534 Rainbow Ct #102

Newport News, VA 23608

$164,900D-

2 bd · 2.0 ba · 1,250 sqft · Built 1990 · Condo · Active · 29 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,616/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$275
• HOA: −$300
• Vac / Maint / Mgmt: −$339
• Net cashflow: $-163/mo
• Annual: $-1,957/yr
• Cap rate: 5.11%
• Cash-on-cash: -4.24%
• DSCR: 0.81
• 1% rule: 0.98%
• Cash to close: $46,172

Investor read

• This is a 2-bed/2.0-bath condo listed at $165k. Condition is rated good.
• At list price, monthly cash flow is $-163 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $141k (14.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $162k (2.0% below list).
• It's been on market 29 days — a 2% lower offer ($162k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $141k (14.3% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#123 in VA, #4,018 nationally) — a middle-class / working-renter tenant base. Strengths: health & safety A+, cost of living A, housing A; Watch: crime F, commute F.
• Newport News City Public School District (urban): math 34% / reading 54% proficiency, ranked #112 of 131 in VA (top 86%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+6.9%/yr); 215 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 522 units permitted in Newport News city in 2024 (458 in 5+ unit buildings).
• Newport News County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y; extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.1% vs local median 4.2% in Newport News — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?
• 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.