Cameron, I could write a 10 page paper about my experiences. I used to live in Hamilton County then rented out my home (owned 11 years) after I moved back to California - that rental has gone well, great tenants (on Year 4 of lease now), doubled in value from 2013 to 2021 but the property tax increases are substantial. Very few repairs (replaced HVAC and water heater when I lived there) but it's a newer home, built in 2005.
I bought 2 Class C homes on East Side of Indianapolis in 2023 so the higher interest rates are a negative factor. That hasn't gone well. C#1 has had 9 repairs out of 12 months, called in by tenant. I was supposed to cash flow $176 a month but now I'm break even with property tax increase in April 2024 and -$300 to -$500 most months. The seller did the renovation not me. C#2 currently problem solving this - too long of story to comment on here.
I think you could put together a guide for first time or OOS investors so they don't need to look at multiple sources, like city-data, Neighborhood Scout etc:
- Guide to Indy metro areas with median home prices, rents, property tax rates, typical insurance rates, how close these areas are to major employers, which companies are moving to Indy, median incomes for each county, unemployment rate, etc.
This part no one told me about except for honest contractors and property managers:
- get a sewer line scope. In California a home seller is required to get an inspection of the private sewer lateral a certain number of years prior to the sale. The number of years depends on the city. Some require a Certificate of Compliance before close of escrow. Never had an issue with buying in CA with sewer line issues unlike Indy.
- a house can pass inspection but once it's under daily stress from an occupant living there things can start to break
- just because the seller renovated it doesn't mean there won't be capital expenses and repairs. You never know how good the renovation is. I personally wouldn't recommend an OOS new investor do a BRRRR from far away but at least the investor would know what work was done, if the contractor is trustworthy.
- On my property tax rates, 2.72% for Hamilton County and 2.78% for Indy and there's no pattern to the increases, 7% one year, 4% another year then 17% the most recent one (Hamilton County and Indy Class C#1). I don't know if there's a cap for investors. I can't appeal the increases because the assessed values are less than the comparable market values. For someone running their numbers, I would factor in a 17% increase the next year in property taxes to be cautious, not the 3% or 7% most people use. I had to figure this one out on my own.
- Stolen AC unit on East side of Indy and to get a cage.
Knowing what I know now, I would have bought one newer home in the suburbs or townships and accepted the negative cash flow in exchange for appreciation to not deal with repair issues. Feel free to DM for more insights :)
