Indianapolis touts one of the most stable real estate markets in the country, in both sales and rental markets. While many of our nation’s cities suffered a 30-50% decline, our real estate market dipped a modest 7% throughout the last recession.
Our rental prices have soared 11+% over the past year. Indeed, real estate is a solid choice in rounding out an investment portfolio. Buying and holding for income and appreciation has been my goal from the start … flipping has always been a popular topic of conversation but is no guarantee of immediate or long-term return.
I like Larry Arth’s explanation of the value in real estate investment. He wholesales properties in several locations, and Indianapolis is one of his favorites. Here’s his take on the concept, as stated in Personal Real Estate Investor Magazine:
“IDEAL is the acronym for the 5 wealth building principles
I (INCOME) positive cash flow
D (DEDUCTIONS) interest, depreciation, repairs, all expense are tax deductible
E (EQUITY) as tenants pay down the mortgage the principle builds up is equity for you
A (APPRECIATION) annual property value growth
L (LEVERAGE) O.P.M. (other people’s money) you gain all the above from borrowed money
There is no other investment available that can fulfill all 5 of these wealth building principles. Most investments will return 1 or 2 of these wealth building principles and only real estate has the ability to return all 5.”