Seeking Market Knowledge in Indiana

[Josh Levan]

Hi, I'm looking to gain some market knowledge on a few different areas in Indiana. I'm looking to target multi-family and apartment properties in areas such as South Bend, Fort Wayne, and Indianapolis. Would love to get some feedback from anyone who currently lives in these area or has investment properties there.

I'd like to start by acquiring any insight into current supply trends in these areas, as well as the demand based on occupancy for these types of properties. Are these currently good markets to begin looking into for a first time investor? 

Thanks in advance for all the help and insight!

- Josh

[Ross Denman]

@Josh Levan Every market is a little bit different and has different market dynamics. NW Indiana has influences from the Chicago market. South Bend has a lot of influence from Notre Dame. Fort Wayne and Indianapolis are larger cities with their own internal dynamics as well. All of these areas are great, but will need to have local expertise in each market. While you can get broad information on the state and the local markets, there are providers and professionals who will have an accurate pulse on the local market that will provide even greater detail.

My personal opinion is that a good property manager will have the best insight.

Local investors are great, but if they are trying to sell you something, the picture that they paint will likely be skewed in their favor.

Realtors can be great, but unless they are investors or work exclusively with investors, most of their expertise will be in higher priced areas that won't generate any cash flow for investors.

Insurance agents and lenders can be a good source as they look at data to better understand risks and liabilities.

Property managers tend to be in the trenches and they have financial incentives that are going to be in greater alignment with your goals. Vacant properties or properties that are in difficult neighborhoods with difficult tenant demographics are not where most property managers care to be. Our jobs are easiest when we are dealing with well maintained homes, in decent areas, that draw in prospective tenants with means and options. Lower end products tend to take much more effort to manage and pay much less.

Some great resources that I frequently use and share with my clients are:

Trulia's crime maps: Trulia’s Crime Map - https://www.trulia.com/real_estate/Indianapolis-Indiana/crime/ This is the easiest way to general data regarding crime in an area or for the overall city. Great tool. (sorry, this is the Indianapolis link.)

City-Data.com, Point2Homes.com, and Niche.com are great places to find demographic and other information about various neighborhoods and areas you may be looking. Things to look at are household incomes, education levels, quality of schools, ratio of rentals to home owners, etc. If the average household income in an area is $25k and most residents do not have any college education, don't expect to ever have a $1,000 rental there. Most residents in this area will be paycheck to paycheck at best... and more likely, hand to mouth. These are tough areas to rent homes as residents are more likely to have trouble paying rent, are not the best at keeping homes clean and repaired, and likely to engage or be victims of criminal activity. It's also difficult to keep decent tenants in tough neighborhoods. All of these things will interrupt the performance of our rental property, increase expenses, reduce cash flow, and impact overall ROI.