Multifamily Investing

Why Indianapolis?

A strong and continually growing economy in Indianapolis, paired with an affordable cost of living, has put the Indiana city on investors’ radar. Job growth here only fell by 0.4% YOY, while other proximate similar Midwestern markets, such as St. Louis, Cincinnati, Cleveland and Memphis, Tennessee, for examples, all had job growth fall by more than 1%.

Average rents here are $975, despite high year-over-year rent growth of 5.5%, said Chris LeBarton, managing analyst at CoStar. “Landlords see the great recent performance here, and there’s still runway ahead of them given the current asking rents,” he explained.

LeBarton said the city offers little downside risk for investors and sales volume has remained strong throughout the pandemic. The average sales price is $95,000 per unit, which is a discount compared to markets with similar characteristics including Albuquerque, New Mexico, St. Louis, Tucson, Arizona, and Louisville, Kentucky, and average cap rates are at 6.5%.

Additional Metrics:
  • Liquidity: 28%

  • Vacancy: 7%

  • Demand: 2.9%