544 Prospect Ave

Newport, TN 37821

$82,000B-

2 bd · 1.0 ba · 812 sqft · Built 1930 · SingleFamily · Active · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,132/mo
• Mortgage (P&I): −$430
• Tax + insurance: −$104
• HOA: −$0
• Vac / Maint / Mgmt: −$238
• Net cashflow: $360/mo
• Annual: $4,325/yr
• Cap rate: 11.57%
• Cash-on-cash: 18.84%
• DSCR: 1.84
• 1% rule: 1.38%
• Cash to close: $22,960

Investor read

• This is a 2-bed/1.0-bath single-family listed at $82k.
• At list price, monthly cash flow is $360 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $82k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $567 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 56/100 on livability (#347 in TN) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A-; Watch: crime F, amenities F, commute F.
• Newport (town): math 34% / reading 37% proficiency, ranked #36 of 139 in TN (top 26%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Newport Grammar School (math 34% / reading 37%, grade F, #310 of 952 statewide, top 33%, 701 students, 0% FRL) — zoned schools average 0% FRL vs 46% district-wide (46 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 219 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 13 units permitted in Cocke County in 2024 (0 in 5+ unit buildings).
• Cocke County population projected at -19% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $23k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.6% vs local median 2.9% in Newport — 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 1930 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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?
• 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.