South Bend, IN — Rental Investment Analysis
🟡MODERATE— average returnsData: HUD FMR FY2024 + Zillow ZHVI April 2026 + Freddie Mac rates. Last updated June 2026.
Investment Summary
As of 2026, rental properties in South Bend, IN yield a 5.3% cap rate. Median home price is $177,628 with 3-bedroom rents at $1,270/month.
South Bend is a moderate market — workable but not exceptional for cash flow. At $177,628 median home price, South Bend is affordable by national standards and within reach for most conventional loans. With 3-bedroom rents around $1,270/month, the 5.3% cap rate tells the story. At current prices and rates, expect to lose about $155/month — negative cash flow unless you put more down or find below-market deals.
At 0.72% on the 1% rule, rents are low relative to purchase prices. You'd need a significant discount from asking price to make the numbers work. DSCR of 0.84 is below 1.0, meaning rental income doesn't cover the mortgage. DSCR lenders will likely decline this market at current prices.
Bottom line: South Bend offers a balance of moderate cash flow and growth potential. Good for investors who want some income while building equity over time.
Data sources: HUD Fair Market Rents (FY2024), Zillow Home Value Index (April 2026), Freddie Mac Primary Mortgage Market Survey.
Cap Rate
5.3%
Below average
Monthly Cash Flow
-$155
After all expenses
Price-to-Rent
11.6
Investor-friendly
DSCR
0.84
Fails
Key Metrics
- Median Home Price
- $177,628
- Average Rent (3BR)
- $1,270/mo
- Price-to-Rent Ratio
- 11.6(good)
- 1% Rule
- 0.72%(fails — need 1%+)
- Cash-on-Cash Return
- -4.6%
- Vacancy Rate
- 8.0%
Market Strength
- Unemployment Rate
- 3.2%(-1.1% vs national)
- Rent Growth (YoY)
- +2.9%(national avg)
- Population Growth
- +0.4% YoY
Property Tax Rate
0.81%
of assessed value (IN avg)
Median Income
$61,944
household (IN avg)
Rent-to-Income
24.6%
Affordable
Section 8 Max Rent
$1,270/mo
3BR voucher payment
IN Investor Climate
Landlord Friendly
8/10
State Income Tax
Has state tax
Property Tax
0.81% effective
Population Trend
+0.4% (3yr)
Population Movement (Tax Year 2021→2022)
Net Migration
-322 households
SHRINKING
Total Inflow
2,793
households moved in
Avg Income (New Residents)
$59,638
per household
Where they're coming from:
Where residents are leaving to:
Net outflow may indicate weakening demand — but can mean lower prices and higher cap rates.
Best Zip Codes in South Bend for Investors
All Zip Codes in South Bend
| Zip | Cap Rate | Cash Flow | Home Price | Rent (3BR) | DSCR |
|---|---|---|---|---|---|
| 46613 | 9.6% | +$300 | $111,287 | $1,280/mo | 1.51 |
| 46616 | 7.3% | +$118 | $146,814 | $1,350/mo | 1.15 |
| 46619 | 7.3% | +$108 | $137,224 | $1,260/mo | 1.15 |
| 46601 | 6.6% | +$31 | $148,727 | $1,260/mo | 1.04 |
| 46628 | 5.5% | -$133 | $175,543 | $1,280/mo | 0.86 |
| 46615 | 5.2% | -$178 | $179,713 | $1,260/mo | 0.81 |
| 46637 | 3.8% | -$552 | $253,411 | $1,410/mo | 0.59 |
| 46617 | 3.5% | -$780 | $320,174 | $1,680/mo | 0.54 |
| 46614 | 3.4% | -$591 | $241,048 | $1,260/mo | 0.54 |
| 46635 | 3.0% | -$749 | $264,526 | $1,260/mo | 0.47 |