Indiana Rental Portfolio Guide
What you need to know before building or growing a rental portfolio in Indiana — property tax burden, state income tax, security-deposit rule, source-of-income law, and the metros that actually cash-flow after accounting for local taxes.
Tax burden on Indiana rentals
Property tax
0.83%
effective rate on median home value
At 0.83% effective, the property tax burden sits in the lower half nationally (rank 22 of 51). Modest annual carrying cost keeps cash flow projections realistic on median-priced homes.
State income tax
3.05%
top marginal rate
A top marginal rate of 3.05% is low nationally. Rental income taxed at this level leaves more of each dollar of cash flow after federal tax, and 1031-deferred gains eventually pay this rate on recapture.
Security deposit rule
No statutory cap on security deposits. Landlords set the deposit at whatever the market accepts — typically one to two months' rent, sometimes more for higher-risk applicants or pets. Local ordinances may still apply.
Deposit rules change; verify current statute before drafting a lease.
Best cash-flow markets in Indiana
Modeled monthly cash flow on a median-priced single-family purchase at 20% down, 30-year fixed, using Indiana’s 0.83% effective property tax rate plus 25% of rent for insurance, maintenance, vacancy and management.
| Market | Median price | Median rent | Annual property tax | CF / month |
|---|---|---|---|---|
| Peru, IN | $163,193 | $976 | $1,355 | $-236 |
| Marion, IN | $156,372 | $886 | $1,298 | $-263 |
| Terre Haute, IN | $167,654 | $966 | $1,392 | $-270 |
| Muncie, IN | $171,820 | $961 | $1,426 | $-299 |
| Richmond, IN | $173,900 | $870 | $1,443 | $-379 |
| Kokomo, IN | $194,129 | $1,000 | $1,611 | $-402 |
State median across the metros: $251,007 home, $1,049 rent, $-580/mo modeled cash flow.
Track your Indiana rental portfolio
The Pro Portfolio Tracker rolls up every property in your portfolio, auto-revalues them monthly against local price data, and flags DSCR risk and equity milestones. Each Indiana property carries the state-specific tax burden shown above through to the cash flow calculation.
Property tax rate: Tax Foundation. Security deposit rule: state statute. Verify current law before making decisions — statutes change and this page is a planning reference, not legal or tax advice.