Red flags / Yellow Flags for real estate investors in Central Indiana

Out-of-area investors continue to find the greater Indianapolis area to be a good place to build their portfolio of single family homes.   The Indianapolis-Carmel Indiana MSA consistenly performs well as an affordable housing market.  That means that home pricing is supported by the income that families in the area earn.  That is a good measure for both homeowners and single family investors.

But when investors are evaluating single family properties to consider adding to their portfolio, it is helpful to use agents whose skills include some background in construction - while still knowing how to navigate spreadsheets.

Of course the condition of the house, and the numbers are very important.  But part of the property evaluation would include factors about the surrounding area.  I will review several possible red flags and yellow flags.  There is no right answer or wrong answer.  Each investor needs to determine how these factors mesh with their investment objectives and strategy.

1. High tension wires (back yard or certain distance away)
2. Power line tower fall radius
3. Location of railroad tracks or right-of-ways (active and inactive)
4. Proximity to airports and flight patterns
5. Cellular towers nearby
6. Proximity to busy highways
7. Backing up to multi family housing
8. Backing up to commercial or industrial properties
9. Backing up to farmland or vacant land that might have other uses in the future
10. Unfinished subdivisions - (were there problems that caused the builder to discontinue construction?)
11. Water close by, neighborhood ponds, nearby lakes, rivers or streams
12. Proximity to registered sex offenders (of course an offender could move in next door the week after closing.)

Some of these factors could be show stoppers.  Others might be concerns that are worth an evaluation.  Perhaps it would make sense to make sure that homes close to an interstate highway have had that factored into the price, and not being compared to other homes in the same neighborhood a half mile away. 

And some might consider some of these items to be positive.  The abandoned railroad right of way could become a well-regarded hiking trail.  Or the nearby cellular tower could mean there is great coverage.

But any investor needs to communicate with the broker locating properties about red flags and yellow flags.  They could be from the list above.  And of course there could be others.

To contact Dan Rosenberger about single family homes in Central Indiana, call the direct cell number: 317-225-5889.  Dan is the broker-owner of Harvest Realty and specialized in investment properties.