Indianapolis: 1,184 of 3,501 homes for sale cover the full payment at 25% down

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Indianapolis: 1,184 of 3,501 homes for sale cover the full payment at 25% down

David LurveyPro Member
Technology · Sarasota, FL · Member since 2026 · 24 posts · 5 votes

Each week I run all 1–4 unit homes for sale in the city of Indianapolis through one test: would a 12-month lease cover principal, interest, taxes, insurance and HOA? That's DSCR 1.0, the test a DSCR lender uses.

Today's list (Oct 29):

- 20% down: 849 homes pass
- 25% down: 1,184 pass
- 30% down: 1,551 pass

That's out of 3,501 homes I could price, of 4,556 listed. Roughly 1 in 3 at 25% down. For comparison, the Sarasota metro was 1 in 25 this week.

Where they are, at 25% down. Five ZIPs hold almost half:
- 46201: 151 of 268
- 46203: 128 of 260
- 46218: 111 of 154
- 46219: 81 of 150
- 46208: 71 of 144

At the other end, 46260 has 3 of 83 and 46256 has 3 of 65.

What they are: 1,062 single-family homes, most priced $140k to $217k, typically 3 beds. 88 duplexes to fourplexes, around $219k. 30 condos, around $149k.

What it doesn't count: vacancy, repairs, capex and management. This is the lender's test, not cash flow. A home right at 1.0 still has to carry all of that on top.

Assumptions: 30-year loan at 7.25% (7.625% for 2–4 units). Taxes at 2% of price, since Indiana caps tax on rental property at 2% of assessed value. Insurance from Indiana defaults. HOA as listed. Rents are two independent estimates for a 12-month lease, never short-term. Site-built resale only, so manufactured homes and new construction are left out.

If you own rentals in 46201 or 46218: what are 3-bed leases actually getting right now?

Disclosure: I run NetsPositive, the screener these counts come from.

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

I would strongly advise you against dividing Indianapolis up into zip codes unless you hate money. We have a lot in 46201 and we have 3 beds that rent for $2600 and $825 in that same zip. West side of that is high end and gets more working class to even rough as you head East.

Are you seeing investors close properties at 1.0 DSCR? I feel most people want 1.2 or better at least here in Indianapolis for the properties we manage.

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

    I would strongly advise you against dividing Indianapolis up into zip codes unless you hate money. We have a lot in 46201 and we have 3 beds that rent for $2600 and $825 in that same zip. West side of that is high end and gets more working class to even rough as you head East.

    Are you seeing investors close properties at 1.0 DSCR? I feel most people want 1.2 or better at least here in Indianapolis for the properties we manage.

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    • David LurveyPro Member
      OP
      Technology · Sarasota, FL · Member since 2026 · 24 posts · 5 votes
      3d

      Fair point, Josh, and it's the kind of local check I was hoping for. The ZIP lines are just a tally: each home gets its own rent estimate for its size and location, and the count is how many pass one by one. It isn't saying "buy anywhere in 46201."

      That said, my estimates for the 102 three-bed houses for sale in 46201 run from about $1,250 to $3,080, most between $1,370 and $2,030. Nothing gets near your $825, so on the roughest blocks I'm probably high. Where does $825 rent, if you don't mind saying?

      On 1.0: I can't see closings, only listings, and I agree 1.0 is the lender's floor, not a buy signal. At your 1.2, it's 293 of 3,420 citywide at 25% down, and 40 of 265 in 46201.

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  • Nicolas Rey
    Developer · DE · Member since 2026 · 1 post · 0 votes
    4d

    Really useful screen, thanks for running it every week.

    Disclosure: I build a county-ranking map from public data, so I look at this from the Census side, not the MLS side. One thing I'd love to see is your pass rate split by county. On Census 2020–24 medians, rent ÷ home value is about 0.51%/mo in Marion vs 0.39% in Hamilton and 0.36% in Boone. So I'd expect the suburbs to pass DSCR 1.0 a lot less often, even though they score better on incomes, jobs and how fast homes sell.

    Hancock (Greenfield) looks like the middle ground on paper, at about 0.44%. Have you ever run the screen on Hamilton or Hancock listings? Curious whether live listings match what the Census medians suggest.

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    • David LurveyPro Member
      OP
      Technology · Sarasota, FL · Member since 2026 · 24 posts · 5 votes
      3d

      Thanks, Nicolas. Not yet: the Indianapolis screen covers the city only, so Hamilton, Hancock and Boone listings aren't in it. Inside the city, though, your Census pattern shows up: the north-edge ZIPs next to Hamilton County barely passed in this thread's numbers, 46260 with 3 of 83 and 46256 with 3 of 65, against roughly 1 in 3 citywide. If enough people want the suburbs, I'll look at adding them.

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  • Anthony Smith
    Real Estate Agent · Detroit, MI · Member since 2016 · 115 posts · 57 votes
    2d

    David, the screen is interesting, but I'd push on the same thing Josh did: a house that covers principal, interest, taxes, insurance and HOA at exactly 1.0 hasn't covered anything yet. Vacancy, repairs, capex and management are real costs, and at 1.0 there is nothing left to pay them with — the first furnace comes straight out of the owner's pocket.

    I run a version of this screen on Detroit listings every night, and the share that survives honest math is much smaller than 1 in 3. The test I actually trust is two-part: does the rent cover ALL the costs with room to spare, and is the purchase price plus any rehab at least 30% under what the house is worth fixed up? The second part is what protects you when the first part disappoints.

    A 1.0 DSCR screen is a fine first pass for finding where to look. It's just not a buy signal — and in the Midwest ZIP codes where it flags the most 'passes,' it's usually flagging the places where the expense side bites hardest.

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    • David LurveyPro Member
      OP
      Technology · Sarasota, FL · Member since 2026 · 24 posts · 5 votes
      2d

      Agreed, Anthony. 1.0 is where to look, not a buy signal, which is why I've moved my newer threads to DSCR 1.25 at 20% down. In Indianapolis that cuts 1 in 3 down to 130 of about 3,400, roughly 1 in 26. Leave room for about 26% of rent going to vacancy, repairs, capex and management, and it's 90 at 25% down.

      The second half of your test I don't do: there's no rehab budget or after-repair value in the screen. The closest it gets is flagging homes priced well under their ZIP's price per square foot, which usually means work. How do you set the fixed-up value in Detroit, from sold comps?

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