BRRRR vs New Construction in Indianapolis: 2026 Math

A $195,000 Beech Grove house at 20 percent down carries $1,002 a month in principal and interest at 6.66 percent. A $430,000 Fishers new build carries $2,211. If you are choosing between BRRRR and new construction in Indianapolis this year, that gap is where the argument starts, and it is not where it ends. Roots tracks 27 Indy submarkets monthly, so this runs both paths on real local numbers instead of a national average.

In this guide: The national frame, and why Indy breaks it · Path A: BRRRR in Marion County · Path B: new construction in Hamilton County · Head to head on the same assumptions · The rule that can kill the new-build exit · The option that beats both right now

The national frame, and why Indianapolis breaks it

Dave Meyer ran this exact comparison on BiggerPockets on August 28, 2026. His national findings are worth stating before we localize them, because three of the four transfer to Indianapolis and one does not.

• Nationally, new builds are often cheaper than existing homes right now, and builders are discounting with rate buydowns, closing credits, and price cuts.
• Cash-on-cash came out similar in his example market, roughly 3.3 percent on both paths after a modest new-build concession.
• BRRRR still won on compound growth, about 17 percent versus about 10 percent, because roughly $35,000 of rehab forced around $100,000 of equity.
• His rule: early or capital-constrained investors should still BRRRR to recycle capital. Investors who want low-maintenance cash flow later should look at new construction, which may cash flow better after the BRRRR refinance because you are not eating 8 percent capital expenditures on a 1948 house.

The piece that does not transfer is the forced-equity assumption. Meyer's BRRRR wins because the after-repair value holds. In the Indianapolis submarket where BRRRR pencils best on paper, values are moving the other way. That is the 2026 local wrinkle and the whole reason to read a local version of this comparison.

Path A: BRRRR in Marion County

Beech Grove is the cleanest example in the Roots data set, so we will use it. From the Redfin pull dated August 10, 2026 (latest month May 2026):

Read the last two rows together. Twenty-seven active listings against sixty closings a quarter is a thin pipeline, not a deal flow. You are competing for a handful of houses at a time, and at 8 days on market you do not get a weekend to think.

The financing

Conventional financing on a non-owner-occupied rental usually wants 20 to 25 percent down, not the 3.5 or 5 percent you see quoted for owner-occupants. At 20 percent down on $195,000, you are borrowing $156,000. Principal and interest at the 6.66 percent Freddie Mac survey rate for the week ending August 27, 2026 is $1,002.50 a month. Note that Freddie Mac's survey is 20 percent down, excellent credit, conventional conforming. An investment-property rate is typically priced higher, so treat $1,002.50 as a floor.

The rehab

Do not let anyone hand you a single rehab number. Realistic bands for this market:

• Cosmetic in Marion County: roughly $25,000 to $60,000
• Systems plus kitchen and bath on pre-1960 stock: roughly $60,000 to $120,000
• Whole-home in Hamilton County: $185,000 and up

Beech Grove is largely older stock, so a real BRRRR there lands in the second band more often than the first. Pick your scenario and call it a scenario.

The rent

Here is where most spreadsheets lie. Zumper's August 31, 2026 Indianapolis figures put a three-bedroom at $1,620 and the citywide median at $1,380. PadMapper had a three-bedroom at $1,630 on August 30. Rentometer's metro three-bedroom reads $1,872. BiggerPockets guest Ashley Kehr cited $1,750 to $2,200 for single-family in Greenfield, which is a different town with a different median.

For Beech Grove specifically, $1,500 to $1,800 is the honest band until somebody pulls comps on the actual street. We are not going to publish a number we did not pull. Neither should your pro forma.

The operating math

Run $1,650 as the scenario rent, with Meyer's own conservatism on an older house:

Now the part that decides the deal. The Marion County homestead deduction and the 1 percent owner-occupied circuit-breaker cap do not apply to a property you do not live in. An investor pays the full rate. We are not going to invent your bill, so here is the bracket:

• Property tax at 1.0 percent of purchase price: $162 a month, leaving $56 before insurance
• At 1.5 percent: $244 a month, leaving negative $25
• At 2.0 percent: $325 a month, leaving negative $107

Insurance has not been subtracted yet, and landlord policies price above owner-occupied. Somewhere inside that bracket, a $195,000 Beech Grove rental at $1,650 stops cash flowing. Your actual number is on the Marion County parcel record and takes five minutes to look up. Pull it before you write the offer, not after. Our breakdown of Indianapolis property taxes for real estate investors covers how the deductions work.

The wrinkle that breaks the model

BRRRR only works if the after-repair value is real, because the refinance is what recycles your capital. Beech Grove is down 4.5 percent year over year. Forced equity is a harder trick when the comps you are forcing against are slipping. Meyer's national episode does not have this problem. You do. This is not a reason to skip BRRRR in Indianapolis. It is a reason to underwrite the appraisal conservatively and to have a plan if it comes in low.

Tyler has run this play himself and watched the back end stall. He bought a rental in 2023, renovated it, and refinanced with no trouble. Then he listed it to trade up, cut the price, drew almost no showings, and had the empty house broken into over Christmas.

Max's read, when Tyler brought the property to the Roots podcast, was "right idea, wrong month." Tyler put it back on the rental market at $1,500 rather than take a number he did not want. That is what a plan for a soft exit looks like in practice.

Path B: new construction in Hamilton County

Fishers is where the builder inventory actually is. From the same August 10 Redfin pull:

Two hundred three active listings against 447 quarterly closings is a real pipeline. You can shop here. And the supply is arriving: BAGI's July 2026 permit data reported by IBJ shows Hamilton County pulled 460 single-family permits, up 125 percent year over year, while the nine-county total was essentially flat at 978 against 969. Johnson County fell 56 percent, Shelby 65 percent, Hancock 48 percent, Hendricks 27 percent. Hamilton County is carrying the region's new construction almost by itself.

The financing and the incentive

At 20 percent down on $430,000, you borrow $344,000. Principal and interest at 6.66 percent is $2,210.64. The 2026 thesis for new construction is the builder incentive, so model it. If a builder buys the rate down a full point to 5.66 percent, that same loan drops to $1,987.87, a saving of about $223 a month. At 25 percent down, the buydown saves about $209.

Get the incentive in writing on a specific address before you underwrite it. A buydown advertised on a signboard is not an incentive you own. We covered how Hamilton County builders have been structuring these in our look at Berkshire and Taylor Morrison new construction in Hamilton County.

What rent this actually needs

Give new construction the benefit it deserves and drop capital expenditures from 8 percent to 3, because you are not replacing a 1948 roof. Keep management at 8 percent, vacancy at 5, repairs at 5. That is 21 percent of gross rent going out before debt service.

At 20 percent down, with property tax modeled at 1.0 percent of price ($358 a month) and a $50 HOA, the monthly stack before insurance is $2,619. To cover it, you need roughly $3,315 a month in rent. Model tax at 1.5 percent instead and the number climbs to about $3,542.

We do not have a verified Fishers four-bedroom rent in this data set, and we are not going to guess one. That single number decides the entire deal, and pulling it on the specific floor plan and street is the first thing you should do. What we can tell you is that applying a $1,600 Marion County rent to a $430,000 Fishers house and declaring a winner is how people talk themselves into a losing deal.

Tyler bought one of these himself, a new-build duplex in Brookside at $475,000 with 25 percent down. On the Roots podcast episode where he and Max ran the numbers, the projection they landed on was two to three hundred dollars a month. His words: "I'm not buying my groceries with the cash flow. That was not the plan here."

The bar he holds it to is annual rather than monthly: "we won't be net positive every single month. I know that, but on the year we want to be net positive in cash flow." That is a different test than the one most new-construction spreadsheets are built to pass. A duplex also carries two rents, so do not read his number as the single-family math above.

The market context on rents

Zillow's rent index for the Indy metro reads $1,571, up 2.7 percent year over year, but half of Zillow's Indianapolis rental listings are offering a concession, and that share rose 9.4 points year over year, one of the biggest jumps among large metros. Apartment List's Indianapolis city figure for August 2026 was $1,237, down 0.87 percent, with the Indy-Carmel-Anderson metro at $1,271, down 0.33 percent.

Supply explains it. Yardi Matrix counted roughly 6,075 apartment units delivered in 2025, about 2.9 percent of stock, with vacancy running in the high sixes to low sevens. Thompson Thrift broke ground on a 251-unit phase at Fishers District. Asking rents on apartments are flat to slightly down. Single-family rent is a different product, but it does not price in a vacuum.

Head to head on the same assumptions

Neither of these is a guaranteed outcome, and nobody can promise you appreciation, rent, or a refinance appraisal. What the table shows is that the two paths fail differently. BRRRR in Marion County fails at the appraisal. New construction in Hamilton County fails at the rent roll. Underwrite the one you can actually survive.

One cost note worth carrying

Ignore the websites quoting $119 per square foot to build in Fishers. Those omit land, site work, and often finishes. A more defensible band for Indianapolis standard finish is $160 to $225 per square foot, with Hamilton County labor running 15 to 25 percent above Marion. An 1,800-square-foot build at $190 is $342,000 in construction alone before the lot. That is why the $430,000 Fishers median is not cheap new construction. Nationally, Realtor.com's Q2 2026 data put the new-construction listing premium at 10.3 percent over existing, with a $450,256 median new-build list price at $217 per square foot, and 20 percent of new listings carrying a price cut against 18.6 percent of existing.

The rule that can kill the new-build exit

Carmel and Fishers both cap single-family rentals at 10 percent of the homes in a subdivision. Existing rentals can be grandfathered through registration. Carmel council member Rich Taylor said in April 2026 that 9.6 percent of Carmel homes are already single-family rentals, with large corporate investors holding 22.8 percent of those.

Buy new in a capped Fishers subdivision and you may not be permitted to rent it at all. Check the city registry and the HOA covenants in writing before earnest money goes hard. This is the single most expensive thing investors miss in Hamilton County, and it has nothing to do with interest rates.

The option that beats both right now

If you can occupy the property, house hacking in Marion County is still the strongest risk-adjusted entry, and it is not close. FHA at 3.5 percent down is owner-occupant only, which is exactly the point: you get 3.5 percent down instead of 20, you live in one unit, and the other unit pays down a loan you could never have gotten as an investor.

That is a different strategy from a remote BRRRR, and treating them as interchangeable is a mistake we see constantly. Our Indianapolis house hacking numbers post runs the current version, and the reasons small Indy landlords lose money on duplex cash flow post covers what breaks it.

Run your own numbers before you pick a side

BRRRR and new construction fail at different points, and the honest answer for 2026 Indianapolis is that both are tighter than the national coverage suggests. The Marion County deal dies at the appraisal if values keep slipping. The Hamilton County deal dies at the rent roll if the number is not there. Neither is a reason to sit out, and both are a reason to underwrite with a real tax bill and a real rent comp instead of a rule of thumb. Start with our Indianapolis investor resources, then send Tyler the address you are looking at. He has closed more duplex deals than anyone on the team and will tell you which of these two paths that specific property actually is.

Sources: BiggerPockets, Dave Meyer, BRRRR vs New Construction, August 28, 2026; Freddie Mac Primary Mortgage Market Survey, week ending August 27, 2026; Daily Journal / IBJ, July 2026 BAGI permits; WRTV, Carmel and Fishers 10 percent rental cap; Realtor.com research, Q2 2026; Redfin Data Center city market tracker, latest month May 2026; Zillow Observed Rent Index, July 2026; Apartment List, August 2026; Zumper, August 31, 2026; PadMapper, August 30, 2026; Yardi Matrix via Hoodline, June 2026.