Is This My Next Investment? A Short-Term Rental in Indiana
My wife, Heather, and I were recently blessed with a grandchild. Her parents (our daughter and son-in-law) have established their lives in Noblesville, a growing suburb just north of Indianapolis, Indiana.
While my wife Heather was visiting the new baby, I was poking through the investment opportunities for a potential short-term investment property that we could use when visiting and generate income at the same time.
There’s a special kind of excitement that comes with finding a property that just feels like an opportunity. That was me when I stumbled upon a small duplex with a two-bedroom, one bath on each side, for just under $300,000.
At first glance, it didn’t look like a goldmine. It wasn’t a beach house, a ski cabin, or a luxury condo. But that’s the point. The best short-term rentals aren’t always the flashiest properties; they’re the ones that balance affordability, steady demand, and strong cash flow. What makes them valuable is what’s around them, not just what’s inside.
Here is the work we have done so far. If you have investment or STR experience, what else have we missed?
The Search: Balancing Emotion and Math
When I first started looking for a property in Indiana, I wasn’t just scrolling for cute homes. I was looking for data points. My goal was simple: find a property that checked three boxes: 1. Strong nightly rates 2. Low acquisition cost, and 3. Sustainable income potential.
Noblesville is unique for a couple of reasons. It’s close to Indianapolis, which means a steady stream of travelers. Families visiting for sports tournaments, professionals attending conventions, and couples coming for weekend getaways to the Ruoff Music Center. But the best part is it also has affordability.
Compared to Colorado, where $600,000 might get you a modest rental, Indiana homes under $300,000 could produce similar revenue with far lower risk. Still, before I even scheduled a showing, I needed to know if the numbers would make sense. That’s just where my analysis began. Before I could make an offer, I had to research the following things.
Step 1: Understanding the Local Market
Every market is different when it comes to short-term rentals. Before you fall in love with a property, you need to understand the rules of the game. So I started by researching:
- Local Regulations:
Short-term rental ordinances can make or break an investment. Some towns require special permits; others cap the number of nights you can rent. I called the city of Noblesville zoning department and confirmed that short-term rentals were allowed in residential zones as long as they complied with safety and tax requirements. That one phone call could have saved me from buying a property I couldn’t use. But the best part is this duplex sits right outside of the city limits where there are no restrictions whatsoever. - Demand Drivers:
I asked myself, Why would someone visit here? Noblesville isn’t a resort town, but it’s home to Ruoff Music Center, one of the largest outdoor venues in the Midwest. That’s tens of thousands of visitors every concert weekend, plus year-round tourism from nearby lakes and events. Suddenly, the idea of a “rock-and-roll-themed” rental made perfect sense. - Competition:
I used AirDNA and Mashvisor to research comparable properties including average occupancy rates, nightly pricing, and annual gross income. In Noblesville, the best properties were generating between $40,000 and $55,000 per year, depending on proximity to attractions and design quality. With a purchase price under $150,000 a side, those returns penciled out well above average.
Step 2: Evaluating Revenue and Expenses
The first mistake many new investors make is assuming that the difference between their mortgage and nightly rate equals profit. But short-term rentals live and die by their operating expenses.
Here’s what I analyzed:
- Revenue per Available Night (RevPAN):
Instead of just looking at the average nightly rate, I calculated RevPAN (Revenue per Available Night). This is the total revenue divided by the number of available nights. This gave me a realistic picture of what I could expect after accounting for vacancy. For Noblesville, my projected RevPAN was around $170 per night, with about 60% occupancy. This equaled roughly $3,000 to $3,200 in monthly gross income (each side). - Operating Expenses:
I built a detailed pro-forma, including utilities, Wi-Fi, cleaning fees, supplies, insurance, repairs, and a 10% property management fee (even though I planned to self-manage initially). Those little costs add up, and being honest about them upfront is the difference between a smart investor and a wishful one. (Click here for my STR Cashflow Investment Worksheet) - Capital Expenditures:
Because the home was older, we budgeted $40,000 per unit for a full remodel and also factored in reserves. My rule of thumb is to set aside at least 5% of gross revenue annually for future maintenance.
Once I ran the numbers, the property projected a 200% cash-on-cash return (after the cash-out refinance). That’s a win by any standard. That’s when I decided it was time to move from research to action.
Step 3: Contracting the Property
When the right property pops up, speed matters. I reached out to the listing agent, confirmed the home’s condition and history, and wrote a clean, competitive offer.
One key detail: I didn’t waive inspection. Ever. Especially on older homes, inspections are your insurance policy. In this case, the inspection revealed a few manageable issues; an outdated kitchen, old flooring, and all the windows need replacement. That information didn’t scare me; it gave me leverage.
I negotiated a price of $260,000 to offset part of the renovation cost, and we agreed to move forward.
The deal came together smoothly because I treated it like a business transaction… data-driven, not emotional.
Step 4: Researching the Investment
Once the contract was accepted, the real work began. Buying a property is easy. Making it profitable is where strategy comes in.
Here’s what we researched in depth before finalizing financing:
- Tourism and Seasonality:
We wanted to know exactly when guests would come. Not just summer concerts, but year-round events. We checked local calendars, festivals, and wedding venues. Understanding seasonality helped us plan our pricing strategy and budget for off-peak months. - Local Labor and Services:
Short-term rentals rely on reliable cleaners, handymen, and lawn care. So we made a list of local vendors, read reviews, and even called a few to confirm pricing. A solid cleaning team can make or break the guests’ experience. - Insurance and Liability:
Short-term rental insurance is different from standard homeowner’s coverage. It must include business liability and income protection. We spoke to several insurers to ensure I’d be covered for guest accidents, property damage, or lost income if the property couldn’t operate temporarily. - Furnishing and Design Budget:
Guest experience drives reviews… and reviews drive revenue! We planned a complete refresh with a new kitchen, bath, flooring, plus durable, stylish furniture, upgraded lighting, and a few rock-and-roll-inspired design touches to connect with the concert crowd. - Financing Options:
Because this was an investment property, we compared conventional investment loans with DSCR (Debt Service Coverage Ratio) loans. The DSCR loan appealed to me because it used projected rental income to qualify, rather than our personal income. It’s a great tool for scaling if your personal debt-to-income ratio is already maxed out. - Cash-Out Refinance:
Once the property is rehabilitated and fully rented, we plan to do a Cash-Out refinance to recapture the initial cash we put down as well as most of the furniture.
Step 5: Testing the Numbers Again
Before closing, we ran the numbers one more time using conservative estimates. What if occupancy dropped 10%? What if nightly rates fell $20? Would it still cash flow? The answer was yes; and that’s the key. Always test your numbers with worst-case scenarios. If it still makes sense, you’ve likely got a winner.
We also researched comparable long-term rents in the area. If regulations ever changed and we had to convert it into a long-term rental, we wanted to make sure it would still break even or better. That’s our built-in safety net.
Step 6: Preparing for Management
Even the best-performing short-term rental can become a nightmare if you don’t have the right systems. So before closing, I mapped out:
- Automation Tools: We plan to use Hospitable for messaging, PriceLabs for dynamic pricing, and Ring + smart locks for security.
- Guest Experience Flow: From booking to checkout, We want everything frictionless. Welcome messages, check-in instructions, and mid-stay checkups.
- Local Backup Plan: Fortunately, we have our daughter and son-in lew in case we need a quick set of eyes on the property. If we didn;t we would want to identify and interview a few local STR Property Managers.
Step 7: Evaluating the Market
Buying one property isn’t the end goal; it’s the start of a scalable model. So I zoomed out to evaluate Noblesville and surrounding towns as a portfolio market.
- Population growth and low unemployment signaled long-term stability.
- Proximity to Carmel and Indianapolis meant strong weekend demand.
- Relatively low property values improve net yield.
This wasn’t just a “fun Airbnb.” It was a test case for acquiring multiple properties in a stable Midwest market that provide consistent cash flow without the volatility of vacation hotspots.
Step 8: The Final Decision
When we finally sign the closing documents, we’re not just buying a house. We’re buying a system. A model that could be repeated, improved, and be scaled. I’d already run through the worst-case scenarios: the AC goes out, occupancy dips, regulations change. But because we’ve done our research, none of those possibilities scared us.
That’s the difference between gambling and investing. Investors plan for problems before they happen.
Lessons for Other Agents and Investors
Whether you’re an agent exploring short-term rentals for your own portfolio or guiding a client through their first investment, here are the key lessons from my Indiana project:
- Data First, Emotion Second.
Run the numbers before you fall in love with the pictures. - Verify Regulations.
Don’t assume Airbnb is allowed. Call the zoning department. - Study Seasonality.
Know when people visit and why. - Budget for Everything.
Cleaning, repairs, furniture, and downtime are part of the business. (Download my Budget) - Have an Exit Strategy.
Always know your long-term rental fallback plan. - Design for Reviews.
Every design choice should lead to a 5-star experience. - Think Like a Business Owner.
Automate systems and protect your time.
Start Building Your Own Short-Term Rental Portfolio
If this story sparked something in you to own an investment that builds wealth or to help your clients with their investment portfolio, then Schedule a free 30-minute strategy session with me, and let’s break down your real estate investment goals.
Whether you’re ready to buy your first property or scale your portfolio, I can help you identify the right markets, analyze the numbers, and create a strategy that works in today’s economy.
