Few Midwestern cities have an event calendar like Indianapolis. The Indy 500 in May, Gen Con in summer, a steady run of conventions downtown and championship games at Lucas Oil Stadium can fill every bed in the city for a week. The challenge for an Indy host is the weeks in between.
In short: LendingStreet finances Indianapolis-area short-term rentals with DSCR loans that can qualify on projected rental revenue on some programs instead of a 12-month lease. Loans start at $150,000 with no stated maximum, purchases go up to 80% LTV, the standard minimum DSCR is 1.0x and the minimum credit score is 620. Indiana law limits how far cities can restrict short-term rentals, but registration, safety and HOA rules still apply, so check them for the exact property.
Indiana adopted a state law in 2018 that limits how far local governments can prohibit or restrict short-term rentals. Cities and counties can still enforce safety, nuisance, noise and parking rules, and some can require registration. In practice, that makes Indianapolis more open to nightly rentals than many large cities.
Indianapolis also operates a rental registry for residential rental property in Marion County. Check whether your short-term rental must be registered, and confirm current requirements with the city before you buy. Outside Marion County, Carmel, Fishers, Noblesville, Greenwood and other suburbs have their own rules, and many suburban HOAs restrict rentals under 30 days through their covenants.
Stays under 30 days in Indiana are generally subject to state sales tax and a county innkeeper's tax, and Marion County's innkeeper's tax applies in Indianapolis. Many booking platforms collect and remit these taxes, but confirm which ones and whether you need your own registration with the Indiana Department of Revenue. Keep filings and registry records with your loan file.
May is Indy's biggest month, with practice, qualifying and the Indianapolis 500 at the Indianapolis Motor Speedway in the town of Speedway. Gen Con brings tens of thousands of gamers downtown each summer, and the Indiana State Fair, FFA convention, Big Ten football championship and frequent NCAA events add more peaks. Colts, Pacers and Fever games and concerts fill weekends through the year.
Business travel to the convention center and hospitals, including IU Health Methodist and Riley Children's Hospital, provides weekday demand. Medical stays often run longer than a few nights. Corporate visitors to the downtown office core and the life sciences employers on the north side add steady weekday bookings outside event weeks.
| Area | Main guest | Peak times |
|---|---|---|
| Downtown, Mass Ave, Lockerbie | Convention and stadium visitors | Conventions, Gen Con, game days |
| Fountain Square, Fletcher Place, Bates-Hendricks | Weekend visitors, groups | Events, summer weekends |
| Speedway and Near Westside | Race fans | May, Brickyard weekend |
| Broad Ripple, Butler-Tarkington | Weekend visitors, Butler families | Graduation, game weekends |
| Near hospitals | Patient families, clinicians | Year-round, often 30+ days |
Indianapolis rentals can earn a large share of the year's revenue in a handful of event weeks. Winter is slow outside of conventions and the occasional big game, and summer weekends depend on what is in town. A projection should show this pattern month by month rather than an average that assumes race-week rates all year.
Many Indy hosts fill gaps with medium-term stays for traveling nurses, relocating workers and insurance-related housing. Those stays are steadier and lower maintenance, and stays of 30 days or longer are generally treated as leases rather than lodging.
This example is illustrative and not a quote. An investor buys a three-bedroom renovated home near Fountain Square for $365,000. A third-party projection estimates $50,000 a year in revenue, about $4,167 a month on average, with large spikes in May and around Gen Con.
At 75% LTV the loan is $273,750. Estimated principal and interest is about $1,905. Taxes are budgeted at $578 a month, near the 2% cap that applies to rental property, and short-term rental insurance at $210, for a total of about $2,693.
On the full projection, DSCR is about 1.55x. If revenue came in 20% lower, about $3,333 a month, DSCR would be about 1.24x, still above the 1.0x standard minimum.
| Item | Full projection | Projection less 20% |
|---|---|---|
| Average monthly revenue used | $4,167 | $3,333 |
| Estimated principal and interest | $1,905 | $1,905 |
| Taxes and insurance | $788 | $788 |
| Total monthly payment | $2,693 | $2,693 |
| DSCR | About 1.55x | About 1.24x |
Indiana caps property taxes as a share of assessed value: 1% for an owner-occupied homestead, 2% for residential rental property and 3% for commercial property. If you buy from an owner-occupant, the seller's bill reflects the 1% cap and the homestead deductions, and yours can roughly double. In Marion County, many rentals are taxed at or near the 2% cap. Budget on that figure.
If you want a classic vacation rental within reach of Indianapolis, look at Brown County around Nashville, Lake Monroe near Bloomington, and Lake Freeman and Lake Shafer to the north. Geist and Morse reservoirs in Hamilton County have lakefront homes, though HOAs and city rules there often limit nightly rentals.
These areas have their own county rules and seasonal patterns, with fall foliage weekends especially strong in Brown County and summer boating driving the lakes. Rural properties may also involve wells, septic systems and longer appraisal comparables. Our Indiana short-term rental page covers the state's main STR markets.
Many Indianapolis STRs are in older neighborhoods with homes built a century ago, which guests like for character and insurers look at closely. Insurers look at roofs, wiring and plumbing, and standard homeowner policies usually exclude nightly rentals, so get a short-term rental policy quote. Some homes near Fall Creek, Pogue's Run and the White River fall in flood zones; check the FEMA map.
On some programs, DSCR is calculated on projected short-term revenue, often from a third-party projection. Comparable rentals matter; a Speedway house should be compared with other race-area rentals, not with a downtown condo. If the projection looks low, see our guide to low AirDNA projections. Existing hosts can refinance on booking history on some programs.
Send the address, price, projection or booking history and any HOA documents through the form below, or call (877) 298-1001.
Generally yes. Indiana law limits local restrictions, though safety, nuisance and registration rules apply, and HOAs can still restrict rentals.
Indianapolis operates a rental registry for residential rentals in Marion County. Confirm whether and how it applies to your property.
State sales tax and Marion County's innkeeper's tax generally apply to stays under 30 days. Confirm what your booking platform remits.
Rentals fall under Indiana's 2% cap instead of the 1% homestead cap, and they lose homestead deductions.
A great deal for homes near Speedway and downtown, but underwriting looks at the full year, not race week.
On some programs, yes. DSCR can be calculated on a third-party revenue projection.
Yes, if it can legally operate as an STR and qualifies on projected revenue.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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