496 Grove Ave

Metuchen, NJ 08820

$350,000C-

4 bd · 1.5 ba · 1,704 sqft · Built 1932 · SingleFamily · Pending · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,089/mo
• Mortgage (P&I): −$1,835
• Tax + insurance: −$997
• HOA: −$0
• Vac / Maint / Mgmt: −$859
• Net cashflow: $398/mo
• Annual: $4,773/yr
• Cap rate: 7.66%
• Cash-on-cash: 4.87%
• DSCR: 1.22
• 1% rule: 1.17%
• Cash to close: $98,000

Investor read

• This is a 4-bed/1.5-bath single-family listed at $350k.
• At list price, monthly cash flow is $398 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $350k).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• 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 84/100 on livability (#29 in NJ, #766 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, commute A+; Watch: cost of living F.
• Edison Township School District (suburban): math 44% / reading 64% proficiency, ranked #91 of 472 in NJ (top 19%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 13% free/reduced lunch — higher-income household profile.
• Watch-outs: property tax is 2.9% of price; built in 1932 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.3%/yr); 105 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 1,971 units permitted in Middlesex County in 2024 (1,193 in 5+ unit buildings).
• Middlesex County population projected at +15% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major wind risk, 27% 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 7.7% vs local median 2.4% in Metuchen — 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.

Questions for listing agent

• Built in 1932 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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?
• 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.