538 S Ashley St

Ann Arbor, MI 48103

$565,000D-

3 bd · 2.0 ba · 1,305 sqft · Built 1901 · SingleFamily · Active · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,341/mo
• Mortgage (P&I): −$2,963
• Tax + insurance: −$1,190
• HOA: −$0
• Vac / Maint / Mgmt: −$702
• Net cashflow: $-1,514/mo
• Annual: $-18,169/yr
• Cap rate: 3.08%
• Cash-on-cash: -11.49%
• DSCR: 0.49
• 1% rule: 0.59%
• Cash to close: $158,200

Investor read

• This is a 3-bed/2.0-bath single-family listed at $565k.
• At list price, monthly cash flow is $-2k ($-18k/yr) — negative.
• To cash-flow at today's rent, offer at most $298k (47.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $334k (40.9% below list).
• It's been on market 33 days — a 3% lower offer ($548k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $298k (47.3% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $17k of value loss. Plan a longer hold.
• Location reads 88/100 on livability (#10 in MI, #155 nationally) — a professional / high-income tenant draw. Strengths: schools A+, amenities A+, commute A+; Watch: cost of living D.
• Ann Arbor Public Schools (urban): math 71% / reading 81% proficiency, ranked #6 of 540 in MI (top 1%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: built in 1901 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 228 active listings in the ZIP; 23 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 996 units permitted in Washtenaw County in 2024 (492 in 5+ unit buildings).
• Washtenaw County population projected at +25% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 20y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $263k; list at $565k implies a 115% gain — meaningful room to come down on a strong offer.
• Cap rate 3.1% vs local median 2.5% in Ann Arbor — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• This rent runs 35% of the median local income ($116k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 33 days. Have you received any prior offers? Is the seller open to a 47% concession, seller financing, or rate buy-down credit?
• Built in 1901 — 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.
• 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?
• 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.