If you’ve been eyeing Indianapolis real estate, 2025 is shaping up to be another strong year for investors. Indy continues to rank as one of the most affordable metros for both first-time buyers and investors while offering rental yields that outperform many Midwest cities. With average home prices hovering around $248,000 as of mid-2025 (MLS data), Indy still provides a low barrier to entry compared to Chicago or Nashville, but with similar growth momentum.

The big question: which neighborhoods are best to invest in right now? Whether you’re buying a rental, house hacking, or exploring short-term rentals like Airbnb, these are our top five Indy neighborhoods to watch.

1. Fountain Square

Fountain Square has long been an investor favorite, but 2025 is proving why it continues to lead the pack. Homes here saw 7% year-over-year appreciation in 2024, and the demand from young professionals and creatives keeps climbing. The area is also hot for Airbnb rentals, thanks to its walkability and nightlife.

Why investors love it:

• Strong rent-to-price ratios

• Popular with both renters and buyers

• High short-term rental demand

👉 Related reading: How to House Hack in Fountain Square, Indianapolis: A First-Time Investor’s Guide

2. Near Eastside (Emerson Heights & Little Flower)

The Near Eastside offers some of the best entry-level price points in the city, often 20–30% below the Indy average. Emerson Heights and Little Flower especially attract investors because they’re close to downtown, yet still feel like established neighborhoods with historic charm.

Why investors love it:

• Lower purchase prices = higher cash flow potential

• Ongoing revitalization projects

• Proximity to downtown and Irvington

3. Bates-Hendricks

If Fountain Square feels a little too pricey, Bates-Hendricks is the next best thing. With homes averaging around $225,000 in 2025, it’s a more affordable option with similar proximity to downtown. This area attracts house hackers, flippers, and long-term rental investors alike.

Why investors love it:

• Affordable compared to Fountain Square

• Strong appreciation trends

• Popular for flips and duplexes

4. Broad Ripple

Known for its nightlife, restaurants, and walkability, Broad Ripple continues to thrive as a rental market. While prices here trend higher (average $310,000 in 2025), the tenant demand is nearly bulletproof. It’s especially attractive for investors focused on student and young professional rentals.

Why investors love it:

• Consistent rental demand from Butler University and young professionals

• Strong long-term appreciation

• Walkable amenities

5. Riverside

Riverside is one of Indy’s emerging gems. With major redevelopment projects along the White River and new parks/greenway expansions, property values are expected to climb. In 2024, Riverside homes saw 9% appreciation, one of the city’s fastest-growing submarkets.

Why investors love it:

• Affordable entry point compared to downtown

• Major redevelopment driving growth

• Strong appreciation forecasts

How to Choose the Right Indy Neighborhood for Your Investment

When deciding where to invest in Indianapolis, consider your strategy first:

• Cash flow play? Look at Near Eastside or Riverside.

• Appreciation + lifestyle appeal? Fountain Square and Broad Ripple shine.

• Balanced investment? Bates-Hendricks offers both.

No matter your strategy, Indy provides diverse options that fit a variety of budgets and goals.

👉 You might also like: The Ultimate Guide to Airbnb Investment in Indianapolis (2025 Edition)

Quick Investor Q&A

What’s the average home price in Indianapolis in 2025?

As of mid-2025, the average home price in Indianapolis is about $248,000, still well below the U.S. average.

Is Indianapolis good for rental property investment?

Yes — Indy consistently ranks among the top U.S. markets for rental yield, with average gross rental yields above 8% in 2025.

Which Indy neighborhood is best for Airbnb?

Fountain Square and Broad Ripple lead the way for short-term rentals thanks to high demand from visitors and walkable amenities.

What neighborhood has the most appreciation potential in 2025?

Riverside has one of the fastest growth rates in Indy due to ongoing redevelopment projects.

Final Thoughts

Indianapolis continues to punch above its weight for investors — affordable entry, strong appreciation, and consistent rental demand. Whether you’re buying your first house hack in Bates-Hendricks or picking up a rental in Riverside, the opportunities in 2025 are exciting.

Ready to explore Indy real estate investments? Reach out to Roots Realty Co. — our team of young investors knows these neighborhoods inside and out, and we’ll help you build a strategy that fits your goals.

👉 Explore more investor resources here: Investor Resources