Why Indianapolis works for buy-and-hold investors
Indianapolis has long been a favorite of rental investors, and the reasons are structural: moderate prices, a large and steady renter population across Marion County and the surrounding counties, landlord rules that are set statewide and move quickly, and one feature almost no other state has, a constitutional cap on property tax.
Those same features make the rental math more predictable than in most metros, which is exactly what a DSCR loan rewards. This page explains how the cap works on a rental, why the seller's tax bill is the wrong number, Indiana's landlord rules, and how our lending partners finance buying, renovating and refinancing in the Indianapolis area.
The 1-2-3 property tax cap
Indiana's constitution caps property tax bills as a percentage of gross assessed value: 1 percent for an owner-occupied home, 2 percent for other residential property, including rentals, and 3 percent for most other property. Taxes approved by voters in a local referendum can be added outside the cap.
For a rental investor this does two things. It puts a ceiling on the largest holding cost, which makes a rental's numbers more predictable than in most states. And it means the bill can double when a house goes from an owner's home to a rental, because the cap goes from 1 percent to 2 percent and the homestead deductions fall away.
So never use the seller's homestead tax bill for a rental. On a house assessed at $200,000, the 2 percent cap allows up to about $4,000 a year before any referendum levies, against up to $2,000 for an owner-occupant. A DSCR loan counts the full tax in the payment the rent must cover, so size the loan on the rental figure.
Indiana's landlord rules and closing costs
Unpaid rent: a ten-day written notice to pay or leave, then an eviction case in court.
Security deposits: returned within 45 days after the tenancy ends and the tenant gives a forwarding address, with an itemized list of damages.
No transfer tax. Indiana does not tax the transfer of real estate; a sales disclosure form is filed with each sale instead, and it is how the assessor learns your purchase price.
Foreclosure goes through the courts in Indiana, which is slower than a trustee sale and part of why lenders look closely at the exit on every Indiana file.
Have a deal on the table?
Send the address, the numbers and your exit. Our lending partner's team reviews it and tells you whether it fits and on what terms. The lender makes every credit decision.
Buy, renovate, rent, refinance
Many Indianapolis investors use a two-loan plan: a fix and flip loan to buy and renovate, then a DSCR loan to refinance once the house is rented. Our lending partners offer both. The refinance is sized on the new appraised value and the rent, so the plan only works if the renovated value supports it and the rent covers the full payment, including the 2 percent tax figure and insurance.
Watch the loan floor at the cheap end of the market. The short-term loan minimum is $50,000, and with the loan capped at 70 percent of after-repair value, a renovated house needs to be worth roughly $72,000 or more to support even the minimum loan. Some Indianapolis streets sit close to that line.
More on how the refinance works, with numbers, in our guide to getting a rental with little money down.
Our lending partners' terms in Indianapolis
Fix and flip and bridge loans: standard pricing starts at 12.99 percent plus 2.99 points. Loans start at $50,000 with a 600 minimum credit score, and cover up to 100 percent of cost but no more than 70 percent of after-repair value, whichever comes first. Leverage depends on the experience you can document over the past three years. Loyalty pricing of 10.99 percent plus 1.99 points is available only after two loans have been paid off with the lending partner in good standing.
DSCR rental loans: no minimum credit score, from $75,000 to $2 million, up to 80 percent of value on a purchase or rate-and-term refinance, qualified on the rent.
Loans are for non-owner-occupied investment property and close in an entity such as an LLC or corporation. The lender decides each file, and terms are confirmed for your property before you commit.
Holding an Indianapolis rental? Our two free landlord books compare what a rental costs to carry across the states.
Send it through the form above and our lending partner's team will tell you which program fits.
Related guides
Indiana · Cincinnati · DSCR rental loans · DSCR requirements · Illinois
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Questions Indianapolis investors ask
Can I get a hard money loan for an Indianapolis flip?
Yes. Our lending partners finance non-owner-occupied investment property in the Indianapolis area from $50,000, with a 600 minimum credit score, up to 100 percent of cost and no more than 70 percent of after-repair value. Standard pricing starts at 12.99 percent plus 2.99 points. The lender decides each file.
How much property tax will I pay on an Indianapolis rental?
Indiana's constitution caps a rental's tax bill at 2 percent of gross assessed value, against 1 percent for an owner-occupied home, before any voter-approved referendum levies. On a $200,000 assessment that is up to about $4,000 a year. Do not use the seller's homestead bill.
Does Indiana charge a transfer tax when I buy or sell?
No. Indiana has no real estate transfer tax, though a sales disclosure form is filed with each sale.
How fast can I evict for nonpayment in Indianapolis?
Indiana uses a ten-day written notice to pay or leave before you can file an eviction case in court.
How long do I have to return a security deposit in Indiana?
Within 45 days after the tenancy ends and the tenant provides a forwarding address, with an itemized list of any damages deducted.
Can I refinance an Indianapolis rental with a DSCR loan after rehab?
Yes, if the numbers support it. A DSCR loan is sized on the appraised value and the rent, up to 80 percent of value, with the lender setting any lower cash-out limit, and the rent has to cover the full payment, including the 2 percent tax figure.
Sources
- Indiana Code 6-1.1-20.6, property tax credits (circuit breaker caps), the 1, 2 and 3 percent caps on property tax liability (accessed Oct 2026)
- Indiana Code 32-31-1-6, the ten-day notice for nonpayment of rent (accessed Oct 2026)
- Indiana Code 32-31-3-12, the 45-day security deposit return and itemized damages list (accessed Oct 2026)
- Indiana Code 6-1.1-5.5, the sales disclosure form filed with each conveyance (accessed Oct 2026)
- Indiana Code 32-30-10, judicial foreclosure of mortgages (accessed Oct 2026)
Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners. All financing is arranged for business purposes only and secured by non-owner-occupied investment property. Not a commitment to lend. All loans subject to underwriting, property review, and approval by the lender. Terms vary by property, borrower experience, and exit strategy.