Indianapolis Market Insight from an Investor Focused Agent

[Devon Shaw]

Hello!

I'm Devon and I've been an investor focused agent in Central Indiana since 2019. I just wanted to share some insight into what I'm seeing in our market the last few weeks!

-The rental market has made a correction: Q4 rental activity and prices took a dive. 
We are finally starting to see things pick up, but there is a lot of supply out there now so you HAVE to ensure you are pricing your rentals right and putting your best foot forward. Condition is crucial to limiting vacancy.
Reducing your rental rate to place a tenant faster will usually pencil out better in the long run as opposed to more vacancy at a higher rate.
I am being pretty conservative with my rental estimates when helping clients look for potential properties to buy.

-Now is the time to buy: I'm having pretty good luck helping clients purchase homes below list/market values right now. I feel if rates continue to tick down more and as we head into spring prices and competition are going to jump up making it tougher to buy. If you're in the market, I advise trying to buy before the end of Q1! I know rates are still squeezing cash flow, but remember, there are SO many other benefits to owning rental real estate. 

-Good multi family inventory is scarce: Our MF inventory in decent or better areas is low. If your goal is buying something 2-4 doors you may have to be patient for the right thing to pop up. 

-Properties need work to be rent ready: I am finding that on average, properties need 10K-15K to be rent ready. This usually includes cosmetics and smaller inspection issues that weren't really able to be used as leverage for negotiating. As mentioned above, condition is so important to attract a good tenant quickly. Most properties tend to need fresh paint, new flooring, and other refreshes to get up to par. There are a lot of smaller inspection issues we see pop up as well that generally speaking aren't "Major" but can still be considered a liability or safety issue in a rental and need to be addressed. (Pro tip: labor and material costs will only continue to rise so it will usually save you money in the longrun to do as much work as possible sooner rather than later.)

 -Where to invest?: We continue to have great success in Anderson, IN. Prices are affordable, rent to purchase price ratios are much better than Indy, and tenant quality and rental demand are solid. 

Kokomo also has a lot of potential with the announcement of multiple electric car battery facilities going in. We expect this to bring an influx of people to fill jobs which in turn should raise property values as well.  

Community Heights/Emerson Heights are two quaint neighborhoods in Indianapolis. Rental demand is good and they have great proximity to a major hospital. 

Christian Park is another neighborhood on the east side of Indianapolis that has seen a lot of improvement over the last few years. 

I hope this info is helpful to anyone looking in the Central Indiana market!