Investing in Indianapolis! Best Neighborhoods?

[Tyler Jahnke]

Hello BiggerPockets Indiana Community!

What are some of the best B and C neighborhoods in Indianapolis for investing? And WHY? I'd love to hear your take on the city.

Thanks!

Tyler

[Ross Denman]

@Tyler Jahnke

Are you looking for long-term rentals or short-term holds. If you are looking for a 5 year investment in the up and coming areas... follow the historic districts.

• Fountain Square
• Irvington
• Fall Creek
• Little Flower Parish
• Windsor Place
• Highland Park
• Brookside
• Tuxedo Park
• St Claire Place

There's really more than can be listed. Be sure to have someone drive the street and ensure that you are not purchasing in a ghost town though. While it's getting better, there are still streets in Indy where all but 3 or 4 homes are boarded up, abandoned, and/or owned by the city. These are very difficult properties to do anything with.

The "short-term hold" strategy is to do a rental rehab and tenant it for about 5 years. It's not a big money maker, but it will wash it's face. As soon as the area comes up enough... wait until your tenant moves out (or don't renew their lease) and do an extensive rehab and sell the home and 200-300% of what you have in it. I've seen this done a few times in Fountain Square. I know of people who had amazing deals in Irvington and will probably sell a house that they have less than $100k in and will sell it for over $200k.

_________

If you are looking for your standard long-term rentals, the most common ones are going to be the 1960's-1970's ranches in Lawrence and Warren areas on the East Side or Eagledale on the West Side. I prefer Eagledale to Lawrence, but they're not that different as far as market rates, maintenance, rental rates, tenant demographic, etc.

I would recommend targeting homes that will rent for at least $800/mo and have at least 1.5 baths. A study that we did last year shows that we are having considerably higher tenant retention on homes with more than 1 bathroom. Families seem to outgrow bathroom space faster than anything.

@Eric Gettelfinger

We manage several rentals in Fountain Square and it's amazing with everything that has been done there, but I feel that it may be in a bubble. It's hard to find "well-priced" deals and while the area is appreciating like crazy, I am not sure that it can continue much further before being over valued.

With that being said, the new tech jobs coming in to the downtown landscape is a huge catalyst for the restorations of the historic neighborhoods. These young professionals love these beautiful homes. There are some great opportunities to be had just outside of the FS area. There is a lot of activity in Bates-Hendricks, Windsor Place, Highland Park, etc. The near East Side (St Claire Place) is starting to come along but it's still another year or so before it sees any sustainable changes.