As investors ourselves, we found a perfect opportunity to invest in cash-flow properties in Indianapolis. We wanted to stack the odds in our favor by choosing a city with many external factors in place to support our rental portfolio.
With safe, consistent cash flow in mind, our research concluded that there are several factors that needed to be in place - Indianapolis has these and more.
Indianapolis is a destination for people and for businesses. Because of their impeccable financials: AAA-debt rating, stable tax environment and balanced budgets, businesses know what to expect in Indy — “which makes them more likely to act, create jobs, and invest in Indianapolis because they can plan.” – Mayor Greg Ballard, Indiana Chamber of Commerce
Over the last decade, Indianapolis has experienced significant growth in its economic development. Advancements have been made in the manufacturing, distribution, retail, and service industries, and Indianapolis homeowners consider it the most affordable city for its size. Indianapolis has seen steady growth of employment opportunities in the last couple years from large companies including Kroger and Amazon that have greatly enriched the job market.
* The median income for a household in the city was $40,154
* The median income for a family was $48,979
* Only 9.0% of families and 11.8% of the population were below the poverty line
These characteristics support the strength of Indianapolis as an investment opportunity, since the household income is relatively high in comparison to the cost of housing and the poverty rate is relatively low. This creates an attractive environment for investment, since there is a healthy pool of potential renters with steady employment.
In the 1970s and 1980s, Indianapolis suffered at the hands of urban decay. Major revitalization of the city’s blighted areas, such as Fall Creek Place, and especially the downtown, began in the 1990s and led to an acceleration of growth on the fringes of the metropolitan area. This growth trajectory has expanded out to many high quality neighborhoods in the outskirts of the city with many newer homes and attractive affordability.
Indianapolis’s future appears bright as the city continues to invest heavily in improvement projects, such as an expansion to the Convention Center, upgrading of the I-465 beltway and an entirely new airport terminal for the Indianapolis International Airport.
Indianapolis fundamentals cater to both cash flow and long-term growth. While many markets saw dramatic increases and decreases, property values in Indianapolis have remained relatively stable over the last few years. The city has increased by 15.2% over the last decade (above the National average of 9.7%) and continues to put upward pressure on home prices and rental rates. Indiana state is currently running a budget surplus making it a very business friendly economy. The average home ownership in Indianapolis is 75% (while the national average is below 67%) – the shortage of rental properties leads to a stable rental market demand.
Indianapolis represents the type of market that we seek for our investors and for our own portfolios as well.
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