729 Skyline Dr

Lancaster, PA 17601

$265,000B-

3 bd · 1.0 ba · 1,327 sqft · Built 1952 · MultiFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,016/mo
• Mortgage (P&I): −$1,390
• Tax + insurance: −$390
• HOA: −$0
• Vac / Maint / Mgmt: −$1,053
• Net cashflow: $2,183/mo
• Annual: $26,200/yr
• Cap rate: 16.18%
• Cash-on-cash: 35.31%
• DSCR: 2.57
• 1% rule: 1.89%
• Cash to close: $74,200

Investor read

• This is a 3-bed/1.0-bath multifamily listed at $265k.
• At list price, monthly cash flow is $2k ($26k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $265k).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#71 in PA, #498 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+; Watch: crime C-, employment C-.
• Manheim Township SD (suburban): math 53% / reading 68% proficiency, ranked #61 of 539 in PA (top 11%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1952 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+4.0%/yr); 322 active listings in the ZIP; 23 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 43% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 1,093 units permitted in Lancaster County in 2024 (201 in 5+ unit buildings).
• Lancaster County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• At projected returns (-3.0% appreciation + 4.0% rent growth), your $74k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 16.2% vs local median 4.4% in Lancaster — 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.
• At $5,016/mo this rent would consume 59% of the median local household income ($102k/yr) (locally 1296% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1952 — 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.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.