535 Palmetto Dr

Melbourne, FL 32935

$231,000D-

2 bd · 2.0 ba · 1,457 sqft · Built 1943 · SingleFamily · Pending · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,758/mo
• Mortgage (P&I): −$1,211
• Tax + insurance: −$196
• HOA: −$0
• Vac / Maint / Mgmt: −$369
• Net cashflow: $-19/mo
• Annual: $-223/yr
• Cap rate: 6.20%
• Cash-on-cash: -0.35%
• DSCR: 0.98
• 1% rule: 0.76%
• Cash to close: $64,680

Investor read

• This is a 2-bed/2.0-bath single-family listed at $231k.
• At list price, monthly cash flow is $-19 ($-223/yr) — negative.
• To cash-flow at today's rent, offer at most $228k (1.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $176k (23.9% below list).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $176k (23.9% 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 $7k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Brevard (suburban): math 53% / reading 57% proficiency, ranked #19 of 73 in FL (top 26%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Dr. W.J. Creel Elementary School (math 38% / reading 42%, grade F, #1,491 of 2,144 statewide, top 70%, 626 students, 72% FRL); Lyndon B. Johnson Middle School (math 40% / reading 42%, grade F, #353 of 571 statewide, top 63%, 610 students, 61% FRL); Eau Gallie High School (math 20% / reading 49%, grade F, #386 of 667 statewide, top 59%, 1,586 students, 55% FRL) — zoned schools average 63% FRL vs 43% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 38% at this address vs 55% district-wide (-16 pts) — the specific schools serving this property underperform the Brevard average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1943 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 335 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); 4,602 units permitted in Brevard County in 2024 (702 in 5+ unit buildings).
• Brevard County population projected at +15% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 15y 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.
• Climate carrying-cost: severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• This rent runs 33% of the median local income ($65k/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?
• Built in 1943 — 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.