May 2025 Economic Insights: Big Changes Reshaping the Indianapolis Rental Landscape
Each month, Red Door Property Management unpacks the most impactful economic developments affecting rental investors across the Indianapolis metro area. The May 2025 update brings big news from Carmel, Kokomo, and the west side of Indy, all of which hold significant implications for future rental property growth.
🔌 Kokomo’s EV Battery Boom Could Power the Next Rental Surge
Stellantis and Samsung SDI have doubled down on Kokomo, Indiana with a combined $6.3 billion investment into two EV battery plants. The latest $3.2B facility is expected to create 1,400 jobs by 2027, adding to the identical first-phase project already underway. This shift positions Kokomo as a critical manufacturing hub and opens the door for housing demand to spill into northern Indy suburbs.
With travel times to Kokomo from Indianapolis cut to under 45 minutes via US-31, investors should consider nearby cities like Westfield, Noblesville, and even Zionsville for long-term rental demand. Red Door is already watching Kokomo for a potential future expansion.
🏨 West Side Airport Growth: New Hotel, New Opportunity
The Indianapolis Airport Authority has approved a 253-room Westin-branded hotel with a rooftop lounge and 10,000 sq. ft. of meeting space, slated to open by late 2027. This $25 million project promises a wave of hospitality and construction jobs, bolstering demand for nearby short-term rentals.
If you own or are considering a short-term rental on the west side, this is the time to prepare. Expect extended stays from corporate contractors and project teams beginning in 2025.
📉 Affordability Gap Widens: Renters Rise, Buyers Stall
According to Axios, as of May 2025, homebuyers in the Indy metro need to earn over $25,000 more annually than renters to afford a median-priced home. That’s a 4% increase over last year, outpacing rent-affordability increases. In short:
- Homeownership is increasingly out of reach
- More households are choosing to rent
- Rental demand is projected to remain strong through 2025 and beyond
This trend supports long-term investor strategies focused on buy-and-hold rental properties, especially in affordability-stable submarkets like Avon and Brownsburg.
🚨 Carmel Rental Cap Ordinance Passed
Breaking news: Carmel has officially passed a 10% rental cap ordinance, mirroring Fishers' recent policy. Starting January 1, 2026, only 10% of homes in any neighborhood may be used as rentals. Key takeaways:
- Properties must be registered by December 31, 2025
- Cap applies only to single-family rentals—not multifamily or build-to-rent
- Grandfathering protects current investors—but only until the property is sold
Want to get in before the door closes? Check out our property management services (coming soon!) or contact us about investing in Carmel before 2026.
💡 Home Place: Carmel’s Hidden Investment Gem
In the center of Carmel lies a surprisingly undervalued submarket: Home Place. Average home prices here sit around $400,000—nearly $200K less than the broader Carmel average of $650,000. With a new city-led refresh of the district underway, Home Place could deliver high appreciation potential for investors who act fast.
This is an ideal play for long-term appreciation—think low inventory, desirable schools, and early-stage gentrification. And with the 2026 rental cap deadline looming, this could be a last-chance buy-in for rental eligibility in Carmel.
📈 What This Means for Investors
The May 2025 economic insights reinforce a few critical takeaways:
- Rental demand is stable across Central Indiana as buying becomes less affordable
- Policy changes like rental caps in Fishers and Carmel are limiting future rental inventory
- Hidden markets like Home Place and Kokomo offer early-entry advantages
Looking to maximize your returns in a shifting market? Partner with Red Door Property Management for expert guidance, hands-on support, and localized insight in Indy’s most promising submarkets.
🔗 Additional Investor Resources
- Browse Available Homes for Rent in Indianapolis
- Fishers Property Management
- Get a Free Property Management Quote
Stay ahead of policy shifts and market movements—follow Red Door Property Management for monthly insights into Indy’s most investor-friendly rental trends.
Transcript Here
Introduction and Hosts
All right. Welcome back everybody. This is Red Door Property Management Podcast. My name is Chris Knight. I'm the business development manager here with Red Door Property Management, and I am joined here with Mike Taylor, owner of Red Door Property Management. Mike, how are you? I'm doing really good today, Chris, how are you doing?
I'm doing pretty good until I found out that we almost look identical today in in today's podcast. I think this is two months running, isn't it? This is getting ridiculous. They're gonna think we have something like we plan this out, like we're trying to match each other. That is not the intention for this podcast for us to look identical.
We do not have any prior setup to wardrobe. So this is all, we might need to start doing that, though. We might need to start, we might need to start doing that.
Podcast Overview and Segments
But anyway the Red Door Property Management Podcast is all about bringing you economic updates, and we've got a few new segments.
That we have introduced over the last couple months, so not so much new anymore, but we're gonna get into economic updates. We've got this month's question of the week, which always dives into questions that I personally receive all the time that maybe the question is asked wrong or we dive into it a little bit deeper so we can get the owner's point of view.
The business development managers. Point of view and you can maybe get these questions answered even prior to reaching out to your prospective property management company. So that is what this is all designed to do. And then the last segment that we are wrapping up the podcast with is this month's rather last month's market update.
This month's market update, however you wanna look at it. I guess it's this month's market update based on last month's market data. That is what we're gonna get into. And that also includes, by the way, sales data as well as the rental data so that you can see. Stay informed and make informed decisions because maybe you are currently working with a property management company that does not stay informed.
So that's what this is designed to do. We are going to dive right into it.
Economic Update: Indianapolis Metro Area
So we are going to get into the economic market update for the Indianapolis metro area. And all right, let me dial it down here a little bit. I'm gonna go ahead and start here, Mike, and then get some of your con yeah, your content along the way here.
Let me start here. Now this first economic update is not, it's not really new. This has been reported for some time now. In fact, I'm not even completely sure how far along they are in this facility here. I do know that they won't start production until 2027, but I'm sure. That the hiring has already started to take place, and now this is in a suburb that's a little bit further north of Indianapolis, but without a doubt is going to affect the Indianapolis housing market, I'm sure.
Kokomo's EV Battery Plant Impact
Stellantis and Samsung SDIs $3.2 billion EV Battery Plant in Kokomo. Mike, I know that you've heard about this before, right? Yeah, for sure. Okay. Alright, so here's my little snippet that I've clipped here from the article itself. So here we go. Stellantis, in partnership with Samsung, has announced plans to build a second electric vehicle battery manufacturing facility in Kokomo, Indiana.
This $3.2 billion investment is expected to create approximately 1400 new jobs. The plant is slated to begin production in early 2027. This follows their first joint venture in Kokomo, a $3.1 billion facility. Also projected to create 1400 jobs scheduled to open in early 2025. So these developments position Kokomo as a significant hub for EV battery production in North America.
So huge employment opportunity in just north of Indianapolis, but without a doubt is going to result in some housing opportunities in the north side of the Indianapolis market. What do you think? That's so
funny, Chris. I've actually been thinking about Kokomo recently and it's Hey, should we start thinking about exposing Kokomo?
We had a little stint in Kokomo, we toed that was we toed 10 years ago, right? Totally different. Yeah. Totally different landscape. And with I think a couple developments like e it sounds simple, but even with, you know what? Carmel has done with us 31 and what they've done with 31. You can go from 4 65 to Kokomo in 28 minutes if you drive fast. What I mean, you breeze right through it.
Now. I know it's
so different. Yeah. So it's such a difference maker. In terms of commute, in terms of who's working there, where are you living? It's, I think it might be really time to explore Kokomo again, especially with new jobs being added.
I don't honestly know a ton about the market up there because it's not an area that we service. We don't have a ton of clients that, that, that talk to us, but it might be something that we wanna start exploring and start pushing to our investors, because I think, especially with jobs like this I know there's a housing shortage up there, so I don't wanna pretend like I'm the forefront expert on Kokomo.
I know those are your old stomp grounds. Maybe you have some, it's some insight. For us.
Yeah, so those of you that don't know, that is where I hail from. So born and raised in Kokomo. And then so I got so good at my job. I just needed a bigger market to with so I jumped into Indianapolis. Mike was gracious enough to offer me an employment opportunity here, and I've stuck with it ever since.
And this is probably where I will die, but I hail from Kokomo. And so I know a fair amount about Kokomo and it has just exploded in growth over the last 10 years. And with this new development and I expect these new developments to only continue in the Kokomo and surrounding area.
Yeah, exploring that as an opportunity. I think you even, didn't you purchase a house in Kokomo and flip one or something like that early on?
You know what? We explored it, but it never went through. We tried to make it happen, but it just didn't, it just didn't
happen. Interesting. Okay.
Yeah. Yeah, I think that's definitely an opportunity. And and if you're interested in what's happening, at least on the ground as far as phone calls, I do get occasional phone calls from owners interested in management in the Kokomo area. And of course we currently turn those away.
So if you are. Looking in the Kokomo area breaking news, this might be an area that we're expanding to in the future. So it is on our radar. But back to the economic update, this is a huge development and just like Mike said, because of the corridor there, the 31 corridor that you can easily travel from Kokomo to Westfield or Carmel, where a lot of those people are gonna end up residing.
North side of Indianapolis is a great opportunity, I think.
Even getting to India. You could even live in Kokomo and work in Indy. I don't think, correct me if I'm wrong, you may. I don't go up there a ton, but I think you can get to Kokomo from 4 65. Without hitting any lights. Is that true?
Oh, there's one or two. There's a couple.
Yeah. Right through what is that? The caramel area where the Walmarts and everything, and we're gonna get into the, some of the weeds here. Yeah. Oh yeah. There's one, maybe two, but once, once you're past that, it's Yeah. You're all the way down.
Yeah. They've,
it's minimal. You're flowing. The traffic is flowing.
Absolutely. Yeah. What used to take about an hour and 15 minutes from the Indianapolis area is probably about 45 minutes. You can get straight to Kokomo. So that's what's happening on the north side of Kokomo.
Now I've got a couple more stories here that I'm gonna quickly read and get Mike's perspective on. Alright. More in the Indianapolis West side area.
Indianapolis Airport's New Hotel Project
Indianapolis International Airports new $205 million hotel project happening here on the west side. The Indianapolis Airport authority has approved the construction of a new 253 room, Westin branded hotel connected to the terminal parking garage at Indianapolis International Airport.
The $205 million project will feature a full service restaurant, a seventh floor lounge with airfield views, a fitness center, approximately 10,000 square feet of meeting space. Groundbreaking is expected in the spring of 2025 with completion anticipated by December of 2027. So this development is projected to create numerous construction and hospitality jobs, enhancing the airport's amenities, and contributing to the local economy.
As we've continued to see. West side growth. And so if you stayed in tune with the west side roundup that we do in the EC or the market reports rather you will very likely see some some continued changes developed around this specific economic update. Mike, thoughts on that?
Have you heard about this?
Yeah, I've heard about this. I love it. Tons of economic activity there. If you own a short-term rental on the west side, you're probably gonna see some workers coming in and Exactly renting that for the next few years. And I don't know how long that project is gonna be, but we get a lot of those in the homes that we manage is, construction workers coming in and need a extended stay.
So those are great, especially in the winter. Yeah. All great news. I love to hear that. That has been indie, I don't know Achilles heel if that's the right word, but the, the airport and. We're not as connected as That's right. Chicago, it's so hard.
Like every time we go somewhere major, we drive outta Chicago. We go Chicago. Yeah. And so there's just a little bit of lack of connectivity. So I love to see it. I'll just piggyback on that. This is not breaking news, but there's now a new international flight to Dublin direct from Indy.
Just adding more and more flights. I think that was. Kicked off by, I think Lily has a big presence over in Ireland, so I think that helped push it through, but it's just great to see growth in terms of the airport in terms of added international flights. So I just love it. I think it's great.
I. I'm constantly seeing new updates resulting in just connecting flights through Indianapolis or no, what's the word I'm looking for? Where there's no connect. There is no connector. The direct flights. Thank you. Direct flights. Yeah. Yeah. Direct flights. So that's constantly.
That's constantly happening in the Indianapolis airport arena. So that's what's going on the west side. Stay tuned for the West side Roundup and continue to follow that over the following months. All right, I've got one more that pertains a little bit more to the economic standard of Indianapolis.
So here we go.
Affordability Gap in Indianapolis Housing
Affordability gap widens between buying and renting in the Indianapolis area. So a recent report by Axios highlights the growing affordability gap between buying and renting homes in Indianapolis, Carmel Anderson metro area. As of May, 2025, prospective home buyers need to earn over $25,000 more annually than renters to afford a median priced home in the area.
This disparity is driven by rising home prices, higher mortgage rates, and the limited. Housing supply, which I'm not so sure is very limited anymore, but we'll get into that argument later. Here we go.
With the
doom and
gloom. Yeah.
Alright. Alright here, almost done. Here. The required household income to buy a medium priced home is increased by nearly 4% over the past year, slightly outpacing the 3.5%.
Rise in income needed to afford median rent. This trend underscores the challenges. First time hire buyer home buyers face in entering the market influence decisions to rent rather than buy. So the renting market remains strong while the buying and home buying efforts remain pretty difficult to achieve.
So that's what's happening. Any comment on any of that? I think that's probably information we probably are
all aware of. Nothing earth shattering kind of more of the same, but to me it just bolsters, bolsters for investors because you're just gonna see more renters. We've seen this has been the trend and it's, I think, gonna continue to be the trend, especially with interest rates.
Where they are, prices where they are. It's just more of the same, but it's just hey there this is becoming more and more a renter nation. So
it's that's the point I wanted to highlight for
investors, honestly.
Exactly. It's good news for investors. We continue to be more of a trending towards a renting type nation.
So if you're an investor in real estate, this is probably good news for you and that, that's gonna wrap up my economic updates. Mike, what do you have on your table? I.
Alright, I got two. I think I'm gonna shock you, Chris, on the area that I'm gonna talk about because we never, ever talk about it.
Okay. In terms of a submarket.
Okay. I'm excited.
Carmel's New Rental Cap Ordinance
I'm gonna talk about Carmel. Okay. I have two things with Carmel and we haven't talked about this. This is like breaking news as of two days ago. But Carmel has followed suit with Fishers and passed a single family rental cap. Ordinance basically from what I can tell, it's the exact same ordinance that fishers has passed.
It's 10%. You've gotta be registered you have to be registered if you do have a rental that's grandfathered in. So everything that I've read. Pretty much mirrors fishers. So they did not mess around with the timing. It was a nine to oh vote. So there was lots and lots of support for this. We don't talk about Carmel typically because from an investor it doesn't make a lot of sense.
But I'm gonna talk about that in a second too. So I guess I just, I think last week or last month I said, this could be the story of the year. And it's shaping up to be that way that 'cause quickly Carmel passed it. And if you don't think that Westfield Noblesville, at least all the other north side ones and I'm sure it's gonna catch fire and go to, the west side, all the suburbs, all the donut counties.
I think that this is gonna continue the trend. Can they move as quickly as caramel? I don't know. But. This is definitely a story to watch. It's developing, and I believe that we're gonna see these rental caps really throughout at least Hamilton County, if not everywhere. I don't, I haven't heard much of it happening in Indy.
But I think that this is definitely a story to watch.
Yeah. Yeah. I couldn't agree more with everything you've said there. I think it's going to continue to expand. I've seen talk in all these Facebook community pages. All, all, a lot of the current citizens are arguing for it.
And I I understand why it's these major corporations that are picking up and they just don't monitor 'em very close. I think that's what's driving a lot of this effort. So we'll see where this continues, and if it does continue. I think it could arguably result in more of these full rental neighborhoods being developed.
Because I would imagine that these rental caps don't pertain to something like that. For what? I'm sorry. Just these neighborhoods that are developing that are just nothing but rental properties.
Oh, build to rent. Yeah. I pretty sure those are excluded. Multifamily is excluded. I think this is, single family homes in subdivisions.
That's what they're targeting.
Yeah. So you're inevitably going to see more of those communities be developed.
I would think so. The other thing too that I, and I don't wanna gloss over that because I think it's a big story, but we're gonna just have to continue to watch it. The other story is also related to Carmel.
Investment Opportunities in Home Place, Carmel
And I. I think maybe we've, I know I have overlooked this as a potential investment and especially with this 10% ordinance coming in. Do you know where Home Place is, Chris? You heard of Home Place? I've heard of it. No, I don't know where it is. Okay. So lemme give a little bit of background for you and for the listeners.
So Home Place is it is like roughly in terms of geographic, it's like between 96th and. I think a hundred 11th, let's just call it a hundred 16th. That's and then like college and Westfield. So it's like just north of 4 65 and like the center of Carmel. It used to be its own, I don't.
Town. I'm not sure if that's even the right word, but anyway, I dunno how many years ago, but Carmel worked really hard and they annexed it, so they basically took over. And there's probably some history there that I need to brush up on, but that's not really important for this. But now it's part of Carmel, it's Carmel Services, Carmel Schools, all of that.
And it is typically been a caramel is. Typically a higher end community. And that's why we don't talk about it on this podcast because it doesn't make, it doesn't make sense for investors. But Homeplace is a very affordable part of Carmel. It's always been a little bit more working class that kind of stuff.
So the, carmel is now I don't know if redeveloping it, but plan to refresh home place businesses district in the works. Okay, so here, seven years after Home Place neighborhood lost its long annexation battle and was absorbed into the city. The community's business district along college is set for a refresh that residents hope will leave it feeling like home.
So there's like this like dichotomy of the people who live there want it to maintain this yeah, this small hometown feel. But what I see is an a, a potential for investors. Carmel doesn't do anything less than all the way. Yeah. So if you're gonna start to see Carmel redevelop as what I'm reading here now may a great time to invest in home place.
So it sounds like they're gonna start investing into these roundabouts like they have everywhere else, Uhhuh and really gentrifying the area. 'cause it does need it. It's. I dunno if I'm, call it rundown, but it's not as nice as the other parts of Carmel. And so I see an opportunity for investors here because the average home price in home place is significantly less than Carmel.
And this isn't gonna be a cash flow play. Let, lemme just show you something here. Lemme share the screen, Chris, for you just to illustrate what I'm talking about. And I don't wanna go too far on this economic insights, but I think this is probably worth it. 'cause I see an opportunity here for investors.
I. Especially with this is this rental cap here,
and while you're pulling that up yeah. So the rental cap that you were talking about in the previous the the previous article, yeah. Is that slated to begin in 2026. January, 2026. And if so, we're talking about making acquisitions between now and then.
Yep. Okay so if you are interested in acquiring something, you better move pretty quick.
Yeah, a hundred percent. Yes, that's what it is again it's kinda like a mirror image of of Fisher. So yes, starts January, 2026. Everyone else before then is grandfathered in. Lemme just show this here real quick for you.
Chris, can you see my screen? Yeah, we got it. Alright, cool. I'm gonna go to I'm gonna do, this is our MLS. And actually what I'm gonna do here is first is this. I'm gonna do market stats. I'm gonna show you real time the average, oops, I'm gonna go sold homes in Carmel. A real behind the scenes look at behind the scenes.
Look, I'm gonna go back a year. Let's see it's the fifth today, so I'll go back 6, 4, 20, 20. 4, 2, 6, 5. So this is the past 12 months in Carmel. No active listings. What did I do wrong? Oh, we fumbled it right here. Oh, because I typed carbon instead of Carmel. There we go. That's it. All right. So here we go.
I don't want to go over all these numbers, but here's everything that's sold in Carmel. There's 1500 homes. The average sales price in Carmel's 6 51, 943. Wow. Wow. Okay. Crazy. So let me just do a real quick search here and show map and this will be good 'cause it'll show people where I'm talking about.
So if you see caramel here,
oh yeah, this is beautiful.
Okay, so caramel, so it's gonna be like right around here. Like I said, in the center of caramel, so it's like right here. This is, I'm gonna, I'm gonna draw a rectangle around it. So it's roughly between college and Westfield and a hundred 11th and 96.
That's roughly home place. Okay. Okay. If, yeah, I go oops, lemme go back here. Sorry guys. Fun going through this here a little bit. I don't want the active homes. I want the sold homes for the last year. Okay. And.
View results. Go here. Quick stats. Total. So sold 72. Look at those prices. Yeah, look at the prices. That's what I'm saying. Look at those. Geez, so the average price is 400, so it's $200,000 less than the average in caramel. I haven't even capped it. There's, there are homes that, max is 8 61.
If I put, if I took those outta there, you got a house in caramel for 180 is what I'm trying to say here.
Wow.
Median is 3 47. The average is 400. We don't talk about it, but there is potential here in this Carmel area, especially. With this redevelopment happening where there's some potential.
Now, again, this is probably not gonna be a cash flow play. You're probably gonna hopefully maybe break even something like that. Maybe make a few bucks. But this is an appreciation play. Carmel appreciates probably, I. Better than anywhere in central Indiana. And we talk about it some, but we don't talk about it a ton where cashflow is only one aspect of investing in real estate.
There's appreciation there's depreciation, there's all of those things, the tax consequences. So this is, this would be somebody who wants to hedge against inflation. And realized the appreciation while doing the depreciation and paying down the mortgage and of course, all that kind of stuff.
Anyway, that's all I wanted to highlight. I don't wanna spend too much time on it, but I think there's an opportunity here in Carmel, which we never talk about. So that's incredible.
What an awesome deep dive. Yeah. That is really crazy. Just scroll down really quick here.
I just wanna get a glance and get that capture here on the recording. If you can you scroll down on your your, my boy screen
here?
Yeah. Yeah. Scroll down. I just wanna see a couple more of the houses there listed.
Oh, I see. Yeah, so 1 92. 32, this is in Carmel, this Carmel schools.
A house in Carmel for 1 98. Now this is a little dinky house. I wouldn't buy a house that small personally, but here's one at 1200 square foot home that's perfect. $235,000. If you don't think that's gonna remain desirable forever. There's always the affordability.
There's nothing affordable, not affordable, nothing affordable. This is gonna be affordable for somebody that is always gonna be in demand. Your days on the market for a house like this is gonna be like. Sub 15, I would guess.
Yeah. That's incredible. What an awesome deep dive, Mike. Yeah thanks for showing that to us.
Yeah I guarantee that every every viewer here is gonna appreciate that. That's really cool. Yeah. What an awesome deep dive. Act quick though that rental cap is gonna kick in 2026. And is there any, I know that there's efforts by the state to try and stop any of these additional suburbs from instituting any more of these?
Is there, have you heard any more on that front? I.
No, I haven't heard too much more on that. But again, just, from last month is if these cities get this in place before the state makes their effort unwinding, it is all but possible. Yeah. Wishers and Carmel, that, that ship has sailed. I don't know what the other ones can do quickly enough, but no I don't have any update on what the state's doing.
Okay. All right.
Conclusion and Final Thoughts
Any other economic updates on your desk? Those are the big ones for today. Okay. All right. That's gonna wrap up our economic updates for the Indie metro area.
