3 Castle Dr

Gilbertsville, PA 19525

$350,000F

3 bd · 2.5 ba · 1,220 sqft · Built 2021 · Townhouse · Pending · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,706/mo
• Mortgage (P&I): −$1,835
• Tax + insurance: −$517
• HOA: −$115
• Vac / Maint / Mgmt: −$358
• Net cashflow: $-1,120/mo
• Annual: $-13,439/yr
• Cap rate: 2.45%
• Cash-on-cash: -13.71%
• DSCR: 0.39
• 1% rule: 0.49%
• Cash to close: $98,000

Investor read

• This is a 3-bed/2.5-bath townhouse listed at $350k. Condition is rated good.
• At list price, monthly cash flow is $-1k ($-13k/yr) — negative.
• To cash-flow at today's rent, offer at most $152k (56.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $171k (51.2% below list).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $152k (56.5% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#129 in PA, #1,013 nationally) — a professional / high-income tenant draw. Strengths: crime A+, employment A+, housing A+; Watch: amenities C-, commute F.
• Boyertown Area SD (suburban): math 44% / reading 53% proficiency, ranked #167 of 539 in PA (top 31%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 16% free/reduced lunch — higher-income household profile.
• Market conditions: 76 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 7d on market — plan ~1-2 weeks tenant-placement turnaround); 1,936 units permitted in Montgomery County in 2024 (530 in 5+ unit buildings).
• Montgomery County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 6y ago; this cycle's ask is 26% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $286k; 22% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: moderate wind risk, 25% 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 2.5% vs local median 3.1% in Gilbertsville — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.