Rental in Indiana and Indianapolis?

Question

Hey all! I am thinking about buying rental property in Indianapolis, or Indiana due to lower cost. I would love some opinions from people who don't buy property there or who own rental in this state and why they do it, if it's good, or bad! Please give me the good the bad and the ugly! 😊 thanks!

Alora Glaze · Answer

Indianapolis is a great place to start! I actually moved to this market to start my real estate ventures due to the affordability and financial success of my peers in central Indiana.With that being said, Indy is a street-by-street city. Being out-of-state, your best bet is to connect with a local realtor or a property management company that is experienced with real estate investing and can assist in your assessment of what properties will work for you and your financial goals long-term.We work with a lot of folks who purchase buy & holds within Indianapolis - certain areas are appreciating rapidly, which makes it harder to buy & get in as a rent-ready owner - whereas others areas are just starting to come-up. If you're using this strategy in Indianapolis, you end up having the advantage over other investors, who may be doing fix/flips and trying to sell quickly. You can have your pick of neighborhoods to still receive profitable rental rates until the surrounding streets/property appreciate to your satisfaction and you'd like to sell.For the last couple years, Indianapolis has been experiencing an influx of young professionals, which as mentioned above, contributes to a solidly rising economy for the state over-all and further stabilizes the rental market; in my opinion you can't go wrong with a buy & hold right now, especially if you're keen about running the numbers and comparing your comps for long-term profitability.Also, do not underestimate the amount of information you can pull from other social medias - there are groups on Facebook and tags on Instagram that you can follow that will have opinions from locals and other investors who are rental property owners that may allow you to grow your knowledge of success rates and rental rate climates.Best of luck to you as you make your decision!!

Brian Snider · Answer

@Lais Lima Indy is a great buy and hold market as there is a high percentage of renters around the city, in the downtown, & the suburbs. Properties are much cheaper compared the rest of the country. You can find rentals with minimal work, ones that need rehabbed, or ones with tenants already in place. It is easy to achieve the 1-2% rule in Indy.

Account Closed · Answer

@Lais LimaI chose Indy for all the reasons already stated in this thread. I bought a 2 bedroom single family that needed a light rehab in a safe blue collar area. It only took 2 weeks to place a qualified tenant at market rent. The tenant moved in on 01/04/20. So far so good.

Mike D'Arrigo · Answer

@Lais Lima Indianapolis is a good cash flow market if you buy in the right neighborhood and asset class. Indy can vary neighborhood to neighborhood and even street to street. Don't make the mistake of buying a cheap property in a low end neighborhood on the promise of high returns. They might look good on paper but they don't pan out in reality. I recommend sticking to at least a C class property with rents of $800/mth or more. Indy has not only good cash flow but has strong economic and demographic fundamentals. It has a growing population, growing jobs and a diverse, modern economy making it ideal for long term buy and hold. We've been active in Indy for almost 10 years and know the market well. Feel free to contact me if you want some insight.

Amie Lieurance · Answer

Hi @Lais Lima!! Indy is a great market for buy and holds...one of the best in the country in my opinion. It is a landlord friendly state, the economy is great, consistently lower unemployment rate than the national average, etc, etc. There is a ton of opportunity here and the Midwest is less effected by recession.

Ryan Dossey · Answer

Indianapolis broker & buy/hold guy also own one of the top "we buy houses" outfits in town. More than happy to give you feedback on something before you buy it. We see a LOT of out of state folks get hosed by someone sending them comps that aren't exactly honest.

Ivan Guillen · Answer

@Lais Lima Hope to see you get started in Indy! While you are correct, property prices are lower in indy this does not mean that every opportunity is a true deal. Indianapolis, like any other city, has plenty of opportunities but Indy varies from street to street. This makes it harder for an OOS investor looking at opportunities on their own. I emphasize the importance of having a team that you can trust here in Indy. You will need a broker and PM that can be straight forward with you, know the city like the back of their hand, can help you build a team, and is experienced in the investing space. You should vet any potential teammate before committing to them, because this will save you and them time in the long run. 3 easy questions to ask to ensure they are qualified to help you:How many investment properties do you own yourself?How many investment properties do you manage? (PM) or have you closed on this month/year? (broker)How long have you been in Indy?Every broker has access to the MLS, so it is best to ensure that they are providing extra value to your investing experience. Feel free if you have any questions on the Indianapolis area, as I would be glad to guide you in any way I can!Best of Luck!

Luis Alvarez · Answer

@Lais Lima I jumped into the Indy market last year, and as an out of state investor from L.A. who is familiar with rougher neighborhoods, I realized quickly that in Indy the rougher parts aren't necessarily always apparent right off the bat. This is likely due to many homes being of similar architecture types. During my two trips out there, getting a rental car and driving the streets was the best way for me to get a feel for it...before going I also utilized Google Maps street view (albeit these images are mostly dated). Property prices out here (in CA) and unfavorable landlord treatment in general made considering to Indy easy. Best of luck!

Alora Glaze · Answer

@Marcello I.We stay primarily within central Indianapolis (465 circle) - we tackle fix and flips aggressively so we can put ourselves in those higher appreciation markets that have a bit more competition. With that being said, we do not actively avoid certain areas because you'll find the overall economy in central Indy is doing very well for a number of investment strategies, including buy and holds.However, if I'm being honest, the areas that typically detour us and make us take additional time to assess and run numbers are primarily the eastern and western skirts (i.e. 38th street on either side) of the circle as you'll find slightly higher crime rates and you'll see a larger demand for rent-ready properties than for fix and flips necessarily.It just depends on how long you are willing to wait for those c/d class neighborhoods to appreciate - which is where that advantage of the buy and hold strategy comes into play again.

Marcello I. · Answer

@Alora GlazeAs an out of state investor I totally agree that Indy is street by street. I noticed this instantly during my first visit in December. That being said, it does seem like even the c/d class areas are on the up and up. Are there any neighborhoods that you are specifically avoiding at all costs at this point in time ?