Investors own half of rental homes in five Central Indiana counties, alarming housing advocates

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Investment companies own nearly half of all single-family rental homes in five Central Indiana counties, according to a new report on a growing phenomenon that housing advocates worry crowds out potential homebuyers from the market.

Corporate investors now lease more than 40,000 single-family rental properties in Marion, Hamilton, Hancock, Hendricks and Johnson Counties, a Fair Housing Center of Central Indiana study published this month found. Out-of-state investors, drawn to the Indianapolis area by relatively cheap real estate compared with other cities, own roughly one of two rental homes in those five counties.

This scenario means would-be first-time homebuyers may struggle to find properties they can afford because investors tend to target cheaper homes. Renters who sign leases with large investors may find their landlords reluctant to pay to keep up and or repair aging properties.

The study updates a previous FHCCI report that depicted Marion County as the epicenter of investors buying up homes with cash and turning a profit by leasing them. Now, the more recent analysis found, the surrounding suburban counties are following the same pattern. Investors own more than 28,000 homes in Marion County and a total of nearly 12,600 homes in the other four counties.

However, institutional investors, or corporate entities such as LLCs and investment funds, own just 8% of all single-family homes in the five counties, leading some in the real estate industry to argue the fears about outside investor ownership are overblown.

But FHCCI Director Amy Nelson told IndyStar regardless of how many properties such investors own, they pose a host of challenges to communities.

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Challenges of investor-owned rental homes in Indianapolis

Investors tend to buy homes in lower-income neighborhoods such as East Warren on Indianapolis’ far east side where investors own 102 of 304 single-family homes, the report found.

Renters who want to live in the area have little choice but to lease from companies that can be lax about making repairs and rack up safety violations, a prior IndyStar investigation found. Often, these landlords evict tenants at high rates, Nelson said.

Investors pay cash for more than 80% of the homes they buy, according to the report, outcompeting most other buyers who can offer only a traditional mortgage loan to finance the deal.

Prospective buyers are left with fewer options and often have to resort to renting at steep prices, Nelson said. The median cost of renting a single-family home across the five counties is about $1,800 a month, the report found.

As the median sales price of a home stays above $300,000 in Central Indiana, according to Indiana Association of Realtors data, investors target cheaper properties that are among the few homes in reach for first-time buyers. Investors make up nearly a third of buyers in homes that sell for under $250,000.

“Not only do they buy in cash, but they essentially take these homes out of the home-buying market,” Nelson told IndyStar, “which takes away home-buying opportunities for individuals and puts them into expensive rentals.”

More: Why the Indianapolis area ranks as one of nation’s hottest housing markets in 2025

The ‘mega-investors’ who own Central Indiana’s rental homes

Seven companies, which the FHCCI labels “mega-investors,” each own more than 1,000 single-family rental homes across the area. That’s more than a third of all rental homes.

Four are private equity firms, which are criticized for putting short-term profits over the longevity of a business or community, Nelson said.

Here are the seven mega-investors and how many homes each owns in the five Central Indiana counties:

• Cerberus/FirstKey Homes: Cerberus, a New York-based private equity firm that manages properties through its business FirstKey Homes, owns 3,283 homes.

• Progress Residential/Pretium: Progress Residential, headquartered in Arizona and managed by Pretium REO, owns 2,826 homes.

• American Homes 4 Rent: A real estate investment trust based in Maryland that owns 2,681 homes.

• Tricon Residential/Blackstone: Blackstone, a New York-based investment firm, bought California-based Tricon Residential in 2024. Tricon owns 1,670 homes.

• VineBrook Homes: A privately held real estate investment trust headquartered in Dayton, Ohio, that owns 1,257 homes.

• Main Street Renewal/Amherst: A Texas-based real estate investment firm, Amherst operates its own property management company, Main Street Renewal, and owns 1,180 homes.

• SLB Investments/Job Capital: A privately held company headquartered in Indianapolis that owns 1,164 homes.

The largest companies often manage their own properties, but scores of local companies broker deals, lease properties and manage day-to-day operations on behalf of other investors.

One such firm, Red Door Property Management, oversees more than 600 homes around Central Indiana for smaller landlords who typically own fewer than 20 properties, helping to place tenants in homes and to do maintenance, Red Door owner Mike Taylor told IndyStar.

Many investors who lack experience in real estate are reluctant to pay for the most attentive property managers, Taylor said. Red Door, for instance, has walked away from negotiations because owners aren’t willing to invest more to ensure a home’s quality, he said.

Companies tend to fare better when they work with people knowledgeable about the local market and those who have a reputation to preserve, Taylor said.

“It’s our name on the line when we work with this tenant,” Taylor told IndyStar. “If we are giving them a bad experience because of an owner, we’re the ones who are going to get the bad review or the (Better Business Bureau) complaint. We have motivation to make sure that tenant is receiving good service and receiving a fair price.”

How many rental homes investors own in five Central Indiana counties

As of July 2024, here was the breakdown of single-family home ownership by county:

• Marion: Of 58,554 single-family rental homes, investors owned 28,131, or 48%.

• Hamilton: Of 10,859 single-family rental homes, investors owned 4,583, or 42%.

• Johnson: Of 6,843 single-family rental homes, investors owned 3,263, or 48%.

• Hendricks: Of 6,661 single-family rental homes, investors owned 2,982, or 45%.

• Hancock: Of 3,905 single-family rental homes, investors owned 1,754, or 45%.

Email IndyStar Housing, Growth and Development Reporter Jordan Smith at JTsmith@gannett.com. Follow him on X: @jordantsmith09

This article originally appeared on Indianapolis Star: Why investors own thousands of rental homes in Indianapolis area