Cap Rate in Indianapolis, IN

2026 Market Overview for Real Estate Investors

Avg Cap Rate

8.1%

#9 of 50 markets

Median Home Price

$175,000

Purchase price

Median Monthly Rent

$1,350

$16,200/yr gross

Rent-to-Price Ratio

0.77%

Moderate

Cap Rate Rating

Very Good

Above average. Make sure the higher return is not masking higher risk or deferred maintenance.

Market Snapshot

Population	887,642
5-Year Population Growth	+3.2%
Median Household Income	$50,000
Vacancy Rate	7.5%
Property Tax Rate	0.84%($1,470/yr)

Investor Takeaway

Indianapolis is the most balanced cash-flow market in the Midwest — strong population growth, diversified economy, and landlord-friendly laws make it a top pick for out-of-state investors.

Quick Math

Estimated annual numbers for a median-priced property in Indianapolis, IN before financing:

Annual Gross Rent$16,200

Less Vacancy (7.5%)($1,215)

Less Property Tax (0.84%)($1,470)

Less Est. Insurance + Maintenance($3,500)

Estimated NOI$10,015

Implied Cap Rate5.7%

Estimates based on median values. Insurance + maintenance estimated at 2% of home value. Actual results vary by property condition, neighborhood, and management.