726 Elizabeth Ave

Salem, VA 24153

$176,439C

3 bd · 1.0 ba · 884 sqft · Built 1950 · SingleFamily · Active · 147 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,519/mo
• Mortgage (P&I): −$925
• Tax + insurance: −$193
• HOA: −$0
• Vac / Maint / Mgmt: −$319
• Net cashflow: $82/mo
• Annual: $982/yr
• Cap rate: 6.85%
• Cash-on-cash: 1.99%
• DSCR: 1.09
• 1% rule: 0.86%
• Cash to close: $49,403

Investor read

• This is a 3-bed/1.0-bath single-family listed at $176k.
• At list price, monthly cash flow is $82 ($982/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $152k (13.9% below list).
• It's been on market 147 days — a 12% lower offer ($155k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $152k (13.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#104 in VA, #3,257 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, schools A; Watch: amenities F, commute F.
• Salem City Public School District (suburban): math 61% / reading 74% proficiency, ranked #35 of 131 in VA (top 27%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.0%/yr); 271 active listings in the ZIP; 13 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 268 units permitted in Salem city in 2024 (248 in 5+ unit buildings).
• Salem County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.8% vs local median 2.9% in Salem — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• It's been on market 147 days. Have you received any prior offers? Is the seller open to a 14% concession, seller financing, or rate buy-down credit?
• Built in 1950 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.