1508 Orchard Dr

Salem, VA 24153

$289,950C-

4 bd · 2.0 ba · 2,040 sqft · Built 1947 · SingleFamily · Active · 83 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,260/mo
• Mortgage (P&I): −$1,521
• Tax + insurance: −$764
• HOA: −$0
• Vac / Maint / Mgmt: −$475
• Net cashflow: $-499/mo
• Annual: $-5,987/yr
• Cap rate: 6.13%
• Cash-on-cash: -0.57%
• DSCR: 0.97
• 1% rule: 0.78%
• Cash to close: $81,186

Investor read

• This is a 4-bed/2.0-bath single-family listed at $290k.
• At list price, monthly cash flow is $-499 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $202k (30.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $226k (22.1% below list).
• It's been on market 83 days — a 6% lower offer ($273k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $202k (30.4% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#104 in VA, #3,257 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, schools A; Watch: amenities F, commute F.
• Salem City Public School District (suburban): math 61% / reading 74% proficiency, ranked #35 of 131 in VA (top 27%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: flood insurance adds $460/mo; built in 1947 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.0%/yr); 271 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 268 units permitted in Salem city in 2024 (248 in 5+ unit buildings).
• Salem County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $61k; list at $290k implies a 375% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.1% vs local median 2.9% in Salem — 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 runs 37% of the median local income ($74k/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?
• It's been on market 83 days. Have you received any prior offers? Is the seller open to a 30% concession, seller financing, or rate buy-down credit?
• Built in 1947 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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.