We are going to share with you the top 5 factors to look for in an investment location. We can guarantee by the end of this list, you're going to want to INvest in INdiana with us!

1. POPULATION GROWTH

It’s important to invest in a city with an upwards trend in population. This gives insight to what the future of the housing demand will look like. A growing population requires a higher demand and limited supply for housing, which is going to drive up the cash flow from rent and the appreciation in the home’s value over time.

Fort Wayne is the 2nd largest city in Indiana, next to Indianapolis. Fort Wayne has seen steady growth since the early 90’s. (WorldPopulationReview) If the growth rate remains around 4% as it has in years past, the current population of 264,170 will soon hit 300k in a short couple of years!

If you include the metro area surrounding the city of 
Fort Wayne, the population nearly doubles at 431,612 people.

2. HOME VALUE

Just because you’re renting out a home to generate a high cash flow doesn’t mean the initial investment shouldn’t matter! Make sure to check out the median property value, and make sure it’s increasing over time. Even if you only hold your rental for a couple of years, you’ll be thankful when you can sell the home after it’s appreciated.

Indiana is a high cash flow state. Real Estate pro, Brian Buffini, once said “IF YOU WANT TO INVEST IN APPRECIATION, PUT YOUR MONEY IN SAN DIEGO. IF YOU WANT TO INVEST IN CASH FLOW, PUT YOUR MONEY IN INDIANA.” Put a little money in a down payment on a home and collect high cash flow from the rent. You have to maintain this investment home, or manage those maintaining it, if you do, it’s a great SUPPLEMENT to your income.

3. ECONOMY AND EMPLOYMENT

Check the health of the local economy and employment of a potential investment location. The biggest indicator of a local economy are the major employers that are stationed there. Find out what companies are in your potential location and ask yourself a couple of questions. Is there a diverse industry? Are the employers expanding or contracting? What does the rate of new business look like, and how does the job growth rate compare to the national average?

The midwest got hit hard in the 1980s during a time period of deindustrialization, but Fort Wayne has been fortunate to retain the industrial industry, with local manufacturers like General Motors and BAE Systems keeping thousands of citizens employed in that field.

The city has also diversified over the past 30-40 years, thriving from many other fields of business available such as transportation and logistics, healthcare (Parkview and Lutheran Hospitals!), financial services, distribution (Amazon!), and leisure and hospitality!

Other big-name companies that reside in the local area of Fort Wayne include Sweetwater Sound, Steel Dynamics, Swiss Re, Vera Bradley, and Franklin Electric.

Fort Wayne has also been deemed in the top 100 places in the United States to both live and retire according to Real Estate US News, and the #1 place to raise a family according to SmartAsset.

4. SALARY AND INCOME TRENDS

Your rent is going to depend on the average income in the area. Much like with upward trends in population, upward trends in median household income will translate into a greater cash flow from rent and a higher appreciation of the home value over time.

Fort Wayne’s median household income sits at $48,658 (last updated in 2018.) This sits well below the United States average wage, but the lower average is a contributing factor to Fort Wayne being the #2 most affordable place to live in the United States (realestate.usnews)

Over the past 10 years, the average income history shows a constant increase in the median household income, with the most recent charted number having risen in 4.4%. Again, this is a great sign so show that your cash flow will continue to increase alongside the appreciation of the home’s value here in Fort Wayne, Indiana.

5. PRICE TO RENT RATIO

The number you’ve been waiting for - the cash flow calculation. To calculate this number:

Average Monthly Rental Price / Average Home Price = Price to Rent Ratio

This ratio should help you determine how much monthly profit you’re actually going to get from a home! Let’s look at a 3 bedroom, 2 bath home with 1500 square feet.

City A: This will rent for $1,400 a month, and cost $150,000 to purchase. (1% ratio)

City B: This will rent for $3,000 a month, and cost $700,000. (.04% ratio)

At first glance, you might go after the home in a city that rents for $3,000, it seems like that one will generate more revenue, right? We have a different idea in mind! Rent out 5 properties in city like Fort Wayne that cost $150,000 each, and rent them out for $1400 a month. You’re going to see a $7,000 in rent every month instead of 3,000. Aim for markets like Fort Wayne where your ratio will fall at or above that 1%.

SOURCES:

https://realestate.usnews.com/places/indiana/fort-wayne

https://livability.com/best-places/top-100-best-places-to-live/2019/in/fort-wayne

https://www.wealthnoir.com/blog/finding-best-places-to-invest-in-real-estate/

https://datausa.io/profile/geo/fort-wayne-in/#economy

https://worldpopulationreview.com/us-cities/fort-wayne-in-population

https://realestate.usnews.com/places/indiana/fort-wayne