Indianapolis Ranked Among Best Cities in the Region for Rental Real Estate Investment
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Ryan Carrell A recently released report by All Property Management, the largest network of property management services on the Internet, has placed Indianapolis as the No. 2 city in the Midwest for rental real estate investment and No. 6 in the United States.
The All Property Management Q2 2014 Rental Ranking Report researches a number of different sources, including current government housing and jobs data, as well as housing appreciation forecasts for 75 Metropolitan Statistical Areas across the United States, to determine the cities that are best poised to give investors the highest rate of return on their rental investment. Specific factors such as home vacancy rates, capitalization rates, home value appreciation rates, annual job growth, variance in rental rates, and the average number of days a property stays on the market are looked at in the report.
While Indianapolis does not lead the region in any one particular category, a strong showing in many of these input values gave the city the strength it needed to jump a whopping thirteen spots up from No. 19 last quarter to No. 6 in the United States and to No. 2 in the Midwest for Q2 2014. Indianapolis’ greatest strength in the study was its capitalization rate of 9.2%. This capitalization rate, which compares the average property value to average rent to determine how profitable a rental can be, would give the city a ranking of No. 13 in the country for this particular variable. Home value appreciation of 5.35%, job growth of 1.97%, and a 1.85% increase in rental rates are a few other positives for Indianapolis in the study.
According to the Ranking Report, the Indianapolis real estate market is also quite active; homes are only sitting on the market for approximately 61 days prior to being purchased. This ranks the city No. 16 for “Average Days on Market” among the 75 Metropolitan Statistical Areas studied. For comparison purposes, Denver was the leader in this category with an “Average Days on Market” value of 25 days.
What does this mean for investors? Increases in year-over-year rental rates, positive job growth, overall appreciation of home values, and strong capitalization rates makes Indianapolis an excellent city for rental real estate investment. If you’ve been thinking about making the leap into rental real estate ownership, there has never been a better time to consider your options. And, with Indianapolis ranked among the top cities in the Midwest for rental real estate investment, the market is poised to give you attractive returns on your investment.
We hope you find this quarter’s Rental Ranking Report to give you the insight you need to make informed decisions regarding your next Indianapolis investment property.
