26 Island Ave

Orono, ME 04473

$355,000D-

4 bd · 1.0 ba · 1,350 sqft · Built 1930 · SingleFamily · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,927/mo
• Mortgage (P&I): −$1,862
• Tax + insurance: −$476
• HOA: −$0
• Vac / Maint / Mgmt: −$615
• Net cashflow: $-25/mo
• Annual: $-303/yr
• Cap rate: 6.21%
• Cash-on-cash: -0.30%
• DSCR: 0.99
• 1% rule: 0.82%
• Cash to close: $99,400

Investor read

• This is a 4-bed/1.0-bath single-family listed at $355k.
• At list price, monthly cash flow is $-25 ($-303/yr) — negative.
• To cash-flow at today's rent, offer at most $351k (1.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $293k (17.5% below list).
• It's been on market 21 days — a 2% lower offer ($350k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $293k (17.5% 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 $11k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#49 in ME) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, health & safety A+; Watch: amenities F, commute F, employment F.
• RSU 26 (suburban): math 88% / reading 90% proficiency, ranked #39 of 112 in ME (top 35%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Asa C Adams School (math 87% / reading 87%, grade A+, #77 of 294 statewide, top 33%, 308 students, 30% FRL); Orono Middle School (math 92% / reading 92%, grade A+, #10 of 85 statewide, top 13%, 154 students, 27% FRL); Orono High School (math 92% / reading 92%, grade A+, #27 of 108 statewide, top 36%, 373 students, 34% FRL).
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 27 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 440 units permitted in Penobscot County in 2024 (40 in 5+ unit buildings).
• Penobscot County population projected at -17% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 6 sale attempts since 9y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $160k; list at $355k implies a 122% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 27% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• At $2,927/mo this rent would consume 57% of the median local household income ($62k/yr) (locally 423% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 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 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.