Exploring One of the Top US Real Estate Markets
Indianapolis, IN was recently ranked#1 by Inman News as the top market for Real Estate Investors. This may have been news to some, but Indianapolis is not new to the investment world. The Wall Street Journal also ranked Indianapolis very high, coming in at #3 in a similar article, and Forbes placed Indianapolis in their top 5 investment markets. Still, Indianapolis is flying under the radar when it comes to investing. This in itself is a good reason to look to this market. As droves of investors are speculating in areas hardest hit by the housing bubble, causing competition, Indianapolis inventory is still fairly inexpensive when compared side by side to markets in the southeast and the southwest. In addition, we did not see the huge increases in property value during the bubble, and therefore, when the bottom did drop out Indianapolis was not nearly as affected.
Indianapolis is the 12th largest city in the US by population. In addition to this Indiana as a whole has the 6th lowest cost of living in the Union. Indianapolis itself is ranked #7 in the top 10 metro cities for economic growth potential, and is ranked #8 in the top 10 metro cities with the best cost of living. In addition to all of this CNBC ranked Indianapolis in its top 10 Best Place to Move in America in October of 2010.
Rankings are one thing, but for an investor returns are the primary concern. For short term speculative investments there are definitely other markets that show much higher potential for return, but with that comes much greater risk. For a conservative investor who is interested in making steady returns over time Indianapolis has to be considered. With the cost of acquisition as low as $35,000 for a rehabbed and tenanted single family home that is cash positive from day one an investor can afford to spread the risk of their investment over several assets further lowering the impact of vacancy and at the same time increasing their returns. With financing as affordable as it is right now a rate of return can easily exceed 18% after all expenses have been accounted for. Cash purchases right now on investment property are returning 12% on average after accounting for vacancy, maintenance, taxes, insurance, and management fees. These numbers have to be looked at, and when they are compared side by side with some of the hottest investment markets the numbers tell the story. Investing in Indianapolis can be a very profitable move. This represents a completely hands free investment with management in place, lifting the burden of checking stock prices and indexes. As market volatility continues to wreak havoc on the psyche of investors everywhere tenanted, managed, cash positive real estate investments are becoming more and more of an option to all investors interested in the prospect of steady returns and with very little time to devote to monitoring their investment on a daily basis.
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