Why Gary, Indiana Should Be On Your Multifamily Investment Radar

Without question, one of the most interesting Chicagoland markets is Gary in Northwest Indiana. Gary has great growth potential as it continues its long-term shift; investors continually speculate on this value-add community. From real estate taxes to value-add opportunities to redevelopment, here is why Gary should be on your multifamily investment radar. 


Located in Lake County, just over the Illinois-Indiana border, Gary is located 25 miles southeast of Downtown Chicago along Lake Michigan. The city was named after the founding chairman of the United States Steel Corporation. It contains 14 neighborhoods across 50 square miles along the southern shoreline of Lake Michigan. Notorious for its large steel mills and related industries, Gary is bordered by East Chicago and Hammond to the west with Miller Beach, Marquette Park, and the newly anointed Indiana Dunes National Park to the east.


Gary’s location allows for exceptionally convenient travel throughout the Chicago Metro Area with access to I-65, I-94, and I-90, all of which provide admission to the network of major Interstate Highways. The Gary/Chicago International Airport (GYY) is known as Chicago’s Third Airport and due to its central location serves as a low-cost logistics hub with recent signees such as UPS freight.

On a local transportation level, the City of Gary provides busses via the Gary Public Transportation Corp. system that operates 12 routes all over Northwest Indiana. Additionally, Gary is home to three train stations that allow citizens to commute directly into Downtown Chicago’s Millennium Park Station along the NICTD South Shore Line (SSL) or east to South Bend.


From a city, county, and state perspective, here are a few reasons an investor may want to consider keeping their eye on this market. First and foremost would be the low Indiana real estate taxes; currently, the state is at a tax cap of 2% on the assessed value for rental properties with exceptions allowing owners to pay even less or more based on voter referendums. Building on that point would be the lower income taxes in the state of Indiana – 3.23% for individuals and 5.75% for businesses (with exceptions to Lake County residents). They have an additional local income tax rate of 1.5%, totaling to 4.73% – compared to Illinois at 4.95% for individuals and 7% for businesses. 

Landlord Law

Rounding out a second reason would be how favorable Indiana and Lake County are for landlords, making it easier and more efficient to evict troublesome tenants. 


The market has seen new capital invested primarily towards value-add plays, commonly achieved through rental increases via unit updates and amenity additions upon vacancy.


Average rent ranges:

  Non-Updated Renovated
Studio $450-575 $600-675
1 Bedroom $600-700 $700-785
2 Bedroom $700-775 $800-925
3 Bedroom $800-950 $975-1100+


Additional input from CoStar cites that the effective market rent per unit, or the average of all the leases that were signed through the help of their subsidiary websites, found that rents landed in this range:

  Studio 1 Bedroom 2 Bedroom 3 Bedroom
Rent $648 $700 $759 $933


Most of the units in Gary are not renovated or new construction, with the majority share being one and two bedroom units. 

Naturally there’s risk in this market. You’d be hard pressed to find year-over-year rental increases matching the inflation rates. Vacancy rates hover in the range of 7-9%. The job market is recovering very slowly as it was once backed by the booming steel industry but now sees an increase in the industrial, logistics, and hospitality fields.

Value-Add Opportunities

Gary is a low barrier to entry city through low unit prices and an abundant tenant base backed by affordable and subsidized housing initiatives. Appropriate unit updates and rent increases paired with lower acquisition costs allow the opportunity for investors to build equity into their portfolio.  


The city of Gary is and has been embarking on large redevelopment plans. A few examples include investing and reinvigorating entire neighborhoods, a new Hard Rock Casino and Hotel, private-public partnerships with Gary Airport, business reinvestment pledges, new double-track South Shore commuter train lines and so much more. 


As the city continues to undergo a long re-developmental planning phase, investor interest continues to rise in these markets. The looming real estate issues in the state of Illinois paired with the rising cost of living or owning rental properties in Chicago has caused this market as well as others in Northwest Indiana to see a convergence of capital from local and national investors into properties within these markets. 

All of these points demonstrate that Gary, Indiana has growth potential. There is no doubt Gary may turn some heads in the future, and smart investors will find the opportunities to make great returns in the long-term. 


Kyle Sissell