed is critical as vacancy is a cash flow killer.
So, How Should You Price Your Rental?
In today’s Indianapolis market, consistent cash flow is getting harder to find. If you’re lucky, you might see $100–$200 per month in cash flow per door—but even that’s becoming rare, if even available at all.
That’s why strategic pricing is more important than ever.
Start by putting yourself in your renter’s shoes. What are they seeing on Zillow or Facebook Marketplace? While many listings are overpriced, these platforms still shape what renters think is reasonable. So study them.
Then look local. What are true comps in your neighborhood? Is your property Class A, B, or C? Does it come with the amenities renters expect at that level?
Overpricing, even by $50, can be the difference between leasing in a week versus a month. And a month of vacancy? That’s $0 in income, plus utilities, turnover costs, and risk exposure.
In a market like Indy—steady, reliable, but not explosive—overpricing isn’t just a small mistake. It can seriously undercut your long-term returns.
If you’re working with a property management company, pricing guidance should be a core part of what they do. Make sure they’re advising you based on data, comps, and current demand, not just wishful thinking.
The goal isn’t to price high. It’s to price right—so you get rented fast, avoid vacancy, and actually see some cash flow when the dust settles.
