Indiana Multifamily Market

[Patrick McKee]

We purchased some multifamily units in Indianapolis last year and are now considering an acquisition in the Lafayette market.  Does anyone have experience with investments in this tertiary location?  It seems that Purdue is the major economic driver yet apartment occupancies are strong and new apartment deliveries somewhat limited.  Thanks in advance for any insight you can provide!  

Thanks,

Patrick

[Ross Denman]

I don't have any experience with investing in the Lafayette market, but I am familiar with the town. Yes, Purdue is a major economic driver and if you are looking in to MF investing, then you will want to understand the differences between college rental investing and standard MF investing. We have managed properties that offer rents by the room (room shares) but sometimes the security deposits can get tricky with common area damages. We usually rent with leases that cycle with the school year to ensure that the vacancies are rent ready for prime rental season. If you own mid to large sized MF's in college towns, on-site security may be an important consideration for various reasons, like assaults, sexual assaults, disorderly conduct, etc. Lastly, I would put very durable finishes and amenities in the units to keep your make-ready costs manageable. Many of your tenancies will be 10-22 months... you don't want to have to repaint and install new carpet every year or two. College students can be notoriously messy and hard on units in general. Keeping that cost down in between tenants will be important.