Thinking About Investing In A Single-Family Rental Home? #InvestInIndy.
Updated: Jun 5, 2019
When deciding to purchase a single-family home rental property, the location is probably even more important than the home itself. Finding an area with a thriving economy should be one of your first considerations when venturing into the world of rental investments.
The market you invest in will determine the demand for single-family rentals, the rental expenses you will incur, and your potential rental income. Luckily for you, we're experts on one of the best locations to establish a high return on your rental investment - Indianapolis!
Indianapolis Is Consistently Voted One Of The Best Places To Live In The U.S.
Indianapolis is frequently included as one of the top places to live in the U.S. Fishers, Indiana, is just 16 miles from Indianapolis city center and was voted number 1 place to live in 2017, according to Money magazine. This is partly due to a predicted 11.6 percent job growth projected by 2021!
Located a 15-minute drive east of Fishers, is Carmel. Carmel was named the best place to live in the entire United States in 2018 according to data company Niche - for the second time!
The decision was made based on "several key factors of a location, including the quality of local schools, crime rates, housing trends, employment statistics, and access to amenities in an attempt to measure the overall quality of an area."
So why is this important for real estate investors to know? Because a desirable area to live makes for a great rental market. With an increased pool of potential tenants, landlords can ensure high occupancy rates and optimal rental income. A robust local economy is one of the best ways an investor can ensure positive cash-flow for their investment properties - which leads us on to our next point.
Indianapolis Is Experiencing Strong Economic Growth
Accordingly to the Indiana Business Review, the Indianapolis-Carmel-Anderson metropolitan area economy, "is poised for another year of strong growth and conditions that will benefit many in the area." Cementing its status as one of the top convention cities in the U.S., Indianapolis is also adding a 235,000 square foot expansion of the Indiana Convention Center.
As well as significant investment, Indianapolis has also seen an increase of 2.1 percent in the local job market over the last 12 months. Combined with an unemployment rate that is .4% under the national average, investors can have confidence that Indianapolis' economy is thriving.
Why is this an important consideration for investors? Because a robust local economy attracts a workforce with housing needs.
Disposable Income Spending Power Is Increasing In Indianapolis
A recent study named "Downtown Indianapolis Retail Spending Power," released by the Indy Chamber, highlights continuous growth for retailers in downtown Indianapolis. The study was conducted by Chicago-based real estate research firm Hunden Strategic Partners and highlights include total retail spending power increasing by $200 million since 2000 — and it's only getting stronger, with that number projected to rise by a further $150 million by 2024.
According to Inside Indiana Business, "The study estimates that the average daily number of residents, visitors, and employees in downtown Indy has risen to nearly 240,000 and about half of that increase comes from residential growth."
This is a hugely important factor for real estate investors to consider. A local economy that is growing requires residential properties to house the influx of people looking to live, work, and play there.
And we saved the best reason for last.
Indianapolis was Recently Voted No.1 in Residential Real Estate Investment!
Compound has just released its first quarter 2019 Residential Real Estate Rankings report — and Indianapolis is ranked as the number one city in the entire U.S. when it comes to investing in residential real estate.
Utilizing the Sharpe ratio — a method which helps investors to understand the return of an investment compared to its risk — Indianapolis real estate investment prices appreciated 12%, year over year. This makes Indianapolis the best performing city in the U.S. for residential investment properties - a whole 4% higher than the second city on the list - Cincinnati.
Also, did you know that renter's in Indiana can deduct rent paid up to the sum of $3000 for tax purposes? This makes Indianapolis one of the best places to live as a renter — and one of the best places to own residential rental properties!
Are You Thinking About Investing In A Single-Family Rental?
Adding single-family rental homes to your investment portfolio can be a lucrative way to quickly scale and diversify your investments — especially if you invest in an area that is in high-demand with renters.
If you're considering adding rental property to your portfolio, it's crucial that you learn about the real estate market you plan to invest in. If you would like advice or have any questions about the Indianapolis real estate market, please contact us — we would love to help. Alternatively, head over to our podcast for more useful tips and information.
All information and materials in this article are for educational purposes only. Opinions expressed in this article are based on information considered reliable, but The Daily Money Show cannot guarantee the accuracy of the information nor should it be relied upon. The information discussed in this article should not be used as a recommendation to buy or sell securities nor should it be taken as investment advice. The Daily Money Show is not a Registered Investment Advisor or Broker Dealer. The Daily Money Show is not an accounting firm and does not give tax advice regarding any security or real estate transaction. You may want to consult with an accountant, attorney, real estate agent or financial advisor before proceeding with any transaction regarding securities or real estate.