Though Indianapolis is the 15th largest city in the U.S., residents here love that this city doesn’t have a big-city atmosphere. There’s a neighborly, small-town feel to it that makes it easy to call this city home.
Indianapolis is the state capital of Indiana, as well as its cultural and financial hub. The metropolitan area is home to 2 million residents of a variety of cultures and backgrounds. It’s home to numerous families, with an ever-growing Gen Z population.
Residents of Indianapolis love that there’s a thriving job market, low unemployment rate and that the cost of living in Indianapolis is relatively affordable for most folks. In fact, the overall cost of living in this city is 8.2 percent lower than the national average, a number that’s basically remained the same since last year.
To find out if Indianapolis is the right city for you, we’ve broken down the cost of living in Indianapolis into the following categories so you can see where your money will go and whether a move to this awesome city is in your budget.
Housing costs in Indianapolis
Something that will drastically increase the cost of living in Indianapolis is the cost of the rent. Thankfully, housing in this city is, on average, 19.2 percent less than the national average. That means you’re more likely to get the apartment of your dreams with most (if not all the amenities you want ) for an affordable rate than if you lived elsewhere like Phoenix, Arizona (17 percent higher than the national average).
The average rent in Indianapolis is $1,337 per month. That rate has decreased by 2 percent over the last year. Even better news for renters!
Obviously, $1,337 is an average, meaning you’ll pay higher or lower rates depending on which neighborhood you choose to live in.
For instance, if you like the Gateway West neighborhood, you can expect to pay a median rental fee of $720 if you decide to move there.
Or, if you find an amazing apartment in the Lockerbie Square neighborhood, you’ll end up paying one of the higher rental rates in the city — approximately $2,111. Living in that neighborhood can increase the cost of living in Indianapolis quite a bit, but if you love the neighborhood, find an amazing apartment and can afford it, why not go for it?
Average rent prices in cities near Indianapolis
You don’t have to live within Indianapolis city limits to benefit from all the city has to offer. You can live in one of the many suburbs or even a nearby city. Keeping your options open may help you keep the cost of living in Indianapolis more affordable for your budgetary needs. And you may find that you enjoy living in a quieter neighborhood, rather than dealing with bustling city life all the time. Here are a few nearby options.
Home prices in Indianapolis
Renting an apartment isn’t your only option. You can also consider purchasing a home, something that’s potentially more affordable than the average rent in Indianapolis.
According to Redfin, the average house goes for $210,000. Though this is 13.5 percent higher than last year, it’s still substantially cheaper than many cities in the country, some of which aren’t as populous or don’t have the same incredible big-city amenities that Indianapolis boasts.
Depending on your down payment, you’ll pay an average of $981 per month toward your mortgage. That’s over $350 less than the average rent in Indianapolis — savings that can help reduce your overall cost of living in Indianapolis.
It’s important to note, though, that because home prices are so affordable, the housing market is extremely competitive. Many homes for sale receive multiple offers, some even with waived contingencies. Homes sell for between 1 and 6 percent higher than the asking price and often leave the market within 3-5 days.
Food costs in Indianapolis
Food costs in this city average 4.8 percent cheaper than median food prices in the U.S. This includes the cost of dining out and cooking at home.
The culinary scene in Indianapolis is coming back strong after the pandemic, which is great news for foodies! Some of the best eateries in the city serve European-style pastries, California-style burgers, Florida-style seafood and pizza, as well as Japanese, French and Latin-inspired foods. The average cost of eating out is approximately $10.00, though this can rise or fall depending on the restaurant and the menu items you choose.
If you’re someone who prefers to cook your own meals, you’ll be happy to know that your grocery bills will be less than in other U.S. cities.
For instance, if your grocery list included sausage, eggs, bread, orange juice, coffee, milk and bananas (sounds like a tasty breakfast, right?), you’ll pay around $18.73. Elsewhere in the U.S., you’d pay around $19.45. Those cost savings will quickly add up and make the cost of living in Indianapolis much more affordable.
Utility costs in Indianapolis
Other monthly fees that can quickly raise the cost of living in Indianapolis are your utilities. Overall, these costs are 3.2 percent higher than the national average. Weather is the biggest culprit for high utility rates. Some say this year’s rates are higher than they’ve seen in the past 5 years.
Extremely cold winters and hot, humid summers require temperature regulating systems, like heaters and air conditioners. Using these each day increases utility fees quickly.
What do the monthly energy costs look like in Indianapolis? You’ll pay an average of $180.69 per month. The median energy rate in the U.S. is $161.20. That nearly $19.50 difference can quickly add up to $233.88 per year. When you figure that rate into the cost of living — or even the average rent — in Indianapolis, you might find that these fees are out of your budget. Thankfully, if they are, you still have options, like finding a neighborhood with cheaper rental rates in or around the city.
Other utility costs to consider include:
- Cell phone service
- Landline (yep, some people still have those!)
- Internet
- Cable
- Garbage and recycling pick-up
- Water and sewage fees
Transportation costs in Indianapolis
IndyGo is the city’s public transit system. A two-hour transfer fare is $1.75, while a 1-day pass is $4. A 7-day pass is $15.75. Or, you can purchase a monthly pass for $60. The public transit score for Indianapolis is 28.
Some people like the option of walking or biking around their city instead of taking the bus. Unfortunately, the walkability and biking scores are relatively low for Indianapolis, coming in at 37 and 51, respectively. However, there are some bike lanes throughout the city and there’s the potential for some people to commute to and from work on the bike.
Another option for getting around the city — and one that most people choose — is owning your own vehicle. Of course, there are costs associated with vehicle ownership that can increase the cost of living in Indianapolis. Overall, transportation costs in Indianapolis are 8.2 percent cheaper than the U.S. average. Some of the regular fees you’ll pay as a vehicle owner include:
- Fuel: The price of gas is $2.67 per gallon in Indianapolis, which is $0.09 cheaper than the national average.
- Maintenance: Let’s look at one of the most common maintenance fees you’ll pay: tire balancing and rotation. In Indiana, you’ll pay $43.90 for this service. Elsewhere in the U.S., you’ll pay $52.40.
- Parking: The cost of a monthly parking pass depends on which garage or lot you choose to park your vehicle. You can expect to pay anywhere from $60 to $100 per month. If you’re paying per day, you can park in an economy lot for $9, a park-and-walk lot for $14 per day or a valet parking lot for $27 per day.
- Tolls: While there aren’t any toll roads in Indianapolis, you’ll come across them if you’re traveling on the I-90 from the north. Toll costs depend on three factors: the number of axles on your vehicle, how far you intend to travel and how you decide to pay (cash or E-ZPass).
Healthcare costs in Indianapolis
Healthcare costs are unique to each person because they’re based on that person’s needs. Someone who is young, healthy and has no dependents will pay much less in healthcare costs than someone with kids or a chronic illness. As you can imagine, the cost of living in Indianapolis can increase quite a bit if you fall into the latter category.
That said, overall healthcare costs in Indianapolis are 14 percent less than in other cities in the county. We can break it down this way:
- Visit the doctor: $92.34 in Indianapolis; $112.81 – U.S. average
- Dental check-up: $87.70 in Indianapolis; $99.44 – national average
- Eye exam: $67.80 in Indianapolis; $105 – U.S. average
Medications in Indiana cost 8.07 percent less for over-the-counter drugs like ibuprofen and 1.01 percent more for prescription medications.
Goods and services costs in Indianapolis
Other fees to include in your cost of living in Indianapolis estimate are those of common goods and services. While it’s impossible to factor in every single cost, you can get an accurate estimate when you factor in those items and services you pay for regularly.
For instance, if you visit the salon each month or always keep a bottle of wine in the house, you’ll need to make sure you have enough in your budget to cover the costs ($38.70 and $3.59, respectively). Overall, the costs of goods and services are 3.1 percent less than the U.S. average.
Other costs you might want to factor into your budget include:
- Clothing
- Shampoo, conditioner
- Deodorant
- Toothpaste
- Check-ups with the vet
- Gym membership/exercise classes
- Date night
Taxes in Indianapolis
The state sales tax rate in Indiana is 7 percent. This is the rate you’ll pay in Indianapolis as there are no county, city or special taxes tacked onto the state sales tax. So, if you purchase something worth $1,000, you’ll pay $70.00 extra in sales tax.
If you choose to purchase a home in Indianapolis, the residential property tax rate is 1.03 percent, meaning you’ll pay around $2,163 annually if you purchase a home valued at $210,000.
Like the sales tax rate, Indiana also has a flat income tax rate of 3.23 percent. No matter what you make, you’ll pay 3.23 percent in taxes.
How much do you need to earn to live in Indianapolis?
The median annual income in Indianapolis is $47,873. If this is what you earn, is it enough to cover the average rent in Indianapolis? Let’s do a little math.
The average rent in Indianapolis is $1,337, which means each year you’ll pay your landlord $16,044. If $16,044 accounts for 30 percent of your budget (which most, though not all, financial experts recommend), you’ll need to earn $53,480 per year. That comes to $5,607 more than the average annual income for residents in this city.
Does this mean the cost of living in Indianapolis is too much and you should try looking for a place to rent in another city or state? Not necessarily. Remember that $1,337 is just an average. You can find cheaper rental fees in various neighborhoods or suburbs of Indianapolis, like the Raymond Park neighborhood where you’ll pay around $1,075 per month, which is still under budget if you earn the average annual income.
If you’re not sure whether Indianapolis will fit your budget, check our free rent calculator to get a better idea of which apartments are within your cost range.
Understanding the cost of living in Indianapolis
Indianapolis provides its residents with all the large city amenities with a small-town feel. It’s a great place to put down roots and raise your family.
If you’re comfortable with the cost of living in Indianapolis and believe you can afford the average rent in Indianapolis, then this is the city for you!
Check out our listings page — complete with helpful search filters — to help you find apartments for rent in Indianapolis that fit all your needs.
Cost of living information comes from The Council for Community and Economic Research.
Rent prices are based on a rolling weighted average from Apartment Guide and Rent.com’s multifamily rental property inventory of two-bedroom apartments as of August 2021. Our team uses a weighted average formula that more accurately represents price availability for each individual unit type and reduces the influence of seasonality on rent prices in specific markets.
The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.
Source: rent.com