Over the years of investing I have started to develop a metric where we look at the ratio of PMs in NARPM compared to the overall population to determine if there is sufficient mass of service providers to enable successful SFR investing. I have noted that the markets with the better ratios are better performers. I am looking at entering the Indy market and it was looking good overall but then I saw the ratio and am a bit concerned that I may not be able to find good PMs or repair folks.
For example (2017 population #s):
Indianapolis - 20 different PMs within 20mi radius. Total population of 873K for a ratio of 43.65. This is not a good ratio, but what do you find as an investor in this market?
Dallas has a ratio of 1341K people for 141 PMs, 79 are Pro for a ratio of 9.5
Cincinnati has a ratio of 301K people for 8 PMs, 1 is Pro for a ratio of 37.6. Not good market for good PMs or service folks.
Atlanta has a ratio of 486K people for 151 PMs for a ratio of 3.2.
Would be interested in your thoughts as active investors in the Indianapolis market.
I see where you're going with this but the number of PM firms is irrelevant in my opinion. You're probably chasing the number of homes under property management as a ratio of single family homes + apartment units.
i will say there is definitely a labor shortage which is causing prices to rise as it relates to repairs of any kind but that too is subjective. I invest there myself and in conversing with PM's, they too state that the good people have never been busier and frankly don't need to compete for much work. You could pull the number of licenses and hope you have access to historical data to confirm there are in fact fewer of them though that may not be available.
Maybe an agency like Angie's List has a database of market rates which could also point to a somewhat linear increase in the cost of labor as well.
NARPM is not very strong in the Midwest
also your population number is only for Indianapolis. It does not include the suburbs that are not within Marion County but serviced by most PM's
@Richard Olshove you are WAY overthinking this. In all my years I have never seen such a " formula " Tenants are the easy part,
In my opinion, you only need one good property management company.
Indianapolis is a great market to invest in. It really doesn't matter how many PM's there are. If you find a good one that is all you need.
I've been investing in Indianapolis for 4 years, is a great rental market for SFH, population and overall growth is strong, just make sure you interview and reference the PM you talk about, then go with the best choice ready to switch if necessary if you don't connect well after you start working.
I agree with Harvey. Not strong here and an organization requiring a small amount of their own training on top of the training already required to be agent to hang a plaque in your office doesn’t mean a PM company is good or bad.
All thank you for your responses, this helps align my thinking WRT the Indy market. Of course one good PM is all one needs, but I have also found that as Ariel points out I need to be prepared to change if need be. If there is only one good one due to a lack of PM supply then I wouldn't be able to switch!
This said there seems to be a strong number of PMs in the market and as @Harvey Levin indicates NARPM isn't very active in Indy.
I do want to add in regards to NARPM that I started a local chapter here in May of 2018. NARPM changed the rules 2 weeks later so now we are more of a NARPM Meet Up group. If any PM wants info message me It is only for licensed Property Managers