Indianapolis Area Closing Costs, Insurance, and Vacancy

Indianapolis, Indiana
General Real Estate Investing
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Indianapolis Area Closing Costs, Insurance, and Vacancy

Matthew Bonaski
Rental Property Investor · Member since 2025 · 28 posts · 14 votes

Hello all,

I'm hoping I can get some input from Indianapolis investors, agents, or lenders. 

I built a rental property calculator to help me analyze deals and have been running numbers. I sent an analysis to my agent using these values:

A. ACQUISITION COSTS
--------------------------------------------------
Purchase Price: $180,000
Down Payment: 25%
Closing Costs: $6,300
Closing Costs (%): 3.5%
Rehab/Repair Costs: $2,000

E. MONTHLY OPERATING EXPENSES
--------------------------------------------------
Insurance: $175
HOA: $0
Utilities (Landlord-paid): $0
Maintenance/Repairs: $200
Vacancy Rate: 7%
CapEx: 5%
Management Fee Type: Percentage of Monthly Rent Per Door
Management Fee: 10%

I want to be conservative in my underwriting. I hear it all the time on the podcast. 

I am looking for a duplex, about 200-350k. Am I being too conservative with my closing cost, insurance, and vacancy rates? He was advising I should use the following instead:

Closing: 1.5% - 1.75%

Vacancy: 5%

Thanks for your input!

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Josh C.Pro Member
Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
8mo

@Matthew Bonaski

I would say your closing costs are too high. You’ll get a property tax credit which would be around $4,000 depending on when you close. You’ll get a rent credit if occupied. Closing costs are usually split. I’d think you’d pay have that or less if closing fees.

I also thought your insurance was too high. Should be around $100 for a 250k duplex.

Indy is a great market. We are flat fee property management if you ever need anything or have questions. CityPlaceIndy

Good luck!

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  • Josh C.Pro Member
    Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
    8mo

    @Matthew Bonaski

    I would say your closing costs are too high. You’ll get a property tax credit which would be around $4,000 depending on when you close. You’ll get a rent credit if occupied. Closing costs are usually split. I’d think you’d pay have that or less if closing fees.

    I also thought your insurance was too high. Should be around $100 for a 250k duplex.

    Indy is a great market. We are flat fee property management if you ever need anything or have questions. CityPlaceIndy

    Good luck!

    1Reply
    • Matthew Bonaski
      OP
      Rental Property Investor · Member since 2025 · 28 posts · 14 votes
      8mo
      Quote from @Josh C.:

      @Matthew Bonaski

      I would say your closing costs are too high. You’ll get a property tax credit which would be around $4,000 depending on when you close. You’ll get a rent credit if occupied. Closing costs are usually split. I’d think you’d pay have that or less if closing fees.

      I also thought your insurance was too high. Should be around $100 for a 250k duplex.

      Indy is a great market. We are flat fee property management if you ever need anything or have questions. CityPlaceIndy

      Good luck!

       Thanks, @Josh C. I checked out your site and got some FAQs from Keith. I like the model you have for owners. I will most likely set up some time for a phone call to ask more questions. 

      0Reply
  • Frank PyleBusiness Member
    Specialist · USA · Member since 2024 · 279 posts · 130 votes
    8mo

    I work with a lot of out of state folks buying long term rentals around Indy and I do not think your numbers are crazy conservative. Closing costs here can look like 1.5 to 1.75 percent if you are talking strictly lender and title fees, but once you add prepaids and escrows it is really easy to land closer to 2.5 to 3.5 percent depending on taxes and insurance timing. Insurance at 175 a month could be right for a duplex, but I would want to sanity check the replacement cost, deductible, and liability since some carriers have been jumping. Vacancy at 7 percent is fine if you want cushion, 5 percent is doable in solid pockets but duplex turns can bite you if one side goes down at the wrong time. If you tell me the zip code, expected rents per side, and whether you are using property management, I can help you tighten the assumptions without getting too aggressive. What neighborhood are you targeting and what rent are you underwriting on each unit?

    [email protected]317-501-3467
    Frank Pyle at ExP Realty
    WebsiteView Page
    NEXA Lending- Investors Edge Concierge
    View Page
    1Reply
  • Josh C.Pro Member
    Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
    8mo

    I’m Indianapolis actually doing deals. That’s not low balling. Here is my closing statement of the last place I bought. Closing costs were negative. Meaning tax credits were more than all the fees and I cost paid $2500 to buy this place. Unless your lender has tons of junk fees it shouldn’t be that much. This property costed exactly in the range you asked about. 

    1Reply
    • Mohamed F.
      Member since 2024 · 20 posts · 5 votes
      7mo
      Quote from @Josh C.:

      I’m Indianapolis actually doing deals. That’s not low balling. Here is my closing statement of the last place I bought. Closing costs were negative. Meaning tax credits were more than all the fees and I cost paid $2500 to buy this place. Unless your lender has tons of junk fees it shouldn’t be that much. This property costed exactly in the range you asked about. 


      What tax credits? Are they available to all buyers?
      0Reply
  • Josh C.Pro Member
    Property Manager · Indianapolis, IN · Member since 2010 · 1k+ posts · 1k+ votes
    6mo

    @Mohamed F.

    Property tax credits. Yes all buyers get them.

    1Reply
    • Mohamed F.
      Member since 2024 · 20 posts · 5 votes
      6mo
      Quote from @Josh C.:

      @Mohamed F.

      Property tax credits. Yes all buyers get them.


      Thank you. 
      1Reply
  • Gloria N GearBusiness Member
    Realtor · Indianapolis IN · Member since 2018 · 464 posts · 339 votes
    6mo

    Just wanted to hop on and confirm that both @Frank Pyle and @Josh C. are correct.  I usually tell my clients to estimate 3-6% total depending on their lender, BUT title and recording fees should be less than $1000.  AND you will get a property tax credit.  

    To explain the tax credit, Indiana pays property taxes a year in arrears. If you write the purchase agreement correctly, the seller will credit you for the past year of taxes and the current year up until the date of closing.  Those taxes will be due on May 1st or Nov 1st depending on your closing day.  I know Josh and Frank and all three of us would be happy to hop on a call with any of you to explain that further.

    1Reply
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