{"id":1041,"date":"2026-09-02T07:40:42","date_gmt":"2026-09-02T11:40:42","guid":{"rendered":"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/"},"modified":"2026-09-24T00:20:50","modified_gmt":"2026-09-24T04:20:50","slug":"indiana-cap-rate","status":"publish","type":"post","link":"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/","title":{"rendered":"Indiana Cap Rate by City: Best Deals (2026)"},"content":{"rendered":"<p>Indiana cap rate data shows Fort Wayne leading at 6.0\u20137.5%, followed by South Bend at 6.5\u20138.5%, Indianapolis at 6.5\u20138.0%, and Evansville at 6.0\u20137.0%. These are among the highest cap rates in the Midwest \u2014 driven by low entry prices ($130K\u2013$185K median), moderate property tax (0.85% effective, capped at 2%), and insurance well below the national average ($1,800\/year). Here is what cap rates actually look like across five Indiana metros in 2026, with worked examples and the factors that compress or expand cap rates in each market.<\/p>\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" loading=\"lazy\" width=\"900\" height=\"506\" src=\"https:\/\/arvcalc.com\/blog\/wp-content\/uploads\/2026\/09\/indiana-cap-rate-guide.jpg\" alt=\"indiana cap rate guide \u2014 investment analysis with worked examples and data 2026\" class=\"wp-image-1043\" srcset=\"https:\/\/arvcalc.com\/blog\/wp-content\/uploads\/2026\/09\/indiana-cap-rate-guide.jpg 1672w, https:\/\/arvcalc.com\/blog\/wp-content\/uploads\/2026\/09\/indiana-cap-rate-guide-300x169.jpg 300w, https:\/\/arvcalc.com\/blog\/wp-content\/uploads\/2026\/09\/indiana-cap-rate-guide-1024x576.jpg 1024w, https:\/\/arvcalc.com\/blog\/wp-content\/uploads\/2026\/09\/indiana-cap-rate-guide-768x432.jpg 768w, https:\/\/arvcalc.com\/blog\/wp-content\/uploads\/2026\/09\/indiana-cap-rate-guide-1536x864.jpg 1536w\" sizes=\"auto, (max-width: 900px) 100vw, 900px\" \/><\/figure>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_83 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#Indiana_Cap_Rate_by_City_2026_Data\" >Indiana Cap Rate by City: 2026 Data<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#What_Drives_Cap_Rates_in_Indiana\" >What Drives Cap Rates in Indiana<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#Property_Tax_085_Average_Capped_at_2\" >Property Tax: 0.85% Average, Capped at 2%<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#Insurance_1800Year_Average\" >Insurance: $1,800\/Year Average<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#Vacancy_45%E2%80%936_in_Major_Metros\" >Vacancy: 4.5\u20136% in Major Metros<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#Worked_Example_Indianapolis_SFR_185K\" >Worked Example: Indianapolis SFR ($185K)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#Worked_Example_Fort_Wayne_Duplex_160K\" >Worked Example: Fort Wayne Duplex ($160K)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#Indiana_Cap_Rate_vs_Other_States\" >Indiana Cap Rate vs Other States<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#How_to_Improve_Cap_Rate_on_Indiana_Properties\" >How to Improve Cap Rate on Indiana Properties<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#1_Buy_Below_Market\" >1. Buy Below Market<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#2_Target_Multifamily\" >2. Target Multifamily<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#3_Reduce_Insurance\" >3. Reduce Insurance<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#4_Protest_Property_Tax\" >4. Protest Property Tax<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#5_Self-Manage_Carefully\" >5. Self-Manage (Carefully)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#5_Cap_Rate_Mistakes_in_Indiana\" >5 Cap Rate Mistakes in Indiana<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#1_Using_Statewide_Average_Tax_Instead_of_County_Rate\" >1. Using Statewide Average Tax Instead of County Rate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#2_Ignoring_the_Homestead_Deduction_Gap\" >2. Ignoring the Homestead Deduction Gap<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#3_Comparing_Bloomington_Cap_Rates_to_Fort_Wayne\" >3. Comparing Bloomington Cap Rates to Fort Wayne<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#4_Excluding_CapEx_Reserves\" >4. Excluding CapEx Reserves<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#5_Using_Asking_Rent_Instead_of_Achieved_Rent\" >5. Using Asking Rent Instead of Achieved Rent<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#Frequently_Asked_Questions\" >Frequently Asked Questions<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#What_is_a_good_cap_rate_in_Indiana_for_2026\" >What is a good cap rate in Indiana for 2026?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#Why_are_Indiana_cap_rates_higher_than_Texas_or_Florida\" >Why are Indiana cap rates higher than Texas or Florida?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#Which_Indiana_city_has_the_highest_cap_rate\" >Which Indiana city has the highest cap rate?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#How_does_Indiana_property_tax_affect_cap_rate\" >How does Indiana property tax affect cap rate?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#Should_I_use_cap_rate_or_cash-on-cash_return_for_Indiana_deals\" >Should I use cap rate or cash-on-cash return for Indiana deals?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/arvcalc.com\/blog\/indiana-cap-rate\/#Related_Calculators_and_Guides\" >Related Calculators and Guides<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Indiana_Cap_Rate_by_City_2026_Data\"><\/span>Indiana Cap Rate by City: 2026 Data<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<figure class=\"wp-block-table\">\n<table>\n<thead>\n<tr>\n<th>Metro<\/th>\n<th>Median Price<\/th>\n<th>Median Rent (3BR)<\/th>\n<th>Cap Rate Range<\/th>\n<th>Property Tax<\/th>\n<th>Insurance<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><strong>Indianapolis<\/strong><\/td>\n<td>$185,000<\/td>\n<td>$1,450<\/td>\n<td><strong>6.5\u20138.0%<\/strong><\/td>\n<td>1.02%<\/td>\n<td>$1,900<\/td>\n<\/tr>\n<tr>\n<td><strong>Fort Wayne<\/strong><\/td>\n<td>$145,000<\/td>\n<td>$1,100<\/td>\n<td><strong>6.0\u20137.5%<\/strong><\/td>\n<td>0.88%<\/td>\n<td>$1,700<\/td>\n<\/tr>\n<tr>\n<td><strong>Evansville<\/strong><\/td>\n<td>$140,000<\/td>\n<td>$1,050<\/td>\n<td><strong>6.0\u20137.0%<\/strong><\/td>\n<td>0.82%<\/td>\n<td>$1,600<\/td>\n<\/tr>\n<tr>\n<td><strong>South Bend<\/strong><\/td>\n<td>$130,000<\/td>\n<td>$1,000<\/td>\n<td><strong>6.5\u20138.5%<\/strong><\/td>\n<td>0.90%<\/td>\n<td>$1,500<\/td>\n<\/tr>\n<tr>\n<td><strong>Bloomington<\/strong><\/td>\n<td>$220,000<\/td>\n<td>$1,400<\/td>\n<td><strong>4.5\u20136.0%<\/strong><\/td>\n<td>0.78%<\/td>\n<td>$1,800<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n<p>Cap rates modeled with 5.5% vacancy, 9% management, 8% maintenance, property-specific tax and insurance. Data from <a href=\"https:\/\/www.zillow.com\/research\/data\/\" target=\"_blank\" rel=\"noopener noreferrer\">Zillow Research<\/a> (ZHVI\/ZORI), Redfin median sale prices, and county assessor records. Calculate your specific deal in the <a href=\"\/states\/indiana\/cap-rate-calculator\">Indiana cap rate calculator<\/a>.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_Drives_Cap_Rates_in_Indiana\"><\/span>What Drives Cap Rates in Indiana<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Property_Tax_085_Average_Capped_at_2\"><\/span>Property Tax: 0.85% Average, Capped at 2%<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Indiana constitutionally caps property tax at 2% of assessed value for non-homestead residential. The effective average is 0.85% statewide \u2014 significantly lower than Ohio (1.36%), Texas (1.60%), or Illinois (2.23%). Lower tax means higher NOI means higher cap rate. On a $185K Indianapolis property, you pay ~$1,887\/year in tax. The same property in Columbus OH would cost ~$2,516\/year \u2014 $629 more per year directly subtracted from NOI.<\/p>\n<p>County variation matters: Marion County (Indianapolis) 1.02%, Allen County (Fort Wayne) 0.88%, St. Joseph County (South Bend) 0.90%, Monroe County (Bloomington) 0.78%. Per <a href=\"https:\/\/www.tax.indiana.gov\/\" target=\"_blank\" rel=\"noopener noreferrer\">Indiana Department of Revenue<\/a>, investment properties do not qualify for the homestead deduction ($48K off assessed value).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Insurance_1800Year_Average\"><\/span>Insurance: $1,800\/Year Average<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Indiana landlord insurance averages $1,800\/year \u2014 14% below the national average. This directly boosts NOI compared to high-insurance states. Florida investors pay $4,500\/year, Texas $3,300. That $1,500\u2013$2,700 difference is pure NOI that Indiana investors keep. Tornado and hail risk in central Indiana can push premiums above $2,500 for some properties. Flood zones along the Wabash, White, and Ohio rivers add $400\u2013$1,200\/year.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Vacancy_45%E2%80%936_in_Major_Metros\"><\/span>Vacancy: 4.5\u20136% in Major Metros<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Per <a href=\"https:\/\/fred.stlouisfed.org\/tags\/series?t=indiana\" target=\"_blank\" rel=\"noopener noreferrer\">FRED data<\/a>, Indiana rental vacancy averaged 5.5% statewide in 2025. Fort Wayne runs tightest at 4.5%, Indianapolis at 5.5%, South Bend and Evansville at 5.0\u20135.5%. Bloomington has seasonal variation (6.0% average) tied to Indiana University&#8217;s academic calendar. Low vacancy supports higher effective rents, which supports cap rates.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Worked_Example_Indianapolis_SFR_185K\"><\/span>Worked Example: Indianapolis SFR ($185K)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<pre><code>Property: 3BR\/2BA SFR, Fountain Square, Indianapolis\nPurchase Price: $185,000\nMonthly Rent: $1,450\n\nAnnual Income:\n Gross Rent: $17,400\n Vacancy (5.5%): \u2212$957\n Effective Gross: $16,443\n\nAnnual Expenses:\n Property Tax (1.02%): \u2212$1,887\n Insurance: \u2212$1,900\n Management (9%): \u2212$1,480\n Maintenance (8%): \u2212$1,315\n CapEx (5%): \u2212$822\n Total Expenses: \u2212$7,404\n\nNOI: $9,039\nCap Rate: $9,039 \/ $185,000 = 4.89%<\/code><\/pre>\n<p><strong>4.89% cap rate<\/strong> \u2014 below the 6.5\u20138.0% range in our table. Why? The table shows ranges for deals below median price (value-add, off-market). At full market price ($185K) with conservative expenses, the realistic cap rate is 4.5\u20135.5%. To hit 7%+ cap rate, you need to buy at $130K or find rents above $1,600.<\/p>\n<p>This is the honest reality of cap rates in 2026. The &#8220;7% cap rate in Indianapolis&#8221; numbers require either below-market acquisition, above-market rents, or aggressive expense assumptions.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Worked_Example_Fort_Wayne_Duplex_160K\"><\/span>Worked Example: Fort Wayne Duplex ($160K)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<pre><code>Property: Duplex, Oxford neighborhood, Fort Wayne\nPurchase Price: $160,000\nMonthly Rent: $900\/unit \u00d7 2 = $1,800\n\nAnnual Income:\n Gross Rent: $21,600\n Vacancy (4.5%): \u2212$972\n Effective Gross: $20,628\n\nAnnual Expenses:\n Property Tax (0.88%): \u2212$1,408\n Insurance: \u2212$2,000\n Management (9%): \u2212$1,856\n Maintenance (8%): \u2212$1,650\n CapEx (5%): \u2212$1,031\n Total Expenses: \u2212$7,945\n\nNOI: $12,683\nCap Rate: $12,683 \/ $160,000 = 7.93%<\/code><\/pre>\n<p><strong>7.93% cap rate<\/strong> \u2014 Fort Wayne duplexes hit the numbers that Indianapolis SFRs cannot. Two rent streams on one tax bill, one insurance policy, one management contract. The per-unit expenses are lower, and the aggregate rent pushes NOI high enough for strong cap rates. This is why experienced Indiana investors target Fort Wayne multifamily over Indianapolis SFR for pure cash flow plays.<\/p>\n<p>Run both scenarios in the <a href=\"\/states\/indiana\/cap-rate-calculator\">Indiana cap rate calculator<\/a>. For cash flow analysis with financing, use the <a href=\"\/states\/indiana\/rental-property-calculator\">Indiana rental property calculator<\/a>.<\/p>\n<p>The Fort Wayne duplex demonstrates why Indiana cap rate analysis favors multifamily. When you stack two rent streams against one tax bill and one insurance policy, the per-unit cost drops dramatically. A Fort Wayne duplex at $160K generates $12,683 NOI \u2014 nearly $3,700 more than an Indianapolis SFR at $185K ($9,039 NOI) despite costing $25K less.<\/p>\n<p>This math scales further with triplexes and fourplexes. A Fort Wayne fourplex at $240K with four units at $850\/month generates approximately $27,000 NOI \u2014 an 11%+ cap rate that makes the deal attractive even at current financing costs. The cap rate advantage of multifamily is not unique to Indiana, but Indiana&#8217;s low entry prices make multifamily accessible to investors who cannot afford $400K+ duplexes in coastal markets.<\/p>\n<p>For investors evaluating Indiana cap rates, the key insight is: do not judge the state by SFR metrics alone. The real Indiana cap rate opportunity is in 2-4 unit properties in Fort Wayne, South Bend, and suburban Indianapolis. These properties consistently deliver 6.5-8.5% cap rates at market prices \u2014 without requiring below-market acquisition or aggressive expense assumptions.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Indiana_Cap_Rate_vs_Other_States\"><\/span>Indiana Cap Rate vs Other States<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<figure class=\"wp-block-table\">\n<table>\n<thead>\n<tr>\n<th>State<\/th>\n<th>Typical Cap Rate (SFR)<\/th>\n<th>Median Price<\/th>\n<th>Why<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><strong>Indiana<\/strong><\/td>\n<td>4.5\u20136.5%<\/td>\n<td>$185K<\/td>\n<td>Low tax, low insurance, moderate prices<\/td>\n<\/tr>\n<tr>\n<td>Ohio<\/td>\n<td>4.0\u20136.0%<\/td>\n<td>$190K<\/td>\n<td>Higher tax (1.36%) compresses cap rates<\/td>\n<\/tr>\n<tr>\n<td>Georgia<\/td>\n<td>4.0\u20135.5%<\/td>\n<td>$280K<\/td>\n<td>Higher prices, moderate expenses<\/td>\n<\/tr>\n<tr>\n<td>Texas<\/td>\n<td>3.0\u20134.5%<\/td>\n<td>$290K<\/td>\n<td>High tax (1.6%) + high insurance ($3,300)<\/td>\n<\/tr>\n<tr>\n<td>Florida<\/td>\n<td>2.5\u20134.0%<\/td>\n<td>$380K<\/td>\n<td>High prices + extreme insurance ($4,500)<\/td>\n<\/tr>\n<tr>\n<td>North Carolina<\/td>\n<td>3.5\u20135.0%<\/td>\n<td>$280K<\/td>\n<td>Rising insurance ($3,000), higher prices<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n<p>Indiana produces the highest SFR cap rates among the six states we cover \u2014 because entry prices are low and operating expenses are moderate. The only way to beat Indiana cap rates is to find off-market deals in Ohio or invest in small multifamily (where per-unit economics are better in every state). Compare any state in the <a href=\"\/cap-rate-calculator\">cap rate calculator<\/a>. See our <a href=\"\/blog\/cap-rate-by-state-best-markets-2026\/\">cap rate by state guide<\/a> for the full national comparison.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_to_Improve_Cap_Rate_on_Indiana_Properties\"><\/span>How to Improve Cap Rate on Indiana Properties<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"1_Buy_Below_Market\"><\/span>1. Buy Below Market<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A $185K property at a 10% discount ($166K) improves cap rate from 4.89% to 5.45%. Foreclosures, estate sales, and tired landlord acquisitions in Indianapolis and Fort Wayne consistently trade 10\u201320% below market. Use the <a href=\"\/arv-calculator\">ARV calculator<\/a> to verify value.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_Target_Multifamily\"><\/span>2. Target Multifamily<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Duplexes and triplexes produce 1.5\u20132.5% higher cap rates than SFR at similar price points. The Fort Wayne duplex example (7.93%) vs Indianapolis SFR (4.89%) shows this clearly. Per-unit expenses drop while aggregate rent climbs.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_Reduce_Insurance\"><\/span>3. Reduce Insurance<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Shop 3\u20135 quotes from landlord-specific insurers (Steadily, Obie, NREIG). Raising deductible from $1,000 to $2,500 typically saves 10\u201315%. On a $1,900 policy, that is $190\u2013$285\/year added to NOI. See our <a href=\"\/blog\/rental-property-insurance-cost-by-state\/\">insurance cost guide<\/a>.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"4_Protest_Property_Tax\"><\/span>4. Protest Property Tax<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Indiana allows annual assessment protests. A successful protest reducing assessed value by $15,000 saves ~$128\/year in tax at the 0.85% effective rate. Over 10 years: $1,280 in cumulative savings.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"5_Self-Manage_Carefully\"><\/span>5. Self-Manage (Carefully)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Eliminating the 9% management fee adds 0.7\u20131.0% to cap rate. But self-management only makes sense if you are local and have fewer than 5 units. Beyond that, your time is worth more than the management fee. Factor in the <a href=\"\/blog\/property-management-fee-calculator-guide\/\">property management cost guide<\/a>.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"5_Cap_Rate_Mistakes_in_Indiana\"><\/span>5 Cap Rate Mistakes in Indiana<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"1_Using_Statewide_Average_Tax_Instead_of_County_Rate\"><\/span>1. Using Statewide Average Tax Instead of County Rate<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>0.85% statewide vs 1.02% Marion County = 0.17% difference. On $200K: $340\/year in NOI. That swings cap rate by 0.2 percentage points. Always use county-specific rates.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_Ignoring_the_Homestead_Deduction_Gap\"><\/span>2. Ignoring the Homestead Deduction Gap<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Owner-occupants get a $48,000 deduction from assessed value. Investors do not. A $200K property: owner pays tax on $152K, investor pays on $200K. The investor&#8217;s tax bill is 32% higher. Do not use owner-occupied tax comps for investment analysis.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_Comparing_Bloomington_Cap_Rates_to_Fort_Wayne\"><\/span>3. Comparing Bloomington Cap Rates to Fort Wayne<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Bloomington (4.5\u20136.0%) and Fort Wayne (6.0\u20137.5%) serve different strategies. Bloomington is a university appreciation play. Fort Wayne is a cash flow play. Comparing their cap rates without context leads to wrong conclusions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"4_Excluding_CapEx_Reserves\"><\/span>4. Excluding CapEx Reserves<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>A $185K property with a 20-year-old roof needs $12,000\u2013$15,000 for replacement within 5\u20137 years. At 5% of gross rent, you reserve $870\/year. Excluding this makes cap rate look 0.4\u20130.5% better \u2014 until the roof fails and you pay out of pocket.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"5_Using_Asking_Rent_Instead_of_Achieved_Rent\"><\/span>5. Using Asking Rent Instead of Achieved Rent<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Zillow asking rents in Indianapolis average 5\u20138% higher than actual lease rates. A $1,450 asking rent becomes $1,335\u2013$1,380 in practice. Use recently signed leases or ask a local PM for actual achieved rents.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions\"><\/span>Frequently Asked Questions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div>\n<div class=\"schema-faq-section\">\n<h3 class=\"schema-faq-question font-bold text-lg cursor-pointer\"><span class=\"ez-toc-section\" id=\"What_is_a_good_cap_rate_in_Indiana_for_2026\"><\/span>What is a good cap rate in Indiana for 2026?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"schema-faq-answer py-2\" style=\"display:block\">\n<p>At full market price with conservative expenses, expect 4.5\u20135.5% cap rate for SFR and 6.5\u20138% for small multifamily. The &#8220;7% cap rate&#8221; numbers quoted for Indiana typically require below-market acquisition or aggressive expense assumptions. For pure cash flow, target Fort Wayne and South Bend multifamily. For balanced cash flow + appreciation, target Indianapolis. Use the <a href=\"\/states\/indiana\/cap-rate-calculator\">Indiana cap rate calculator<\/a> with your specific numbers.<\/p>\n<\/div>\n<\/div>\n<div class=\"schema-faq-section\">\n<h3 class=\"schema-faq-question font-bold text-lg cursor-pointer\"><span class=\"ez-toc-section\" id=\"Why_are_Indiana_cap_rates_higher_than_Texas_or_Florida\"><\/span>Why are Indiana cap rates higher than Texas or Florida?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"schema-faq-answer py-2\" style=\"display:none\">\n<p>Three reasons: lower entry prices ($185K vs $290K+ in TX, $380K+ in FL), lower insurance ($1,800 vs $3,300 TX, $4,500 FL), and moderate property tax (0.85% vs 1.6% TX). Lower expenses = higher NOI. Lower price = higher cap rate at the same NOI. Indiana wins on both sides of the equation for cap rate specifically.<\/p>\n<\/div>\n<\/div>\n<div class=\"schema-faq-section\">\n<h3 class=\"schema-faq-question font-bold text-lg cursor-pointer\"><span class=\"ez-toc-section\" id=\"Which_Indiana_city_has_the_highest_cap_rate\"><\/span>Which Indiana city has the highest cap rate?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"schema-faq-answer py-2\" style=\"display:none\">\n<p>South Bend has the widest cap rate range (6.5\u20138.5%) due to the lowest entry prices ($130K median) combined with stable rental demand from Notre Dame University. Fort Wayne is close behind (6.0\u20137.5%) with the best duplex and triplex economics. Indianapolis has lower cap rates (6.5\u20138.0% range, 4.5\u20135.5% realistic at market price) but stronger appreciation. Bloomington has the lowest cap rates (4.5\u20136.0%) due to higher prices driven by Indiana University.<\/p>\n<\/div>\n<\/div>\n<div class=\"schema-faq-section\">\n<h3 class=\"schema-faq-question font-bold text-lg cursor-pointer\"><span class=\"ez-toc-section\" id=\"How_does_Indiana_property_tax_affect_cap_rate\"><\/span>How does Indiana property tax affect cap rate?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"schema-faq-answer py-2\" style=\"display:none\">\n<p>Indiana&#8217;s 0.85% effective property tax rate is a cap rate advantage. On a $185K property, you pay $1,572\/year in tax at the statewide average. In Ohio (1.36%), the same property costs $2,516 \u2014 $944 more. That $944 difference is pure NOI that Indiana investors keep, translating to 0.5% higher cap rate. The constitutional 2% cap for investment property protects against runaway assessment increases.<\/p>\n<\/div>\n<\/div>\n<div class=\"schema-faq-section\">\n<h3 class=\"schema-faq-question font-bold text-lg cursor-pointer\"><span class=\"ez-toc-section\" id=\"Should_I_use_cap_rate_or_cash-on-cash_return_for_Indiana_deals\"><\/span>Should I use cap rate or cash-on-cash return for Indiana deals?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"schema-faq-answer py-2\" style=\"display:none\">\n<p>Use cap rate first to screen and compare properties (unlevered, quick). Then use cash-on-cash return to evaluate after financing (levered, shows actual return on your cash). A 5% cap rate property with 25% down and 7% rate produces negative cash-on-cash because the mortgage rate exceeds the cap rate. Both metrics matter \u2014 cap rate for comparison, cash-on-cash for go\/no-go. Run both in the <a href=\"\/states\/indiana\/cap-rate-calculator\">Indiana cap rate calculator<\/a> and <a href=\"\/states\/indiana\/rental-property-calculator\">Indiana rental property calculator<\/a>.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<h2><span class=\"ez-toc-section\" id=\"Related_Calculators_and_Guides\"><\/span>Related Calculators and Guides<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li><a href=\"\/states\/indiana\/cap-rate-calculator\"><strong>Indiana Cap Rate Calculator<\/strong><\/a> \u2014 Calculate with IN defaults<\/li>\n<li><a href=\"\/states\/indiana\/rental-property-calculator\"><strong>Indiana Rental Property Calculator<\/strong><\/a> \u2014 Full cash flow analysis<\/li>\n<li><a href=\"\/states\/indiana\/dscr-calculator\"><strong>Indiana DSCR Calculator<\/strong><\/a> \u2014 Loan qualification<\/li>\n<li><a href=\"\/states\/indiana\/closing-costs-calculator\"><strong>Indiana Closing Costs<\/strong><\/a> \u2014 Buyer cost estimate<\/li>\n<li><a href=\"\/states\/indiana\/brrrr-calculator\"><strong>Indiana BRRRR Calculator<\/strong><\/a> \u2014 BRRRR cycle analysis<\/li>\n<li><a href=\"\/states\/indiana\/\"><strong>All Indiana Calculators<\/strong><\/a><\/li>\n<li><a href=\"\/calculators\"><strong>All 30+ Calculators<\/strong><\/a><\/li>\n<\/ul>\n<p>Other state cap rate guides:<\/p>\n<ul>\n<li><a href=\"\/blog\/ohio-cap-rate\/\">Ohio Cap Rate by City<\/a><\/li>\n<li><a href=\"\/blog\/georgia-cap-rate\/\">Georgia Cap Rate by City<\/a><\/li>\n<li><a href=\"\/blog\/north-carolina-cap-rate\/\">North Carolina Cap Rate by City<\/a><\/li>\n<li><a href=\"\/blog\/florida-cap-rate\/\">Florida Cap Rate by City<\/a><\/li>\n<li><a href=\"\/blog\/texas-cap-rate\/\">Texas Cap Rate<\/a><\/li>\n<li><a href=\"\/blog\/cap-rate-by-state-best-markets-2026\/\">Cap Rate by State: National Comparison<\/a><\/li>\n<li><a href=\"\/blog\/indiana-rental-property-investment\/\">Indiana Rental Property Complete Guide<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Indiana cap rate data shows Fort Wayne leading at 6.0\u20137.5%, followed by South Bend at 6.5\u20138.5%, Indianapolis at 6.5\u20138.0%, and Evansville at 6.0\u20137.0%. These are among the highest cap rates&#8230;<\/p>\n","protected":false},"author":1,"featured_media":1043,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[],"class_list":["post-1041","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing"],"_links":{"self":[{"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/posts\/1041","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/comments?post=1041"}],"version-history":[{"count":4,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/posts\/1041\/revisions"}],"predecessor-version":[{"id":1362,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/posts\/1041\/revisions\/1362"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/media\/1043"}],"wp:attachment":[{"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/media?parent=1041"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/categories?post=1041"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arvcalc.com\/blog\/wp-json\/wp\/v2\/tags?post=1041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}