Rents in Indianapolis could double
May 1, 2007
Higher property taxes could force Indianapolis landlords to double the rents on thousands of apartments.
At one apartment complex, the 136-unit Monon Place, this year’s tax bill will be $278,552, up from $90,746 a year ago.
“If we were to pass through the full amount of a 207 percent tax increase, our residents theoretically might have to pay an additional $100 per month,” said Alex Jackiw, president of Monon Place’s owner, Indianapolis-based Buckingham Management.
Indianapolis’ average monthly rent of $763 for a two-bedroom, two-bath unit is certain to jump, reports the Indiana Apartment Association. The amount, though, is uncertain because some landlords are still awaiting the delivery of their property tax bills.
Some apartment buildings have seen their property tax bills decrease. At the 996unit CORE Riverbend, the tax bill dropped 20 percent, county records show.
Over all, though, tax bills have increased an average of 34 percent among all residential and commercial properties.
“The obvious question that we all face as landlords is, how can we absorb this? We have to seriously consider raising rents to compensate for these increases,” said John Hart, head of J.C. Hart Co.
Apartment owners have some alternatives to increasing rents. Landlords with deeper pockets could cut back on maintenance or trim services and amenities.
“None the options are good,” said Lynne Sullivan, executive director of the Indiana Apartment Association. Landlords also know that raising rents could cause some tenants to move to competing apartment buildings—or to suburban counties where the property tax bills may be less onerous. Marion County apartments already have a 10 percent vacancy rate.
About the Author: Bob Cain
Some 30 years ago Bob Cain went to a no-money-down seminar and got the notion that owning rental property would be just the best idea there is for making money. He bought some. Trouble was, what he learned at the seminar didn’t tell him how to make money on his rental property. He went looking for help in the form of a magazine or newsletter about the business. He couldn't find any.
Always ready to jump at a great idea, he decided he could put his speaking and writing skills to work and perform a valuable service for other investors who needed more information about property management. So Bob ferreted out the secrets, tricks and techniques of property management wherever he found them; then he passed them along to other landlords.
For over 25 years now, Bob has been publishing information, giving speeches, putting on seminars and workshops, and consulting for landlords on how to buy, rent and manage property more effectively.
