Big enough to offer all the choices and amenities one expects of a large city, yet small enough to make getting around manageable, the city of Indianapolis, the City of Statues, continues to be popular with residents of all types. Not only does it have the third-best downtown in America, according to Livability.com, but USA Today also ranks it as the winningest sports city in North America.
Q2 2015 Indianapolis Rental Market Update
In Q2 2015, Indianapolis was the fourth-best rental market in the Midwest and 30th-best in the country as a whole. Since Q1 2015, Indianapolis fell two spots in the Rental Ranking Report's regional rankings for the Midwestern U.S. and 12 spots in the national rankings.
Several key real estate statistics paint an unflattering picture of the Indianapolis rental real estate market. The Indianapolis vacancy rate was an astonishing 11.20 percent in Q2 2015, the seventh-highest vacancy rate in the country and 67 percent greater than the national average during that time period. Annual rental price appreciation, always an important metric for rental property investors to consider, was just 0.74 percent in Q2 2015 (85 percent less than the national average). Local property values are appreciating at a much faster rate - 3.74 percent year-over-year in Q2 2015 - but are still insignificant when compared to the national average for that metric during that period.
Regardless, Indianapolis rental real estate can still be a lucrative investment. The capitalization rate, a metric that compares annual rents to property values that is commonly used by investors to gauge the attractiveness of rental properties, was a whopping 8.75 percent for Indianapolis rentals in Q2 2015. This was the seventh-highest "cap rate" in the country and 28 percent higher than the national average during that period. This, combined with Indianapolis's moderately high annual job growth rate (2.36 percent) and roughly average median age of housing inventory (67 days), indicates that demand for Indianapolis housing is high enough that investors can generate quite good returns there.
Q1 2015 Indianapolis Rental Market Update
All Property Management found in its Q1 2015 Rental Ranking Report that Indianapolis is the second-best city for rental real estate investment in the Midwest. It's also the 18th-best rental market in the country out of the 75 markets we track, on the strength of its solid rental yields and a relatively low cost of living.
Indianapolis benefits from being the Indiana state capital, which equates to a good deal of economic stability, as state governments rarely engage in mass layoffs. This is reflected in its solid showing in the job growth category, with 2.97 percent employment growth in the city - 22nd-best out of 75 markets. While Indianapolis posts respectable rental market statistics across the board, it's a leader in cap rates, or the rate of rental return per dollar of home value. Its cap rate of 8.98 percent is the 9th best in the nation and shows that property owners can expect a nice rate of return on their rental properties there.
What data is this Rental Ranking Report based on?
To calculate the statistics found in the Q2 2015 Rental Ranking Report, All Property Management gathered data, including the most recent government housing and jobs data, for 75 metros across the United States. Specifically, we looked at home vacancy, capitalization, home value appreciation and job growth rates, changes in rental prices, and the average number of days properties have been on the market to determine which U.S. metros will give investors the highest returns on rental investments. Click here to learn more about the Rental Ranking metrics.
Should I invest in Indianapolis rental property?
Quite simply, there has never been a better time to invest in rental real estate in the Indianapolis metropolitan area. The combination of an excellent capitalization rate and a growing local economy indicates that investment properties in Indianapolis are promising indeed.
Thinking about renting out a property in Indianapolis? Save time, avoid hassle and maximize your rental income by having a professional property management company operate your rental property for you. Click here to get a free quote from a local property manager or call 877-780-4510 to have the All Property Management staff get quotes for you.
All Property Management specializes in connecting rental property owners with professional property managers in communities across the United States. These property managers help set rental rates, advertise properties, screen and manage tenants, collect rent, manage vendor relationships and ensure compliance with local, state and federal housing regulations. They take the hassle and worry out of managing rental properties - all while maximizing rental property owners' rental incomes.