Indianapolis Investment Property Market

Indianapolis Property Market Overview

Indianapolis is the 34th largest metro area in the U.S. and spans 11 counties with an estimated population of 2 million1. The market has an average gross rental yield of 11.7%2 and the average Single Family Rental (SFR) home price is $133,6003. 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.

Affordable Homes and Strong Yields

The Indianapolis market has a healthy supply of affordable homes with an average home price that is nearly 30%4 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.
  • 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
  • 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
  • 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."
  • 1 U.S. Census Bureau
  • 2 John Burns report, October 2016
  • 3 Zillow, September 2016
  • 4 Zillow, October 2016
  • 5 Fortune 500 companies in Indiana
  • 6 John Burns Quarterly Report, August 2016
  • 7 Findthehome.com

Real Estate Investment Insights

Investment Style: Balanced
While each property will differ, this market is likely to have properties that provide a blend of yield and appreciation.
Inventory:
Home Value *
$137,100
$195,700
National Avg
Home Value Growth (YoY)
5.3%
6.9%
National Avg
Rent **
$1,184
$1,406
National Avg
Source: Financial data from Zillow includes single family, condo & cooperative homes of the Indianapolis market, updated on 2/28/2017
Job Growth (YoY)
1.9%
1.5%
National Avg
Household Growth (YoY)
1.3%
1.0%
National Avg
Estimated Months of Resale Supply
2.4%
3.6%
National Avg
Household Income
$58,200
$58,538
National Avg
Supply, Demand & Affordability data includes single family homes only, updated on 3/14/2017
  • Arrows indicate the directional change since the last update. No arrow indicates that there was no change in the data or no previous data is available.
  • * Home Value: includes all types of housing, including primary resident, condos, investment properties, etc.
  • ** Rent: includes all rental properties, including Single-Family Homes, multi family units, etc.