Despite slow employment growth and a lagging economy throughout 2012, the multifamily market in the state of Indiana continues to thrive. It lands at #8 on the list of the top 10 fastest growing rental markets by state, according to REALTOR® magazine, the official magazine of the National Association of Realtors.
According to a report produced annually by Tikijian Associates, Indiana-based multi-housing investment advisors, the same economic factors that have positively affected the market for the past few years continue to add to its strength. These include high credit standards deterring would-be buyers from purchasing, strong growth in under-30 and Hispanic markets, a movement to renting as a lifestyle, and demand that has continued to outpace supply. The result is a statewide occupancy rate by mid-2012 of 95.3%.
Indianapolis Rental Market
Downtown Indianapolis at night (Flickr/indywriter)
With a population of just over 820,000, Indianapolis has seen population growth of approximately 6.6% from 2000 to 2012. The percentage of renter-occupied households is right at 36.7%, with a median rent of $716. These rates are 10.5% greater than the overall average in Indiana.
The total number of properties in the Indianapolis metropolitan area add up to 628, with a total of 133,800 units. The average rent in 2012 was $703, with an overall rent growth of 2.2%. The downtown area continues to see the greatest amount of growth, with a 1.3% increase in a single calendar year. The average occupancy rate was 91.7%, while the median occupancy rate came in a bit higher at 95%.
Kokomo Rental Market
Downtown Kokomo, Indiana (Wikimedia Commons)
This quaint little town is home to only 45,468, yet its consistent ranking as one of the most livable cities in the state of Indiana make it a favorite of investors and managers alike, especially with 35.3% renter-occupied households. In Kokomo, the total number of multifamily properties is 21, with 3,018 units. The average rent is $553, rent growth is at 2.8%, and the average rent per square foot is $0.65. The reason this area is such a top performer, however, is its occupancy rate, which increased from 92.9% to 94.7% in one year. This is most likely to do with the increase in auto sales and resulting boost in employment at the Chrysler plants located here.
Lafayette and West Lafayette Rental Market
West Lafayette, Indiana, home of Purdue University (Flickr/English106)
West Lafayette is a multi-family investor’s paradise, where 62.0% of the population are renters. Lafayette is not quite as high, but with 41.5%, there’s still plenty of opportunity to be had. In terms of market rent growth, the municipalities of Lafayette and West Lafayette are the top performers in the state. With an average rent of $738 and an average rent per sqft of $0.84, it saw a market rent growth of 4.1% in 2012. The area boasts 64 properties with a total of 10,772 units and an occupancy rate of 93.1%.
Also Making the List…
A promising economy in addition to a market that seems to be rebounding well after the recession is giving investors and property managers plenty of hope in the Indiana rental market. If you have yet to make your move on an investment, however, there are other states that may tickle your fancy as well. Texas, North Dakota, Washington, Minnesota, California, Utah, Oregon, Tennessee, and West Virginia also made the list of the top ten states with the fastest growing rental markets.Read more on Real Estate Markets