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Indianapolis Grms Very Low/desirable For Investors?

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KYLECODY

Senior Member
Joined
Apr 26, 2003
Professional Status
Certified Residential Appraiser
State
Arizona
A relation of mine just dipped their hat in the Indy housing market. She got two decent, newer(2000ish) homes (one is 2700 SF two story and the other a 1700 SF one level) that are in good condition according to the listing photos/video on you tube. Doing a little research they are not in the "rough" areas of the city. She paid roughly 100k for each. The first has been rented at $1,500 a month while the second at $1,200. That puts gross rent multipliers well below 100 and makes that area a great metro locale for investors looking to hold income properties.

Are those numbers typical for the area?

In Phoenix and the suburbs, where I live/work, GRMs are closer to 200 in most cases as a 200k home will only get $1100-$1200 in rent and obviously much less desirable to buy and hold as a rental. Any thoughts on Indy as a great investors market for buy/rent/hold?
 

Mark K

Elite Member
Joined
Jan 27, 2004
Professional Status
Certified Residential Appraiser
State
Indiana
Are those numbers typical for the area?

...

Any thoughts on Indy as a great investors market for buy/rent/hold?

Late comments but I don't check the States forums often.

GRM's in the Indy area run from about 50-150, depending mostly on the area. In the suburbs a GRM of 125-150 is common.

In the suburban/urban areas, less desirable than suburbs, 80-120 is common.

In the "less than desirable" areas, GRM of 50-75 is frequent and GRMs of 30-40 are not unusual.


As far as "buy/rent/hold"...I think you can make money as long as you self-manage. Indy real estate has seen some recent appreciation but on average, its been low for many (20+) years. Cheap and plentiful land makes is a tract builder's heaven. I can go out today and buy a new 2,000 s.f. home for $150K if I didn't mind living in a cookie-cutter, low budget construction area.

By the time you include taxes, maint, reserves, vacancy, etc. , SFRs in this area are rarely good investments due to the lack of appreciation.

I don't know where your relative bought her houses but there are some areas with newer homes where a GRM of 75 would not entice me. I used to own a lot of rentals in the suburbs; SFR, duplexes, condos, and sold them all in 06-07 just prior to the crash. Glad I bought them, even gladder I sold them.
 
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