INDIANAPOLIS — With the first of the month quickly approaching, many in Indianapolis know that means the rent is due.
And for many in the city, rent has become less affordable.
In an article posted to Realtor.com, research found the affordability of rent took a serious hit in the last year. The website calculates affordability in terms of the percent rent takes up of the area’s median income.
In February 2022, rent in the city required 20% of the median income. Last month, it was 22.1%.
That 2% jump was tied with Miami for the second-highest jump among the country’s top 50 real estate markets. The city with the biggest jump? New York.
Isha Nadgauda said they loved the rental deal she secured two years ago during the COVID-19 pandemic.
“We got great deals at that time, too,” Nadgauda said. “Parking was a lot cheaper, and we got a month or two of free rent right when we started because of COVID deals.”
Nadgauda said that is a different story today.
“Parking went up about 50 bucks and I think base rent went up about three-hundred dollars a month,” lamented Nadguada.
So, what’s pushing rental prices higher? One expert said it is a more expensive price on homes for sale.
“There has been an influx of institutional investors that actually swarmed the Indianapolis real estate market and they literally gobbled up like thousands of properties,” said local real estate agent Cara Conde.
Conde said she knew of one investment group that bought a thousand properties in a single year. Most were refurbished and turned into premium rental properties, she said.
The institutional buying eliminated available homes for sale, driving up prices. That forced some first-time home buyers out of the market.
Now, those would-be homeowners are getting squeezed on rents, too.
“They’re stressing over the dilemma of a $300 – $400 dollar increase on a $1,500 rent and that’s a more than 20% increase,” said Conde.
So, what’s a long-term renter to do?
“It makes me think about moving around, but as you know, the question is… is it really worth it moving across the street?” asked Nadgauda.
Especially with the current likelihood that the price of that new apartment will also go up.