3924 Penn Ave

Sinking Spring, PA 19608

$219,900F

2 bd · 1.0 ba · 899 sqft · Built 1910 · Townhouse · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,641/mo
• Mortgage (P&I): −$1,153
• Tax + insurance: −$273
• HOA: −$0
• Vac / Maint / Mgmt: −$345
• Net cashflow: $-130/mo
• Annual: $-1,566/yr
• Cap rate: 5.58%
• Cash-on-cash: -2.54%
• DSCR: 0.89
• 1% rule: 0.75%
• Cash to close: $61,572

Investor read

• This is a 2-bed/1.0-bath townhouse listed at $220k.
• At list price, monthly cash flow is $-130 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $197k (10.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $164k (25.4% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $164k (25.4% 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 77/100 on livability (#346 in PA, #3,047 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Wilson SD (suburban): math 46% / reading 59% proficiency, ranked #127 of 539 in PA (top 24%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Green Valley El Sch (math 56% / reading 64%, grade B-, #371 of 1,518 statewide, top 25%, 537 students, 22% FRL); Wilson West Ms (math 30% / reading 60%, grade D, #187 of 512 statewide, top 38%, 739 students, 31% FRL); Wilson Hs (math 61% / reading 24%, grade F, #225 of 437 statewide, top 51%, 2,059 students, 34% FRL).
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 91 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 258 units permitted in Berks County in 2024 (27 in 5+ unit buildings).
• Berks County population projected at +3% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $185k; 19% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.6% vs local median 2.9% in Sinking Spring — 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 is only 18% of the median local income ($110k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 1910 — 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 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?
• 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.