422 Margaret Ave

Essex, MD 21221

$249,900D+

3 bd · 1.5 ba · 1,652 sqft · Built 1951 · SingleFamily · Active · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,222/mo
• Mortgage (P&I): −$1,311
• Tax + insurance: −$388
• HOA: −$0
• Vac / Maint / Mgmt: −$467
• Net cashflow: $57/mo
• Annual: $689/yr
• Cap rate: 6.57%
• Cash-on-cash: 0.98%
• DSCR: 1.04
• 1% rule: 0.89%
• Cash to close: $69,972

Investor read

• This is a 3-bed/1.5-bath single-family listed at $250k.
• At list price, monthly cash flow is $57 ($689/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 $222k (11.1% below list).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $222k (11.1% 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 79/100 on livability (#60 in MD, #2,277 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, health & safety A; Watch: amenities D+, crime F.
• Baltimore County Public Schools (suburban): math 15% / reading 34% proficiency, ranked #11 of 24 in MD (top 46%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Sussex Elementary (math 8% / reading 12%, grade F, #614 of 860 statewide, top 75%, 430 students, 74% FRL); Deep Creek Middle (math 3% / reading 21%, grade F, #202 of 225 statewide, top 91%, 752 students, 74% FRL); Chesapeake High (math 5% / reading 27%, grade F, #183 of 222 statewide, top 82%, 1,047 students, 64% FRL) — zoned schools average 71% FRL vs 39% district-wide (32 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1951 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.1%/yr); 142 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals at typical pace (median 19d on market — plan ~3-4 weeks tenant-placement turnaround); 1,511 units permitted in Baltimore County in 2024 (643 in 5+ unit buildings).
• Baltimore County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Climate carrying-cost: major wind risk, 50% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.6% vs local median 4.9% in Essex — 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.
• This rent runs 40% of the median local income ($67k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1951 — 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.