A seller’s market typically serves as a disadvantage to real estate buyers. While it’s definitely feasible for investors to purchase rental properties in a seller’s market, doing so in a buyer’s market is more favorable. However, some seller’s markets are still conducive to buyers due to their affordability. What are some of the affordable seller’s markets in 2019? Arguably the best market that fits this mold is the Indianapolis housing market. The Indianapolis housing market is a seller’s market, according to Zillow, but it is also one of the most affordable real estate markets. Want to know why and where to invest in the market? Keep reading to find out!
Related: The 2019 US Housing Market: A Seller’s Market or Buyer’s Market?
Indianapolis Housing Market: City-Level Data
Let’s start with some essential basics: How is the Indianapolis housing market performing in 2019? The Indianapolis real estate market is one of the top locations when looking at Midwest real estate. Here are the market’s stats, according to Mashvisor’s rental property calculator, which you can learn about by clicking here:
Pricing
- Median Property Price: $223,182
- Price per Square Foot: $102
- Price-to-Rent Ratio: 16
Traditional Investing
- Rental Income: $1,158
- Cap Rate / Cash on Cash Return: 2.2%
Airbnb Investing
- Rental Income: $2,182
- Cap Rate / Cash on Cash Return: 5.4%
- Airbnb Occupancy Rate: 49.6%
Why You Should Invest in the Indianapolis Housing Market
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Affordability
As seen from Mashvisor’s investment data, there are many highlights of the Indianapolis housing market, and chief among them is affordability. The median Indianapolis investment property price is $223,182, according to the data. This is lower than the state median of $235,769, according to Mashvisor, and it’s much lower than the national median of $342,000.
Indianapolis investment properties aren’t the only things that are inexpensive in the city. The city’s overall cost of living is the 27th lowest in the US. Indianapolis is by far one of the most affordable real estate markets, both for investment properties and the tenants attracted to them.
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Profitability
Indianapolis investment properties exhibit the perfect balance for rental properties: they are affordable and profitable. As highlighted in Mashvisor’s data, the traditional rental income and return on investment for the typical Indianapolis real estate investment is high. The same holds true for Airbnb Indianapolis rental properties. They are even more money-making than their traditional counterparts.
Rental income is always the go-to form of profitability when investing in rental properties, but the Indianapolis housing market benefits from another form of profitability: appreciation. According to NeighborhoodScout, the Indianapolis real estate market is in the top 30 percent in national appreciation. During the last 12 months, the market appreciated by 9.28%. This is higher than 88 percent of other cities in the nation and 90 percent of cities and towns in the state.
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Traditional Investing
Indianapolis is extremely well-suited for traditional investment properties. The city is consistently ranked as one of the best cities to live in and one of the best cities to raise a family in the US. Indianapolis is the most populous city in Indiana and the 34th most populous metropolitan area in the country. This high population increases demand for an Indianapolis investment property. This is most evident in the fact that 47 percent of the city’s residents are renting out Indianapolis investment properties.
The Indianapolis housing market also benefits from its economy. Indianapolis has an unemployment rate of 3.5 percent, which is lower than the state and national rates of 3.6 percent and 3.9 percent, respectively. The city experienced a job growth of 2.5 percent over the last year, which trumps the national rate of 1.6 percent. Future job growth is also positive in the city, with an expected 37.5 percent in the next 10 years, well above the US average of 33.5 percent.
Related: Traditional Rental Strategy: Best Cities for Rental Income 2019
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Airbnb Investing
Airbnb Indianapolis has been nothing short of a success as of late. In 2017, it was the #1 trending Airbnb city. Aside from the city’s overall tourism growth, Airbnb Indianapolis boasted some impressive figures. About 73,000 guests visited the city through Airbnb during 2017, generating over $8.4 million in Airbnb host income. This growth is expected to continue as we continue into 2019.
Is Airbnb Legal in Indianapolis?
The Indianapolis housing market has seen the rise of its Airbnb market, but an important question needs to be answered: Is Airbnb legal in Indianapolis? The answer, fortunately, is yes. Airbnb Indianapolis hosts are required to obtain a permit with a $150 fee. Starting July 1st, Airbnb will begin remitting taxes, such as a 7 percent hotel tax, across the state. Hosts who rent rooms of a unit for fewer than 15 days are exempt from the tax. To learn more about Airbnb Indianapolis regulations, read this!
Best Neighborhoods in Indianapolis: Traditional Investing
Now, let’s talk about where to invest in real estate in the Indianapolis housing market. According to Mashvisor, the best neighborhoods to invest in traditional, long term rentals are Snacks-Guion Creek, Delaware Trail, and Southdale.
Snacks-Guion Creek
Pricing
- Median Property Price: $146,524
- Price per Square Foot: $85
- Price-to-Rent Ratio: 10
Traditional Investing
- Rental Income: $1,261
- Cap Rate / Cash on Cash Return: 4.4%
Delaware Trail
Pricing
- Median Property Price: $330,932
- Price per Square Foot: $112
- Price-to-Rent Ratio: 16
Traditional Investing
- Rental Income: $1,727
- Cap Rate / Cash on Cash Return: 3.2%
Southdale
Pricing
- Median Property Price: $176,033
- Price per Square Foot: $97
- Price-to-Rent Ratio: 12
Traditional Investing
- Rental Income: $1,273
- Cap Rate / Cash on Cash Return: 2.8%
Related: Real Estate Heat Map: A Revolutionary Tool for Neighborhood Analysis
Best Neighborhoods in Indianapolis: Airbnb Investing
What about Airbnb investing? According to Mashvisor, the best locations in the Indianapolis housing market for Airbnb are West Indianapolis, Fountain Square, and Near Southside.
West Indianapolis
Pricing
- Median Property Price: $63,699
- Price per Square Foot: $49
- Price-to-Rent Ratio: 9
Airbnb Investing
- Rental Income: $1,833
- Cap Rate / Cash on Cash Return: 15.0%
- Airbnb Occupancy Rate: 57%
Fountain Square
Pricing
- Median Property Price: $239,901
- Price per Square Foot: $119
- Price-to-Rent Ratio: 25
Airbnb Investing
- Rental Income: $2,453
- Cap Rate / Cash on Cash Return: 7.3%
- Airbnb Occupancy Rate: 59.4%
Near Southside
Pricing
- Median Property Price: $115,532
- Price per Square Foot: $84
- Price-to-Rent Ratio: 13
Airbnb Investing
- Rental Income: $1,623
- Cap Rate / Cash on Cash Return: 8.8%
- Airbnb Occupancy Rate: 44.7%
All in all, the Indianapolis housing market is a rising, affordable, and profitable market if you’re looking to invest in Midwest real estate. Want to start looking for Indianapolis houses for sale? Then click here to start your 14-day free trial with Mashvisor!