21 Nichols Ln

Westerly, RI 02891

$289,000D

1 bd · 1.0 ba · 1,148 sqft · Built 1955 · SingleFamily · Pending · 39 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,938/mo
• Mortgage (P&I): −$1,516
• Tax + insurance: −$279
• HOA: −$0
• Vac / Maint / Mgmt: −$407
• Net cashflow: $-264/mo
• Annual: $-3,168/yr
• Cap rate: 5.20%
• Cash-on-cash: -3.92%
• DSCR: 0.83
• 1% rule: 0.67%
• Cash to close: $80,920

Investor read

• This is a 1-bed/1.0-bath single-family listed at $289k.
• At list price, monthly cash flow is $-264 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $242k (16.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $194k (33.0% below list).
• It's been on market 39 days — a 3% lower offer ($280k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $194k (33.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#10 in RI, #4,529 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, health & safety A+; Watch: cost of living D+, amenities F, commute F.
• Westerly (suburban): math 19% / reading 39% proficiency, ranked #21 of 39 in RI (top 54%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+11.7%/yr); 114 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals leasing fast (median 3d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 311 units permitted in Washington County in 2024 (45 in 5+ unit buildings).
• Washington County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts; this cycle's ask has dropped $21k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $225k; 28% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 5.2% vs local median 1.8% in Westerly — 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

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 39 days. Have you received any prior offers? Is the seller open to a 33% concession, seller financing, or rate buy-down credit?
• Built in 1955 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.