SFR Property owners in Indianapolis & Longevity

[Zach Hoereth]

I am interested in input from investors (both local and OOS)  that have owned one or more single family rentals in the Indianapolis market for at least 3 years. I am curious as to what kind of longevity these owners are seeing from tenants in C class properties. 2 and 3 bedroom properties in C class neighborhoods are in high demand right now and I would like to see what people are seeing around that 2-3 year mark. I plan to utilize this information to further educate new investors as to what the long game may look like. 

Cheers,

Zach 

[Ryan Mullin]

It depends on what a C area is...   

Is Christian Park a C area?

Is Brightwood a C area?  

Is Bates Hendricks a C area?  Was it 3 years ago?  

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I hate the grading system, its so subjective.   But I guess if I had to choose a "C" area for the purpose of hypotheticals and examples I would say (some of the not-so-great parts of) Christian park would fit the mold.  

I would say that there is a bit of luck involved..  but also management is key.   We have 1 property (In a C area of Christian Park) where the tenants have been there 4+ years, no maintenance, no nothing...    We have another that had a good tenant for 2 years, then the tenant on the 3rd year moved out and left a 4k turn, including some really nasty, nasty stuff.  Same area, same qualifications, same type of house..   2 different outcomes.  The house with the bad turn, we were able to get cleaned up, add some improvements and raise rent for the next go around.  Bad turns are not the norm..  but will definitely happen in areas like this..  

Now..  an area like Brightwood (which I have seen people call a C area, fairly often) is much more likely to have that bad turn on a majority of the move-outs AND have people not even stay a full year.  Lots of evictions within a few months of moving in etc.  

An up and coming area like Bates Hendricks was 3 years ago (people were calling it a C area then) we had a really good track record where almost everyone paid all of there rent, left the place clean when moving out, etc etc.  Yeah.. some were super picky about maintenance and were a bit concerned with the area at times..  but definitely a demographic that epitomizes the gentrification taking place around there.  Since then the area has improved and values have gone up, etc. 

I dunno...  hope that answers the question..  at least a little.  lol...   

Let me know your thoughts!   Really interesting question, I just get hung up on what exactly these letter grades mean.  :)