Real Estate investors from across the country are flocking towards Indiana to build rental property portfolios. The Hoosier State is a current favorite of real estate investors due to many factors. These include a strong economy, affordable prices and great vacation destinations! Easy Street Capital is proud to be a leading provider of loans for rental properties in Indiana!
Types of Loans for Indiana Real Estate Investors
When it comes to real estate investing in Indiana, there are many markets and types of rental loans to choose from. For investors that like to get their hands dirty, rehabbing run down properties, hard money renovation loans are a perfect choice! These loans allow you to buy a property quickly and finance your rehab costs as well! Once you are done, you can either “flip” the property for a quick return or pursue the BRRRR Strategy by renting it out (either on long-term leases or short stays) and then refinancing into a long-term, low-rate DSCR loan!
Long-term DSCR Loans are also great for investing in rental properties. Specifically for properties that are rent-ready and require no renovations. Move-in ready single family homes or multi-unit properties are great for cash flow and price appreciation. Most DSCR Loans are fixed rate for thirty years, locking you into a fixed interest rate for the long-term. DSCR loans are typically for properties up to four units, but some lenders like Easy Street Capital will provide these loans on multifamily properties up to 10 Units! If historical patterns continue, rents and appreciation increase steadily each year, providing great returns. Especially for investors that use rental loans. These can lock in your debt service costs the same for 30 years, while your rents can increase.
One of the favorite metrics of real estate investors to spot profitable markets is the Rent-To-Income Ratio. The Rent-To-Income ratio measures a city’s average market rent against its median household income. The higher the Rent-To-Income ratio, the harder it is for renters to afford the prevailing rents in the city. Conversely, if the Rent-To-Income ratio of a market is lower than average, it means there is a large pool of potential renters for investment properties. Additionally, if the city is growing, it means that rents have room to increase significantly, meaning more cash flow and profits for landlords that lock in their debt payment costs for long-term periods by using DSCR Loans.
Where To Invest In Real Estate In Indiana
Indiana is a favorite market for real estate investment properties for multiple reasons. There are lots of varying markets that offer great potential for each type of real estate investor. Indianapolis is the capital and largest city in the state. Fort Wayne is the second largest city with over 250,000 residents and also includes affordable property prices. Evansville is a growing market in the southwestern region of the state and a surprisingly good market for vacation rentals. South Bend is home to Notre Dame University and has over 100,000 residents. Finally, Bloomington is a college town and home to the state’s flagship university, the University of Indiana.
Indiana is a leading state for savvy investors searching for the best Rent-To-Income ratios. According to FastExpert, Indiana boasts a variety of markets for investors looking for high-return opportunities in 2024. These are larger markets too, including Evansville and Fort Wayne!
Indianapolis
Indianapolis is the capital and largest city of Indiana, with a population of over 800,000 people. The city has a diversified economy with a strong focus on healthcare, finance, and manufacturing. Several Fortune 500 companies, including Anthem, Eli Lilly and Company, and Cummins, provide employment for renters.
Indianapolis’ growing population creates a steady demand for rental properties. The city’s cultural heritage and arts scene, including the Indianapolis Museum of Art, the Indianapolis Zoo, and the Indiana Repertory Theatre, attract visitors. It’s a popular destination for sports enthusiasts, with teams such as the Indianapolis Colts and the Indiana Pacers. Short-term rentals serve visitors for gamedays.
Overall, Indianapolis’ strong economy and diverse attractions make it a great market for real estate investors. Long-term and short-term rental investors alike are likely to find opportunities in the Crossroads of America.
Fort Wayne
Fort Wayne, located in northeastern Indiana, has a population of over 265,000, making it the second-largest city in the state. The city’s economy is diversified, with significant contributions from healthcare, education, and manufacturing sectors.
Real estate investors can find affordable investment opportunities in Fort Wayne, with the median sales price for a single-family home at $190,000 as of January 2024, according to Redfin. In addition, the city’s Rent-To-Income Ratio of just 24% is lower than the national average, making it a strong market for long-term rental properties. Fort Wayne also has several cultural attractions, such as the Fort Wayne Museum of Art and the Embassy Theatre.
Fort Wayne’s healthcare sector is a significant contributor to its economy, with several large hospitals and medical centers in the area. This creates a steady demand for housing among travel nurses who need temporary accommodations for their assignments. Fort Wayne’s location near major highways and transportation hubs makes it a convenient location for travel nurses who work in the region.
Medium-term rentals, typically rented for periods of several months up to a year, are a great investment strategy for travel nurses in Fort Wayne. These rentals can provide consistent and reliable cash flow for real estate investors. In addition, travel nurses tend to be responsible tenants with stable incomes and good credit, making them low-risk tenants for landlords.
Evansville
Evansville is a thriving city in southwestern Indiana with a population of over 118,000. The city boasts a diverse economy with significant contributions from healthcare, manufacturing, and education sectors. Evansville’s low unemployment rates compared to the national average make it an attractive market for long-term rental properties, with opportunities for medium-term rentals and short-term rentals as well.
Evansville is also a popular tourist destination, with attractions such as the Evansville Museum of Arts, History & Science, the Mesker Park Zoo & Botanic Garden, and the Angel Mounds State Historic Site. The city is also home to several festivals and events throughout the year, including the Evansville BBQ Festival and the West Side Nut Club Fall Festival. This provides a robust market for short-term rentals serving visitors for various events and attractions.
AirDNA, a leading data analytics firm for short term rental investors, gave Evansville’s growing market an overall Market Score of 95/100 and an investability score of 83/100, both top marks in their methodology. Per AirDNA, the city currently has a great ratio of average revenue ($27,000) versus typical home value ($178,900) as of February 2024. For investors that utilize low down payments through financing options such as DSCR Loans, the cash-on-cash returns can be very high versus other markets!
With its combination of great Rent-To-Income Ratios, affordable property values and sky-high short term rental metrics, Evansville is a rare top market for all types of real estate investors!
South Bend
South Bend is a rapidly growing city located in northern Indiana, home to the University of Notre Dame, with a population of over 100,000. The city’s economy is diversified, with significant contributions from healthcare, education, and manufacturing sectors. Real estate investors can find affordable investment opportunities in South Bend, with the median sales price for a single-family home at $180,000 as of February 2024, according to Redfin. With relatively cheap housing and a population with strong incomes, South Bend is a strong market for long-term rental properties.
South Bend is also a great market for investors specializing in niche strategies, such as short-term rentals or student housing. The University of Notre Dame boasts an enrollment of over 12,000 students. This provides a steady stream of renters. Investment properties aimed at students can provide very lucrative returns if done correctly. Properties located near campus and rented to reliable students can earn returns well beyond normal long-term rentals.
The city is home to several cultural attractions. These include the Morris Performing Arts Center and the South Bend Museum of Art. In addition, South Bend is a great market for short-term rental investors. The University of Notre Dame Fighting Irish are typically a strong team in football, basketball, and other sports. This attracts many visitors for games throughout their respective seasons. The city also hosts a variety of events such as the St. Patrick’s Day Parade, the Riverlights Music Festival, and the Art Beat Festival. These provide year-round demand drivers outside of sports.
AirDNA also includes South Bend on its list of best places to invest in 2024 for short term rentals. It sees very low regulatory risk which helped boost its rating. Despite typical home values below the national averages, South Bend features an Average Daily Rate of $433.1 and annual average revenue projections of $62,500. This leads to an “investability” score of 100/100, one of the highest in the country. Professional short term rental investors can earn high returns in South Bend through STRs.
Overall, South Bend’s diverse attractions, growing population, and strong economy make it an attractive market for real estate investors. Especially for those looking to specialize in student housing or short-term rentals. With the University of Notre Dame located in the city, investors can find unique opportunities for student housing rentals, and capitalize on the steady stream of visitors that come to the city for university-related events.
Bloomington
Bloomington, Indiana is home to Indiana University, the flagship university of the state. But it’s not just a college town. Bloomington has a population of over 85,000, making it the seventh-largest city in the state. It’s also home to several cultural attractions, including the Indiana University Art Museum and the Eskenazi Museum of Art.
Bloomington is a great market for real estate investors who specialize in niche strategies, such as short-term rentals or student housing. Indiana University, home of the “Hoosiers,” boasts an enrollment of over 40,000 students. While investment properties aimed at students can be a risky strategy, if done right, they can provide very lucrative returns. Savvy investors select properties well-located near campus and that rent to reliable students. Student housing rentals can earn returns well beyond normal long-term rentals.
Bloomington is also an underrated favorite among short-term rental investors looking to capitalize on specific events that draw in visitors. Indiana University Hoosiers are typically a strong team in basketball attract lots of visitors for games. In addition, the city hosts a variety of events such as the Lotus World Music & Arts Festival, the Fourth Street Festival of Arts and Crafts, and the Indiana University Writers’ Conference. This provides year-round demand drivers outside of sports.
Overall, Bloomington’s diverse attractions and growing population make it an attractive market for real estate investors. Especially those looking to specialize in student housing or short-term rentals.
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Ready to invest in real estate in Indiana? Easy Street Capital is Indiana’s best provider of investment property loans for both hard money rehabs and long-term rental properties.
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