Owning a rental property in Indianapolis, Fishers, Carmel, or Kokomo can be a rewarding investment, thanks to the area’s steady job growth and strong rental demand. But even the most experienced landlords can be caught off guard by certain hidden expenses. Here are five commonly overlooked costs and how to prepare for them to protect your ROI.
1. Property Maintenance and Repairs
Indiana’s four-season, bipolar climate can be tough on properties. From icy driveways and roof damage in the winter to landscaping and HVAC upkeep in the summer, small issues can quickly become expensive if ignored. Landlords should expect to spend about 1–2% of the property’s value each year on maintenance and repairs.
Budgeting Tip: Build a maintenance fund equal to one month’s rent annually. Stay proactive with seasonal inspections and preventive maintenance to keep costs predictable.
2. Property Taxes and Insurance
Property taxes in Central Indiana vary by county, higher in places like Carmel and Fishers, lower in areas like Kokomo. Rising home values can mean higher assessments over time. Add to that landlord insurance, which typically costs more than a standard homeowner policy since it covers tenant-related risks and loss of rent.
Budgeting Tip: Review your property tax assessments every year, and don’t hesitate to appeal increases. Revisit insurance policies regularly to ensure you’re getting the best coverage for your investment.
3. Turnover and Vacancy Costs
Vacancies are one of the biggest profit killers in rental ownership. Each turnover may bring cleaning, painting, advertising, and lost rent. On average, it can take 3–6 weeks to fill a rental in Central Indiana, depending on pricing and location.
Budgeting Tip: Plan for at least one month of vacancy per year. Reduce turnover by offering a well-maintained home, clear communication, and quick response times to maintenance requests.
4. Marketing and Tenant Screening
Finding the right tenants is crucial to protecting your investment. Poor marketing or weak screening can lead to longer vacancies or problem tenants, both of which cost more in the long run. High-quality listings with professional photos and strong tenant vetting help reduce risk and attract reliable renters faster.
Budgeting Tip: Invest in professional marketing and screening services. Partnering with a local property management company can help you find qualified tenants faster and keep occupancy rates high.
5. Unexpected Repairs and Emergencies
No matter how well you plan, surprises happen, from burst pipes to malfunctioning furnaces in the dead of winter. Without an emergency fund, these expenses can hit hard.
Budgeting Tip: Keep 5–10% of your annual rental income in reserve for emergencies. Regular inspections can help catch issues before they become major expenses.
Planning for Success
Central Indiana continues to be a strong market for rental investors, offering stable growth and high demand. By understanding these often-overlooked expenses and budgeting wisely, landlords can protect their cash flow and maximize returns. Working with an experienced local property management team ensures your investment stays profitable, compliant, and stress-free.
Ready to let us manage your property while you sit back and enjoy life? Contact us today.