Indianapolis Investment Properties & Real Estate Outlook

Indianapolis is the 34th largest metro area in the U.S. and spans 11 counties with an estimated population of 2 million¹.The Indianapolis real estate investment market has an average gross rental yield of 11.7%, and the average Single-Family Rental (SFR) home price is $133,6003 ^3. Home values are expected to grow 7% by December 2019². These strong fundamentals position Indianapolis as an important market for consideration in your real estate investment strategy.

The Indianapolis real estate investment market has a healthy supply of affordable homes, with an average home price that is nearly 30% below the national average. Currently, 96%² of SFRs in the area are occupied, making it a competitive rental market with strong potential for steady cash flow.

In addition to the availability of affordable homes, continued rent growth is expected to keep pace as well. Forecasts show that market rents will see growth in the high-single digits over the next four years, which should support high yield.

When it comes to underlying fundamentals that drive SFR investment returns (job growth, household growth, income growth, and housing supply), Indianapolis demonstrates strength on all fronts². Companies located in Indianapolis that continue to drive job and income growth include Fortune 500 companies such as Eli Lilly Pharmaceuticals and Anthem Insurance, with Columbus-based Cummins Manufacturing expanding into the city by late 2016⁵.

 

 What we like:

• High occupancy rate: 96%² of Single-Family Rental houses are occupied
• Strong gross yields: Average gross yield is 11.7%, which is well above the national average of 9.5%⁶
• Decreasing foreclosures: Home foreclosures decreased by 20.4%⁷ over the last 12 months

 

 Factors to watch:

• Negative equity rate: 15.2%⁷ of homes in the market have an outstanding mortgage balance that is greater than fair market value, which is above the national average

 

 Did You Know:

• Indianapolis is the 34th largest metro in the United States and the only major city not located along a river.
• The Indianapolis 500 is the largest single-day sporting event in the world.
• Indianapolis is within a single-day drive of 70 percent of the nation's population, leading to its nickname as the "Crossroads of America."

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