It’s no secret that Indianapolis, Indiana is a growing city with many great things occurring and the stats to prove it. I learned about Indy while living in Austin years ago when I was priced out of buying investment properties there. My dream of financial independence through real estate investing is what led me to Indy. I decided to continue growing my real estate portfolio by purchasing investment properties in the up and coming city of Indianapolis. I had such great luck and saw promising returns that I ended up moving here to help build my mini real estate empire.
I haven’t even been living here for a whole year yet and I already know it was one of the best decisions my wife and I could have made. The cost of living here is much better compared to where we came from in Austin and we have already purchased 3 more rental properties in the short time we have been here. We now have 6 houses in Indy including our primary house and my monthly cash flow is now in the $3k+ range soon to be in the $4k range. Below I will tell you why Indianapolis is such a great city to invest in real estate.
The cultural trail running from Fletcher Place to Downtown.
What is All the Hype about in Indy?
Indy has had a steadily increasing population and economy for years now and it does not look like this trend will stop anytime soon. I have been compiling all these stats and recent articles that will give you a better understanding of what is going on here. These are all recent stats/articles from 2017.
Economy/Job Related
- Indiana is leading the midwest with the lowest unemployment rate.
- The tech industry is only just starting to take off. Even the CEO of Salesforce Marketing Cloud thinks Indy is “the best kept secret in the country“. Salesforce now has a tower right here in downtown Indy. One of four total towers that they have and the others are in NY, San Fran and London. This should tell you a lot about what is going on here and the potential it has.
- According to Forbes, Indy is listed at the #5 top city for tech jobs as its paving the way for creating new tech jobs in 2017.
- Indy has ranked #9 in the nation for Best Small Business Cities in America in 2017.
- Indianapolis is ranked #4 for Best Cities for Women in Tech 2017. Are you seeing the trend here with the technical industry? Tech jobs are the way of the future and it seems where the tech is at is where the money flows!
Transportation
- There is a massive project that will soon be underway that will drastically improve the transportation in Indy. A $50 million dollar grant has been given to Indy to help build the Rapid Bus Transit Line. Transportation changes like this have been known to increase property values and make cities more desirable to live in.
- Indianapolis has been named the “most improved” bike friendly city in 2017. Riding bikes around Indy is something you must do. It really is a super bike friendly city. My wife and I bike all the time through downtown and we are in love with the Indianapolis cultural trail.
Sports
- I am a huge sports fan and can not get over how many sports teams there are here. For professional sports there is an NFL, NBA and WNBA teams. For minor league sports we have hockey, baseball and soccer. The soccer team has already made a bid to become a professional team on the MLS. Hopefully they will be approved which will give us another professional sport. And not to mention college sports. Butler Basketball is right here in Indy and there are yearly NCAA tournaments held here.
- Obviously I don’t even have to mention that this is the racing capital of the nation. I have already been to the Indy500 and the Grand Prix and it was amazing!! There are so many races and cool events held at the Indianapolis Motor Speedway.
Downtown Growth
- Downtown Indianapolis is already a bustling, clean and beautiful place and the city has zero plans on stopping the growth. There are numerous projects and on going construction that will continue changing the downtown scene as we know it for the better.
- Downtown living as you may already know is making a huge comeback in the United States and Realtor.com has recognized Indy for being one of the top 10 cities where downtown is making a comeback.
Real Estate/Living
- Indy has been labeled the best city for renters by Forbes. Thanks to lower average monthly rents and high levels of affordability. For now at least!!
- Did you know that Indiana is one of the only states where renter’s can actually deduct rent paid? Its crazy I know but this part of the reason why Indy is a great place to be a tenant. Which is great for us landlords!
- Ranked #5 for top cities where you can live really well on a $60k salary.
- We have our own HGTV flipping show that is helping shine a national spotlight on indy. Thanks to Two Chicks and a Hammer with their Good Bones tv show.
- See all current homes for sale in Indianapolis.
Travel/Tourism
- Indy has shattered expectations and was listed as one of the top 50 best places to travel in 2017 by Travel and Leisure.
- Indy has had 4 record years of record tourism. People are coming here and they are loving it!
- Conde Nest Traveler has recognized Indy as a top city to watch in 2017
So what does all this mean for you the investor?
Well quite simply said, you better start buying as much real estate as you can here while it’s still affordable. It’s clear to me that all these changes and witnessing them as I live here now are all the same things I saw happen in Austin, TX. I lived in Austin for 14 years before I moved to Indy. Now I prefer not to compare Indy to Austin but what I can tell you is that what I saw happen in Austin all those years I lived there is exactly what I am seeing happening here in Indy today. And for those of you do not know about what happened in Austin, lets just say that it is way over populated now and the real estate prices are absurd. Not necessarily a bad thing, but imagine if you knew what was going to happen in Austin years ago. You would probably be a stinkin’ millionaire by now. 😉
Is Indy the next Austin? I don’t know for sure but if it’s going to be then I want to be on that train when it takes off. As for me, I will continue to keep buying investment properties here in Indy while I still can. At some point as the real estate prices get higher I will eventually stop purchasing because the numbers just wont make sense to me anymore. But right now, they make perfect sense!
What turnkey companies do you use in Indy?
I’ve been against using turnkey since I heard a few bad experiences from fellow investors plus the profits aren’t as big (at least from my experience).
Hi Chris,
I am no longer buying turnkey properties. I stopped when I moved to Indianapolis. Its a lot more difficult now to get good deals especially from a turnkey provider.
That’s why I was asking. Normally you make money on the purchase and if you’re paying market value for properties, then you’re starting from behind.
How’s the market in Indy? The provider I worked with in KC used to have a spreadsheet of prospective properties. I asked him about an updated list and he said it’s too competitive now and that I’ll have to tell him my criteria and he’ll keep an eye out for it. I was also looking at a house hack/partnership with a family member in upstate NY and it’s crazy hot there as well. All the multifamily houses go on the market, have an open house, and set a deadline for bids the following day. Crazy. I wish I lived in a market where I could get deals on my own. Turnkey works for out-of-state investors but your returns will definitely be better if you can cut out the middle man
The market is hot in certain parts of Indy however there are still a bunch of areas where you can pick up really good cash flowing properties in low crime areas. It takes time and research to find these but they are out there trust me, i just bought one a few weeks ago. Grant it these areas will not appreciate as fast as the other HOT parts but they are great for cash flow purposes and in solid areas.
When the providers tell you its too competitive I think what they really mean is that there is not enough money for them to make on it anymore by being the middle man unless they charge you an arm and a leg. So yes youre right when you say that in these times, its best to cut out the middle man.
I had no idea you can deduct your rent there, that is cool!
Number one for me is steady jobs. So all that tech moving in is great. Plus that infrastructure getting built is another bonus.
It is crazy how fast this move is going to speed up your plan!
Oh I know, I was shocked when I found out about the rent deduction. I have never ever heard of that. So far im very happy with the progress I have made since moving here but im not close enough yet so I need to keep buying! The key is to make sure that all my rentals cash flow well and are in areas that I like.
I have been watching Two chicks and a Hammer and really like it. I have been looking at some turnkey properties in Indy, but have been a little cautious because of job growth in the area. Your article is swaying me the other direction though! I may take the plunge soon and give Indy a try.
Ive become a big fan of their show. Its cool seeing them filming these rehabs in the neighborhood I live in. They are becoming a big hit! Oh the job situation here is really good. I wouldnt let that slow me down at all. The only thing that I dont like about Indy is the high crime which is why its very important picking the right investment properties that are not in those areas.
A bit off topic but I’m curious what your asset protection setup is like. Are any of your rental properties in LLC’s or any other entity? Would be curious to see a blog article from you on this.
The houses that I have been purchasing in cash (which is my last 3) are all under an LLC. The houses I have with a mortgage are just under my name with no real asset protection other then insurance policies. I have always wanted to get umbrella insurance though for these properties I just havent got around to it to be honest. I think I will do it soon though for peace of mind at least.
What are your thoughts for a first timer looking into getting in their first rental property. If I’m located in NY and want to get into the Indy market would a turnkey or website that helps facilitate the buying like roofstock.com be a good bet?
This is awesome post on Indy. I had been looking for some information on Indy macro and micro level growth and you shed good light by those links in your post. I have few properties as an out of state investor and so far so good, cash flowing and managed by PM. Which areas/neighborhoods are you keeping your eyes on? Are you mostly within center township around downtown or looking in suburbs outside 465 loop as well. Thanks for your post, it was insightful.
Hey there! Glad to hear you are investing in Indy and its going well for you so far. Curious to what PM youre using? You can email me at cashflowdiaries@gmail.com if you prefer to tell me there. There are a bunch of neighborhoods I like and they all vary around Indy. I stay away from high crime areas unless its super close to downtown. Here are the neighborhoods I like so far but I dont have properites in all of these yet. Bates Hendricks, Fountain Square, Garfield Park, Speedway, Beech Grove, Pike Township and pretty much anything north of 52nd street. I dont have any properties outside the loop, I wouldnt mind getting one there but its tough to find good deals there.
I use FSHouses PM. I bought TK properties through them couple of years back. I am no longer looking to buy TK as it is not the best way to scale the tiny RE empire in my opinion. Good for the start but once have some experience as a remote landlord and the business, I preferred to go through BRRRR approach. What you are doing is the way to go and I am glad your move to Indy has started to bear fruits. BH and Fountain square has been quite hot lately and difficult to find deals. Good luck and much success to you…
I really love the honesty of this blog. It seems like I missed the tk window in Indy. Is the best value now for cash flow there to go at it the more traditional route, research to a find a good realtor/PM combo?
Hi Dave! Thanks for the feedback. I wouldn’t say the tk frenzy is over, there are still a lot of people buying turnkeys here, the problem is that the ROIs arent as great as they were when I was buying them. I think the best option is to view listings and properties from every angle so you dont miss out on any possibly quality investment. For example, it doesnt hurt to look at all the properties available via turnkey providers as well as have a realtor on hand looking at MLS houses. Whichever one provides the best investment is where you should end up pulling the trigger.
But I do think that you could probably find a better deal doing the more traditional route as you put it. Just have to keep your eyes open and review all possibilities.
Thanks for taking the time! I actually just sent you another email inquiring about your preferred tk provider so please excuse the redundancy. Good answer and I’ll take heed. I’ll keep you posted on the trigger pulling event, hopefully soon!
Can I be part of that email as well? ?
Great article! Very informative. Im a real estate investor from California that’s looking to purchase rental properties in Indianapolis. What would you say constitutes a good deal for a 3BD 2BTH SFH in a low crime area? I just did a redfin search for properties in the Beech Grove neighborhood and they’re priced at about 65-85k. What is the typical rent in a location like this. Thank you!
Hi Chandler, thanks!! The numbers all depend on how good the neighborhood is really. You will see better COC returns in lower quality neibhorhoods from 15% and greater. Nicer neighborhoods I would get at least a 10% coc up to 15%. I do like the beech grove neighborhood and i think its great for rentals. Rents very there but for a 3/2 I would say max $1050 but most likely in the $950 area as long as its not a run down house.
Wow. your story sounds just like mine. I currently live in Austin, TX. I have a condo here. I bought two rental properties in Indy and thinking of relocating there to grow my portfolio!!!… Thanks so much for sharing your article. I’d love to get in touch with you to chat more about investing in Indianapolis. I’m constantly reading about the economic growth there as well as the real estate and job markets. Please feel free to e-mail me if you’d like to connect.
That is super cool. Sounds like you are on the same exact path I took. Honestly, now that I have been in Indy for about a year and a half I can definitely say that it was definitely the correct decision to make. My wife and I love it here and our real estate empire hasnt stopped growing!
Good luck and let me know if you decide to move out here.
I’m glad to hear that you’re loving it out there. Indy sounds like it’s a nice place to live in. I bought one more property this month and it’s undergoing some rehab. I will be there in April to acquire more properties and to visit the city. I would love to meet up and chat with you. My e-mail is fassil.tefera@gmail.com. Please drop me a note anytime so I can have your contact info for when I come out there.
Thanks
Fas
Great article, congrats on your success here in Indy!
I currently work for a property management company that services the Central Indiana A/B class areas and we certainly continue to see incredible growth.
We have over 200 investors we’re trying to find good deals for and it is a challenge right now. Properties are pending within hours of being on the MLS!
I’m very interested to see how the rest of 2019 plays out.
Best of luck and continued success!