Indianapolis Real Estate as Investment Property in a Declining Market

by Jordan FeRoss
As every cloud typically has a silver lining, the one to look for currently is some way to use the poor Indianapolis real estate market to the advantage of the small investor. If we consider the current negative trends in home ownership, as a sign of things to come, purchasing real estate for the purpose of use as rental property is a very solid investment.

When trying to obtain a mortgage for the purchase, a good recommendation is to first consider going to your local credit union. Credit unions are typically smaller in scale than their banking counterparts, and usually base much of their marketing on being an asset to the local community. The logic of a venture to purchase rental property in the Indianapolis real estate market will be easier to convince a real person of than working through stacks of computerized paperwork with a commercial bank.

Having the right credit and employment history will be vitally important to securing a commercial mortgage in any venture of Indianapolis real estate. Typically, a loan request for commercial property requires a 30% down payment, but again, discussion with a local community lender may relax these requirements, given the desperate condition the housing and the lending market is in. While many lenders are tightening requirements and restrictions for obtaining a mortgage, smaller lenders may be willing to invest in the local community. Procuring a mortgage to help someone in the community sell their property, help someone else in the community purchase property for investment, and help draw new population to the area by providing housing options is a great way for the lender to make a name for itself in the marketplace.

Credit blemishes may not be a stopping block to purchasing Indianapolis real estate. As the housing market has degenerated, the increasing number of foreclosures is so rampant, that it is becoming commonplace to see foreclosures on a credit report. While a prior foreclosure may likely prevent the purchasing of real estate for rental purposes, less severe credit blemishes, with explanation, will likely be overlooked.

An important consideration to keep in mind when purchasing property to be used as rental property, not only in Indianapolis real estate but in any market, is to be sure your monthly income can pay the mortgage on all properties, even if you do not have them all rented. There will be times, at least occasionally between leases, when you will not have all of your units rented out, but will still be responsible for the mortgage payment. Be sure to plan for this contingency.

As a whole, the Indianapolis real estate market has enjoyed, even in this tumultuous economic climate, a relatively strong economic standing even as property values are declining. The overall statistical figures show that Indianapolis continues to hold unemployment rates well under the national average. As recently as January 2008, local news sources have recorded that the Indianapolis area economy was relatively strong compared to the statistics of metropolitan areas in surrounding states.

A relatively low unemployment rate in combination with state and local taxes that are lower than the national average makes the Indianapolis real estate market area a very good investment for the purchaser who chooses to lease his property out until the market rebounds.

About the Author

This article is brought to you courtesy of Jordan FeRoss and the Indianapolis real estate agents at Indy Metro Homes. For more information regarding Indianapolis homes for sale and for rent visit http://www.indymetrohomes.com