Becoming a landlord in Indianapolis can be one of the smartest ways to build long-term wealth — especially with the city’s strong rental demand, affordable entry prices, and steady population growth. But new landlords often underestimate how much strategy, communication, and systems go into running a profitable rental.

Whether you’re renting out your first single-family home, a duplex, or a small multi-unit, here are the five biggest mistakes new Indianapolis landlords make — and how to avoid them.

Mistake #1: Underestimating Operating Costs

This is the #1 rookie mistake.

New landlords look at rent minus mortgage and think, “Great — I’m cash-flowing!”
But real operating expenses hit harder than expected.

Common costs new landlords overlook:

• Insurance (which is rising fast in 2025)

• Property taxes

• Repairs + maintenance

• Capital expenditures (roof, HVAC, plumbing)

• Leasing fees

• Vacancies

• Utilities for shared spaces (in multis)

• Tenant turnover

• Snow removal / lawncare

Holding a rental is about net, not gross.
Using a 35–45% operating cost assumption is far more realistic for Indy rentals.

For more insight on rising expenses, check out:
Rising Home Insurance Costs Indianapolis 2025

Mistake #2: Choosing the Wrong Tenant Screening Process

A bad tenant can wipe out a year of cash flow in a single lease.
New landlords sometimes rely on gut feeling instead of a systematic screening process.

Your screening criteria should include:

• Credit score

• Income verification (3x rent is a common benchmark)

• Employment verification

• Rental history

• Eviction check

• Background check

• References

Consistent screening protects you and keeps everything compliant with fair housing laws.

In Indianapolis, a solid screening process is non-negotiable — especially in high-turnover neighborhoods or older rental stock.

Mistake #3: Not Setting Clear Lease Terms

Ambiguity leads to disputes — and disputes cost you money.

Your lease should clearly define:

• Who maintains the yard

• Snow removal responsibilities

• Who pays utilities

• Guest/occupancy rules

• Pet policies & deposits

• Parking rules

• Maintenance process

• What “wear and tear” actually means

• Late fee schedule

• Renewal timelines

A strong lease prevents 90% of tenant issues before they ever happen.

Mistake #4: Skipping Regular Property Inspections

Many new landlords avoid inspections because they don’t want to “bother” tenants.
But skipping inspections lets small problems grow into expensive repairs.

Your inspection schedule should include:

• Move-in inspection with photos

• Quarterly or biannual walkthroughs

• Renewal inspections

• Move-out inspection with photos

Inspections help you catch:

• Leaks

• Unreported damage

• HVAC filter issues

• Unauthorized pets or occupants

• Safety hazards

• Window or door issues

• Signs of moisture or mold

A 10-minute walkthrough can save you thousands.

Mistake #5: Treating Landlording Like a Hobby

Being a landlord is running a small business — and businesses run on systems.

New landlords who treat it casually often struggle with:

• Missed documentation

• Reactive repairs instead of preventative maintenance

• Poor bookkeeping

• Emotional decision-making

• Overpricing or underpricing rent

• Burnout

Set up systems for:

• Rent collection

• Lease renewals

• Maintenance reporting

• Vendor relationships

• Turnover timelines

• Recordkeeping

• Property evaluation

You don’t need dozens of units to operate like a pro — just consistency.

Bonus Mistake: Not Planning an Exit Strategy

Every rental needs an exit plan, even if you don’t use it for years.

Your exit options:

• Sell to an owner-occupant

• Sell to another investor

• Refinance and pull equity

• Turn into a BRRRR

• 1031 exchange into a larger property

Knowing your plan helps you make long-term decisions — not reactive ones.

Pro Tip for New Landlords: Consider House Hacking First

If you’re brand new to landlording, house hacking is one of the easiest ways to learn with lower risk.

Living in one unit while renting the others helps you:

• Learn tenant management

• Oversee maintenance easily

• Reduce your own housing cost

• Build equity faster

• Position yourself for your next investment

If you’re considering this strategy, check out:
How to House Hack in Fountain Square

FAQs: New Indy Landlords

How many months of reserves should a landlord have?
At least 3–6 months of expenses per property.

Should landlords allow pets?
Pets increase wear and tear, but often increase rent demand. Pet rent + deposits help offset risk.

How often should Indy landlords raise rent?
Once per year at renewal, based on market comps and property improvements.

Is a property manager worth it?
If you have multiple units, limited time, or little experience, a PM can be a great investment.

Final Thoughts

Becoming a landlord in Indianapolis can be incredibly rewarding — if you approach it with the right mindset, systems, and expectations. Avoiding these five mistakes will protect your cash flow, reduce stress, and set your portfolio up for long-term success.

Whether you’re buying your first rental or scaling a larger portfolio, Roots Realty Co. is here to help you evaluate deals, manage risk, and grow your Indy investments with confidence.

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