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Overview of Indiana
Indianapolis is ideally located and brimming with good jobs, entertainment, and friendly people. The so-called Circle City blends Big City buzz with small-town, midwestern charm. It’s also a city with incredible, cash-flowing properties and a high ceiling for expansion. Real estate forecasters praise its years of steady growth and high rental demand.
One reason the demand for homes in Indianapolis is so strong is the number of out-of-state real estate investors. A recent report from HousingWire notes that remote real estate investors are putting Indianapolis at the top of their list of markets where property remains affordable and potential cash-flow returns are higher.
Quick stats
Indiana real estate statistics
Benefits of real estate investing in Florida
When you think of booming real estate markets, Indiana might not be the first state that pops into your head. You're probably picturing Miami or maybe the tech hubs on the West Coast. But here's a little secret: as an experienced investor looking to scale, the smart money often chases stability, cash flow, and landlord-friendly rules—and Indiana offers a powerful combination of all three.
Below, you’ll find a few reasons why investing in Indiana real estate is suitable for those seeking a place to purchase properties.
A growing population
The population of Indiana is around 7 million, and according to World Population Review, the state has grown by approximately 300,000 residents since 2010. Indiana’s projected growth is approximately 660,000 residents by 2050, bringing the population to 7.27 million.
Population growth is steady in the state, which likely means home property values will continue to rise as demand increases. Population growth anywhere indicates a setting where people want to live, as newcomers bring more jobs, renters, and businesses with them, fostering a bustling, attractive setting.
Attractive market dynamics for investment
Indiana’s market is built on solid fundamentals that make the rental business predictable and profitable.
The affordability crunch that’s hitting buyers is a major plus for you as a landlord. People want to buy, but they are increasingly forced to rent, which keeps your occupancy high.
- Buying is becoming too expensive: The price of buying a home in major Indiana cities has soared—in some places, the median sales price jumped 40% in just three years. It's simply not affordable for most families anymore.
- The biggest group is choosing to rent: Households under 45 are renting over buying by a two-to-one margin, ensuring a constant and reliable pipeline of potential tenants for your properties.
- Solid long-term appreciation: These market pressures aren't temporary. Since 2020, house prices have increased by a hefty 42%. Investing here means you get reliable cash flow now and solid asset appreciation later.
High job prospects
Job growth is abundant in Indiana, which poses an advantage for those seeking new career opportunities, meaning many of them will need a new place to live.
Indiana is ahead of the curve when it comes to job growth. The market has risen by 2.5% in the last year alone, placing the state 4% higher than the national average. Indiana’s unemployment rate sits at 3.6%, 0.8% lower than the national average of 4.4%.
Benefits for Real Estate Investors: Job growth in Indiana means a stronger rental market (higher household income) and more demand for property, thus improving the value of your investment.
A compelling price-to-rent ratio
The price-to-rent ratio is a quick-and-easy way to see if an area favors buying or renting. A higher ratio means a healthier rental market, and Indiana is scoring big.
A ratio between 16 and 20 suggests renting is more sensible than buying in a given area. Nearly half of the residents in Indianapolis are renting because it's financially easier than carrying a mortgage. That's consistent, built-in demand for your properties.
With an occupancy rate of approximately 91% in Indianapolis, you’ll spend less time marketing empty units and more time focusing on growth.
Diverse economy
Indiana also provides a home for a diverse economy. Some industries vital to Indiana’s economy include healthcare, logistics and transportation, manufacturing, the public sector, and technology. There are many trusted companies in the state as well. According to IndyStar, last year’s top employers included Charles Schwab and Salesforce. However, many companies operate in the state, with the 100 largest companies including Go Electric, Anthem, Cummings, and many more.
Benefits for Real Estate Investors: A diverse economy with various sectors grants Indiana residents security, even if they lose their initial job. Real estate investors and renters alike can rely on a diverse economy that will not disrupt the rental fair market value.
High occupancy rates
A high occupancy rate signals a stable market where finding and keeping tenants is less of a challenge. Indianapolis boasts a current occupancy rate of approximately 91%, indicating a consistent and reliable market. The Fort Wayne metro area is seeing high occupancy rates and annual rent increases of 15%.
Business environment and financial advantages
Beyond the foundational market demand, Indiana provides a favorable regulatory and economic climate that supports the profitability of a rental business.
Landlord-friendly state laws
Indiana is considered a landlord-friendly state, which simplifies property management and reduces the time spent on tenant-related conflicts.
- No rent control: Localities in Indiana are explicitly prohibited from regulating rental rates, meaning landlords can charge any reasonable amount they deem appropriate. Rent increases typically require at least 30 days’ written notice for month-to-month leases.
- Eviction process: For nonpayment of rent, landlords can issue a 10-day notice to pay or quit.
- Security deposit return period: Landlords must return the tenant’s security deposit within 45 days of the lease termination. While the law does not limit the security deposit amount, it should be reasonable.
- Tip for compliance: To efficiently manage deposits and ensure compliance with state-specific interest rules, open separate, dedicated security deposit accounts for each tenant or property. Baselane allows you to create unlimited virtual checking and savings accounts for free for seamless organization and tracking.
How to find real estate investment in Indiana deals
Define your goals
- Use the SMART Goals framework (Specific, Measurable, Achievable, Realistic, Timely).
- Consider what financial returns you're looking for (monthly passive income, high appreciation, total yield, etc.).
- Have a clear cash-on-cash goal (e.g., 10% cash-on-cash return per year).
Research potential real estate markets
- Look for Indiana investment properties in areas with high potential for growth and development.
- For example, consider the job growth, home values, crime rates, population trends, and job market conditions if you're looking at real estate investing in Gary, Indiana.
- Purchasing a real estate investment property in an undervalued market with a steady population and job growth could produce an increase in home values over time, which can help maximize your returns.
- Use a rental property ROI calculator to estimate the cash flow, cap rate, and cash-on-cash return on an Indiana investment property.
Network with investors
- Search for online groups (e.g., "Indianapolis Real Estate Investing") to get recommendations from other out-of-state Indiana landlords and investors for the best cities to buy rental properties in Indiana.
- Connect with local Indiana real estate investors and attend local property auctions to find off-market deals.
- Find local real estate agents, wholesalers, and property managers with experience in the desired area and property type (e.g., single-family homes in South Bend, Indiana).
How to remotely manage Indiana rental properties
Option 1: Hire a property manager
- Find a reliable property manager in the city where your investment property is located.
- They should be familiar with the local real estate market conditions and regulations.
- Look for Indiana property managers who can take care of the day-to-day operations like maintenance, work orders, and rent collection from tenants.
Option 2: Build a local team
- Search for an Indiana real estate attorney to help navigate legal regulations and property taxes, understand the eviction process, and ensure compliance with Indiana landlord-tenant laws.
- Hire local contractors to handle your rental home's repairs, renovations, and property maintenance.
- Work with Indiana realtors to help find Indiana real estate investment opportunities.
Option 3: Use property management software
- Pair a local team with property management software to streamline the entire rental process.
- Choose software that allows Indiana tenants to pay rent online with ACH, debit, or credit cards.
Get more value from a property management platform like Baselane that offers landlord banking, integrated bookkeeping, and free rent collection at no cost.
How to find and screen tenants for remote Indiana landlords
- Post your rental property online or use a local real estate agent to find Indiana tenants quickly so you can avoid paying for a vacant unit to sit on the market.
- Screen Indiana tenants through the real estate agent or an online screening tool to check criminal records, verify employment and income, and conduct background and reference checks.
- Research Indiana landlord-tenant laws and regulations for evicting a tenant for unpaid rent or property damage.
Overview of Indiana landlord-tenant law
Landlord's rights and responsibilities in Indiana
Tenants' rights and responsibilities in Indiana
5 laws to know before investing in Indiana
To avoid legal disputes and promote a healthy landlord-tenant relationship, carefully read the following terms to understand every rental agreement's basic Indiana landlord-tenant law requirements.
- Rent payments: Rent is due at the beginning of each month unless stated otherwise in the lease. Landlords can charge any amount for rent, but must give 30 days' notice of the increase before renewing a lease. Tenants must pay rent on time or face legal disputes.
- Late fees: Landlords may charge late fees for unpaid rent, but must be reasonable and limited to compensation for maintenance costs associated with covering the rent for that unit. The late fee policy must be clearly outlined in the rental agreement.
- Grace periods: Indiana laws do not specify a grace period for late rent payments. Landlords don't have to wait several days to charge late fees for unpaid rent, and the clock starts ticking immediately for the eviction process.
- Security deposits: You can collect a security deposit from tenants in Indiana. The state has no requirements regarding the security deposit amount or the holding of these funds in a separate interest-bearing bank account. Security deposits must be returned to tenants within 45 days of moving out unless they are used to cover landlord expenses. Landlords must provide an itemized list of deductions when withholding security deposits.
- Lease termination and evictions: Tenants must give notice for termination 30-90 days before the lease ends, with the option to terminate early under certain conditions. Landlords can evict tenants for non-compliance, non-payment, or criminal activity, with varying notice periods.
How to create an Indiana rental agreement
Leases longer than three years in Indiana must be in writing, but it's recommended to use a written lease for all long-term and short-term rentals as a physical record of an agreement. Rental agreements in Indiana can be adjusted to fit new clauses or terms with 30 days' notice to the tenant.
Required information for Indiana rental agreements:
- Description of the rental property
- Contact information for landlords and tenants
- Rent cost and payment conditions
- Security deposit clauses
- Subleasing policies (if applicable)
- Utility bill payment responsibility
- Additional clauses as per the landlord or Indiana landlord-tenant law
When signing a lease, always review the landlord and renters' rights in Indiana policies to acknowledge the responsibilities and obligations of both parties entering the agreement.
Top Cities in Indiana to Invest in Real Estate
Indianapolis
Indianapolis is the largest city in Indiana, and it’s also the state’s capital. Its bustling metropolitan is home to almost one million residents, making it the 15th most populous city in the USA.
- Median Listed Home Price: $285,000
- Median Price Per Square Foot: $178
- Rental Vacancy Rate: 7.2%
- Median Rent: $1,350
- Median Household Income: $67,173
- Average Property Tax: 0.81%
- Rent-to-Price Ratio: 16.8
Fort Wayne
Fort Wayne is the second-largest city in Indiana and home to over a quarter of a million Hoosiers, making it the second most populous city in the state.
The city is in the northern region of Indiana, a mere 50 miles from the Michigan border. It is known for its abundance of healthcare-related careers.
- Median Listed Home Price: $245,000
- Median Price Per Square Foot: $162
- Rental Vacancy Rate: 7.5%
- Median Rent: $1,200
- Median Household Income: $62,000
- Average Property Tax: 0.85%
- Rent-to-Price Ratio: 17.1
Fishers
Fishers is the sixth most populous city in Indiana, with a population just shy of 100,000.
Despite its size, it is one of the fastest-growing cities, having a population of only 7,500 in 1990. A bonus of Fishers is that it’s roughly a 30-minute drive from Indianapolis.
- Median Listed Home Price: $450,000
- Median Price Per Square Foot: $215
- Rental Vacancy Rate: 6.2%
- Median Rent: $1,750
- Median Household Income: $128,000
- Average Property Tax: 0.78%
- Rent-to-Price Ratio: 16.7
Mishawaka
With a population of almost 50,000, Mishawaka touts a potent, growing, financially stable, and safe environment for its residents. It also offers residents a two-hour drive from Chicago.
- Median Listed Home Price: $235,000
- Median Price Per Square Foot: $155
- Rental Vacancy Rate: 8.1%
- Median Rent: $1,150
- Median Household Income: $58,000
- Average Property Tax: 0.92%
- Rent-to-Price Ratio: 17.8
Lafayette
Lafayette is a quaint town in Indiana with a population of approximately 73,000. It is home to the esteemed Purdue University and is close to the Illinois state border.
- Median Listed Home Price: $265,000
- Median Price Per Square Foot: $168
- Rental Vacancy Rate: 6.8%
- Median Rent: $1,300
- Median Household Income: $65,500
- Average Property Tax: 0.82%
- Rent-to-Price Ratio: 16.5
Life in Indiana
Quality of life
Indiana is known for its high quality of life, and there are many reasons for this. One of the first reasons Indiana is loved by its residents is the low cost of living. According to Forbes, Indiana is 2% below the national average for the cost of living, making it cheaper than many major cities in the United States. Compared to some of the best cities in the United States for real estate investing, Indianapolis has a lower cost of living than Atlanta, Georgia (by 13%) and Dallas, Texas (by 21%).
Education
Some of the best universities in the country are located in the state of Indiana, including the University of Notre Dame, Ball State University, Purdue University, and Ivy Tech Community College.
Sports & culture
Two of the most popular teams in sports call Indiana home.
For the NFL, the Indianapolis Colts proudly represent Indiana on the field, and as for the court, none other than the Indiana Pacers represent the state in the NBA. There are also the Men’s and Women’s NCAA Basketball Tournaments for those who enjoy college sports.
And, of course, the Indy 500 NASCAR race is perhaps the biggest event in the state.
There’s something for everyone in the state, not just sports fans.
Indianapolis is home to many cultural venues, including the Indianapolis Art Center and the Indianapolis Symphony Orchestra.
State comparison: Indiana vs. Ohio vs. Colorado
Indiana, Ohio, and Colorado are all states with attractive real estate markets. If you're deciding between Indiana and comparable states, like Colorado and Ohio, here’s a quick overview of each.
Is real estate investing in Indiana right for you?
Most people would likely agree that Indiana isn’t exactly the first state that comes to mind when people think of an exciting place to live in the United States.
Still, its proven annual stability makes the Indianapolis real estate market a reliable state for real estate investing.
Trends show that the state has a track record of improving when it comes to almost all aspects of prosperity.
Indiana is certainly worth your attention if you’re looking for a place with stability, simplicity, and charm.
FAQs
Is Indiana a good place to invest in real estate?
Yes, Indiana is highly landlord-friendly. Eviction laws are lenient, allowing eviction for nonpayment within 10 days and immediately for property damage, with no grace period for month-to-month leases. There is no rent control; while current leases cap rent, there's no limit on increases for new leases or renewals, requiring only 30 days' notice. Low property taxes (0.87% vs. the national 1.11%) further attract investors.
What are the rules for security deposits in Indiana?
You are generally free to set a reasonable security deposit amount, as there is no specific limit in state law. However, the key is what happens next. Upon the tenant moving out, you must return the deposit or provide an itemized list of deductions (for things like unpaid rent or damages beyond normal wear and tear) within 45 days. Failure to meet this 45-day deadline means you forfeit the right to deduct for damages and must return the full deposit to the tenant, plus potentially pay their attorney fees.
Do I need to hire an external property manager or accountant for Indiana properties?
While a property manager can certainly handle day-to-day maintenance and tenant calls, Indiana's landlord-friendly regulations make it easier to self-manage the financial side efficiently. You can skip the external accountant for day-to-day tasks by using an integrated property management platforms like Baselane. It automatically categorizes and tags all income and expenses by property and Schedule E tax category, reducing your monthly bookkeeping to just minutes. This cuts down on the manual reconciliation that an external bookkeeper typically charges you for, allowing you to focus your time and capital on growth rather than overhead.
