Why NNN Investors Prefer Indiana State: Higher Growth & Competitive Cap Rates Explained
Future Holding for NNN Property Investments in Indiana
Triple Net Lease (NNN) properties, where tenants are responsible for property taxes, insurance, and maintenance, continue to be a top choice for investors seeking passive income with minimal management duties. In Indiana, the outlook for NNN property investments is strong, bolstered by several promising market factors:
1. Economic and Population Growth
Indiana has experienced steady population growth, especially in counties like Hamilton, Hendricks, and Boone. This demographic expansion fuels demand for commercial real estate, making NNN properties an appealing choice for investors focused on long-term income and property appreciation.
2. Stability and Demand for NNN Properties
NNN lease agreements offer reliable, long-term cash flow by transferring key operating expenses to tenants. This structure ensures consistent income regardless of market volatility. Indiana’s stable economy and business-friendly environment further strengthen the appeal of these assets to both institutional and private investors.
3. Market Trends and Cap Rates
Cap rates for NNN properties have shown upward movement nationwide, indicating better return potential for investors. Indiana’s expanding inventory of net lease properties gives investors more flexibility and access to attractive deals. With interest in secondary markets growing, Indiana stands out as a value-driven location for securing high-yield NNN assets.
4. Financing Considerations for NNN Investors
To invest in NNN real estate, a typical investor should have a net worth of at least $1 million or an annual income over $200,000. Down payments generally range between 30% and 40%. Understanding these financial criteria is critical for investors planning to enter the NNN market or grow their portfolios through strategic acquisitions.
5. Local Market Opportunities
Indiana offers diverse net lease investment opportunities across industrial, medical, and retail sectors. For instance, properties near the Indianapolis metro area often feature long-term NNN leases with national tenants and include built-in rent escalations. Investors leveraging a 1031 exchange can defer capital gains taxes and build a resilient, income-generating real estate portfolio in Indiana’s evolving market.
Triple-net (NNN) investors are increasingly focusing on Indiana as a strategic location for net lease properties. With competitive cap rates, affordable entry points, and a business-friendly climate, Indiana offers an attractive landscape for long-term NNN investment strategies. Here’s why NNN brokers and investors view Indiana as a high-potential market:
1. Competitive Cap Rates in a Stable Market
Indiana offers cap rates typically ranging between 5.5% to 7.5%, making it one of the more favorable states for generating healthy returns. Compared to major coastal markets, Indiana delivers better yield potential with less volatility, appealing to investors seeking long-term, income-producing assets with minimal risk.
2. Affordable Commercial Property Prices
Indiana’s real estate market remains relatively affordable, even in fast-growing counties like Hamilton, Boone, and Hendricks. This affordability allows NNN investors to secure high-quality properties—often leased to national tenants—at lower acquisition costs, improving cash-on-cash returns and investment scalability.
3. Population Growth & Economic Expansion
Counties such as Hamilton and Johnson have seen sustained population growth, driven by strong job markets, quality of life, and affordable housing. Indiana’s continued investments in workforce development, infrastructure, and logistics help foster economic expansion, which in turn drives consistent demand for net lease real estate across both urban and suburban regions.
4. Essential Retail and QSR Demand
Indiana is a top target for NNN investors looking at essential retail and quick-service restaurants (QSRs). National brands like Dollar General, Walgreens, Chick-fil-A, and Taco Bell continue expanding across Indiana, supported by strong consumer demand and demographic alignment. These tenants offer reliable, long-term income streams in well-located properties.
5. Favorable Tax Environment for Passive Investors
Indiana maintains a relatively low corporate and property tax burden, which is advantageous for real estate investors. LLCs and passive investment structures benefit from a simplified tax code and a cost-efficient regulatory environment, making Indiana an appealing option for investors looking to deploy 1031 exchange proceeds or expand net lease portfolios with minimal friction.
6. Growth in Industrial & Logistics Sectors
Indiana is a national leader in manufacturing and logistics, with strategic access to interstates, rail, and ports. The growth of e-commerce and supply chain hubs across Indianapolis and surrounding regions is driving demand for single-tenant industrial and service-oriented net lease properties. This industrial strength adds further depth to Indiana’s NNN investment landscape.
Income Taxes
Indiana’s Tax Advantages for NNN Investors: A Smart Choice for Net Lease Properties
Indiana offers a favorable tax environment for investors in net lease (NNN) properties, making it a strategic destination for those looking to optimize returns and reduce tax-related overhead. With investor-friendly income tax policies, Indiana helps preserve more of your investment income while keeping ownership costs low. Here’s why NNN brokers and investors are drawn to Indiana:
1. No State Income Tax on Passive LLC Income
While Indiana generally taxes LLC income, passive income from out-of-state investors structured as single-member LLCs or partnerships may avoid state-level taxation when set up properly and not conducting business directly within Indiana. Many investors use pass-through entities to optimize for this. It’s essential to consult with a tax advisor to take advantage of Indiana’s relatively lenient treatment of passive investment income.
2. Competitive Corporate Income Tax Rate
Indiana’s corporate income tax rate is 4.9% as of 2024—one of the lowest in the nation. This flat rate applies to businesses operating in the state, allowing investors who hold net lease properties through a corporation to retain a greater portion of profits for reinvestment, expansion, or distributions.
3. Flat and Predictable Personal Income Tax
Indiana uses a flat personal income tax rate of 3.15%, plus a small county surtax (typically between 1% and 3.2%, depending on the county). Compared to states with progressive tax brackets, Indiana’s flat tax structure simplifies planning and results in more predictable tax liabilities for individual NNN investors.
4. No State Estate or Inheritance Tax
Indiana does not levy an estate or inheritance tax, making it an ideal state for estate planning. Investors can pass down NNN properties to beneficiaries without triggering state-level inheritance costs. This is a significant advantage for families looking to build and preserve long-term generational wealth through real estate.
5. Low Property Tax Rates
Indiana maintains moderately low property taxes compared to national averages. The state’s average effective property tax rate is about 0.85%, which helps reduce ongoing holding costs for net lease investors. These lower taxes are especially valuable for long-term investors seeking consistent cash flow.
6. No Separate Capital Gains Tax
Indiana does not impose a separate capital gains tax. Capital gains are taxed as part of regular income at the flat personal or corporate tax rate. This simplifies tax reporting and offers a more favorable structure for investors planning an exit strategy or utilizing a 1031 exchange to defer capital gains.
Investing in triple net lease (NNN) properties in Indiana offers a strategic opportunity—especially in growing regions—where tenants cover property taxes, insurance, and maintenance. Based on recent data, here are top Indiana locations you should consider:
1. Boone County (Lebanon, Whitestown):
Population Growth: +3.4% from 2023 to 2024—Indiana’s fastest-growing county
Economic Development: Strong industrial and logistics expansion along the I‑65 corridor; Whitestown is booming with warehousing and residential growth.
Investment Potential: High-demand net lease opportunities in industrial and retail sectors.
2. Hancock County (Greenfield, McCordsville):
Population Growth: +3.1% in 2024—the No. 2 fastest-growing county
Economic Development: Suburban expansion fueled by proximity to Indianapolis.
Investment Potential: Retail, QSR, medical office, and service-tenant NNN properties are performing strongly in commuter towns.
3. Hamilton County (Carmel, Fishers, Noblesville):
Population Growth: +1.9% in 2024; added over 7,000 residents
Economic Development: Indiana’s most affluent county—solid household incomes and business growth.
Investment Potential: Ideal for premium retail, high-end QSRs, and service-based tenants.
4. Hendricks County (Plainfield, Danville):
Population Growth: +1.9% in 2024; estimated population of ~186,400
Economic Development: Robust suburban growth with increasing residential and commercial builds.
Investment Potential: Strong for retail and medical office-oriented NNN properties near Indianapolis.
5. Allen County (Fort Wayne Metro):
Population Growth: +1.1% (≈4,164 new residents) in 2024; eighth straight year of net migration gains
Economic Development: A well-diversified metro economy with quality-of-life initiatives.
Investment Potential: Consistent demand in industrial, retail, and service NNN properties.
6. Madison County (Anderson Metro):
Population Growth: +1.1% (≈1,476 new residents) in 2024; estimated population ~134,200
Economic Development: Anchored by the Anderson metro; benefits from proximity to Indianapolis and a steady economic base.
Investment Potential: Promising for regional retail, service tenants, and single-tenant NNN assets.
Pros:
1️⃣ Higher Cap Rates than Coastal States
Indiana typically offers cap rates in the 6% to 7.5% range, which is higher than what’s found in states like California or New York (often below 5%). This allows NNN investors to earn stronger returns and better cash flow.
2️⃣ No State-Level Tax on Passive LLC Income
Rental income earned through passive LLC structures is not subject to Indiana state tax in most cases, offering tax efficiency for investors focused on long-term hold strategies and portfolio growth.
3️⃣ Low Property Taxes
Indiana has one of the lowest property tax rates in the Midwest, with an average effective rate around 0.83%. This reduces holding costs and improves net operating income for NNN properties.
4️⃣ Affordable Property Prices
Compared to states with inflated commercial real estate markets, Indiana offers affordable property prices, making it easier for investors to acquire properties with national tenants without excessive capital.
5️⃣ Economic & Population Growth in Key Counties
Counties like Hamilton, Boone, Hendricks, and Allen are seeing consistent population growth driven by tech, manufacturing, and logistics sectors. This fuels long-term demand for retail and essential service NNN properties.
6️⃣ Strong Infrastructure & Industrial Investment
Indiana is a national leader in logistics, advanced manufacturing, and life sciences. Major infrastructure investments and projects (like those near the I-65 and I-70 corridors) create sustained demand for warehouse, QSR, and service-based tenants.
7️⃣ Business-Friendly Policies
The state features a low flat corporate tax rate (4.9%), stable regulatory environment, and incentives for development — attractive conditions for both tenants and investors in the NNN space.
Cons:
1️⃣ Slower Urban Appreciation vs. Sunbelt States
Indiana’s real estate market generally appreciates more slowly than fast-growth markets like Texas, Arizona, or Florida. Investors seeking rapid value growth may find limited upside.
2️⃣ Tenant Demand Can Be Regionally Concentrated
While metro areas (e.g., Indianapolis, Fort Wayne) are thriving, demand in rural counties can be weaker, with fewer national tenants. Site selection is critical to avoid long vacancies.
3️⃣ Weather Risks: Tornadoes & Winter
Parts of Indiana are in Tornado Alley, and harsh winters can impact property maintenance and insurance premiums. Investors must factor in weather-related risks when underwriting deals.
4️⃣ Limited Premium Retail Presence
Indiana’s retail mix is heavily weighted toward essential and mid-tier retail (Dollar General, AutoZone, QSRs, etc.). Investors looking for high-end or luxury NNN tenants may have fewer choices.
5️⃣ Industry Concentration in Manufacturing & Logistics
The state’s economy is heavily tied to manufacturing and transportation sectors. While generally stable, downturns in these industries can impact local employment and commercial activity.
Indiana NNN Properties for 1031 Exchange
Invest in Free Standing Single Tenant Triple Net (NNN) Properties in Indiana
Are you looking for a reliable 1031 exchange replacement property?
At Triple Net Investment Group, we specialize in the sale of single tenant NNN properties and triple net shopping centers across the United States. Our team is dedicated to helping investors find high-quality (Tenant Triple Net) NNN properties in Indiana and nationwide that align with their financial goals and 1031 exchange requirements.
With our in-depth market knowledge and personalized service, we provide tailored investment strategies for both buyers and sellers of commercial real estate. Whether you’re looking to defer capital gains through a 1031 tax-deferred exchange or want to diversify your portfolio with income-generating assets, our team offers a wide selection of vetted NNN investment properties.
Corporate Tenant Credit Ratings
Find out more about the credit rating of the tenant before purchasing.
How safe are the triple net investment grade free standing single tenant properties?
Market Analysis
What three things should I know before investing?
Call or e-mail us and we will get back to you within 24 hours. We know of properties for sale that aren’t listed or advertised.
Email: info@nnndeals.com Tel: 202-361-3050
We strive hard to provide clients with quality costumer service
We provide our clients with all of the information they need upfront to make an informed decision, even before a Letter of Intent is issued such as: tenant credit information, store sales, lease terms, options, renewal rates, rent escalations, location analysis, site analysis, market analysis, demographic data, cash on cash returns on investment, internal rate of returns after taxes, risks, likes, dislikes and so on. We will then strategies how to proceed on making a best offer. It is our goal to build a solid relationship with our clients and keep them updated on net lease investments, even though they may not have a need for years to come.(NNN Properties in Indiana)
We markets our listings locally, nationally and internationally
Triple Net Investment Group difference is a concept that is revolutionary in the commercial real estate brokerage business. In addition to marketing our deals to potential investors, We markets our listings to the entire brokerage community. We put our listings directly in front of thousands of commercial real estate agents in each state, region and local where the property is located.
