204 N Grove Ave

Highland Springs, VA 23075

$235,000D-

3 bd · 1.0 ba · 1,081 sqft · Built 1959 · SingleFamily · Pending · 28 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,745/mo
• Mortgage (P&I): −$1,232
• Tax + insurance: −$232
• HOA: −$0
• Vac / Maint / Mgmt: −$366
• Net cashflow: $-85/mo
• Annual: $-1,026/yr
• Cap rate: 5.86%
• Cash-on-cash: -1.56%
• DSCR: 0.93
• 1% rule: 0.74%
• Cash to close: $65,800

Investor read

• This is a 3-bed/1.0-bath single-family listed at $235k.
• At list price, monthly cash flow is $-85 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $220k (6.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $175k (25.7% below list).
• It's been on market 28 days — a 2% lower offer ($231k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $175k (25.7% 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 72/100 on livability (#196 in VA) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: employment C-, amenities F, health & safety F.
• Henrico County Public School District (suburban): math 49% / reading 64% proficiency, ranked #68 of 131 in VA (top 52%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 63 active listings in the ZIP; 13 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 1,826 units permitted in Henrico County in 2024 (785 in 5+ unit buildings).
• Henrico County population projected at +21% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 9 sale attempts since 21y 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 $104k; list at $235k implies a 126% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• This rent runs 38% of the median local income ($56k/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 1959 — 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.