25 Indiana cities ranked by estimated cap rate. The average cap rate across Indiana markets is 4.0%, with median home prices averaging $230K and rents averaging $1,124/mo. South Bend leads with a 5.3% cap rate at a $225K median price. Property taxes average 0.84% across Indiana markets.
Indiana offers 25 investable rental markets tracked by CapRateCity. The state average cap rate of 4.0% is above the 3.81% national average, making Indiana an attractive state for cash flow investors. No cities pass the 1% rule at median prices, so value-add strategies are essential.
Prices and rents: Indiana home prices average $230K, which is 31% below the national average of $333K. Rents average $1,124/mo. The most affordable entry point is Marion at $145K, while South Bend offers the highest cap rate at 5.3%.
Taxes and costs: Property taxes average 0.84% across Indiana, below the 1.08% national average — a meaningful cash flow advantage that adds roughly $552 per year to NOI on an average-priced property. Carmel has the lowest rate at 0.82%.Vacancy averages 5.5%, tighter than the national average — favorable for landlords.
Growth outlook: Population growth across Indiana averages 0.91% per year, led by Fishers at 2.2%. Home values are appreciating at 2.6% annually on average. Moderate growth provides a stable demand foundation.
Bottom line: Indiana is primarily an appreciation market. Cash flow investing requires below-median purchases or value-add strategies. Consider whether the growth and appreciation potential justifies tighter margins.