What You Need to Know About Investing in New Construction Duplexes in Indianapolis

[Ryan Cheek]

Hey BP community!

I wanted to share some insights I’ve gained while working with new construction duplexes in Indianapolis. It’s a market that’s been growing steadily, and I’ve learned quite a bit about the pros and cons of investing in new builds versus existing properties. Here are a few takeaways that might help others considering this type of investment:

1. Affordability and Market Demand

Indianapolis is one of the more affordable markets in the Midwest, making it a great place for investors who want to get more bang for their buck. We’re seeing steady demand from both renters and buyers, especially in areas undergoing revitalization near downtown. The rental yields here are also quite attractive—duplexes, in particular, can provide a strong cash flow.

2. Advantages of New Construction

• Minimal Maintenance: New construction means you won’t need to deal with a lot of the usual maintenance headaches—no leaky roofs, outdated wiring, or old plumbing to worry about. This can be a huge time and cost saver, especially if you’re managing the property remotely or using property management.
• Energy Efficiency: New buildings are generally more energy-efficient, which can be a selling point for tenants and lower operating costs for you.
• Builder Warranties: Many new builds come with warranties, providing some peace of mind for unexpected issues within the first few years.

3. Location Matters

Indianapolis has some neighborhoods that are seeing rapid growth, but choosing the right one can make or break your investment. Areas like Fountain Square, Bates-Hendricks, and Irvington have seen revitalization, but you’ll want to do your homework on specific blocks. Look for areas with planned infrastructure improvements or new business development—these are signs of future growth.

4. Potential Drawbacks

• Upfront Costs: One downside is that new builds can sometimes come with higher upfront costs. However, when you weigh that against the reduced maintenance and energy savings, it can balance out.
• Longer Lease-Up Time: New construction properties might take a bit longer to lease up compared to established neighborhoods, especially if the area is still developing.

5. Financing New Builds

If you’re financing a new build, be prepared for a slightly different lending process. Lenders may require additional documentation or have different terms for new construction. Also, depending on the project, you might be able to lock in a good rate before interest rates climb any further.

I’d love to hear if anyone else has invested in new construction properties, whether in Indianapolis or elsewhere! What’s been your experience?

Looking forward to learning from all of you!