Buying & Selling Real Estate Discussion

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Justin Dao
  • Investor
  • Santa Barbara, CA
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2% property tax in Indianapolis eating cash flow?

Justin Dao
  • Investor
  • Santa Barbara, CA
Posted Sep 25 2019, 15:54

Hey all,

I’ve been looking into purchasing a few properties in Indianapolis, however I haven’t had much luck lately finding cash flowing deals. I’ve heard that in Indianapolis, property tax is 1% for owner occupied and 2% for investment properties, and that difference could be up to $100/mo. It seems like deals that meet the ballpark “1% rule” cash flow negatively, or are extremely thin deals because of this.

Has anyone had any similar experiences they'd like to share? Am I being too conservative with the expense calculations? I assume 10% of rent goes to repairs and maintenance, 5% goes to CapEx, 8% due to vacancy, and 10% to property management. The rest is utilities, insurance, etc.

What do you think?

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