3111 Cottonwood Bnd #1704

Verandah, FL 33905

$230,000D+

3 bd · 3.0 ba · 1,833 sqft · Built 2006 · Townhouse · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,419/mo
• Mortgage (P&I): −$1,206
• Tax + insurance: −$886
• HOA: −$799
• Vac / Maint / Mgmt: −$718
• Net cashflow: $-191/mo
• Annual: $-2,286/yr
• Cap rate: 7.52%
• Cash-on-cash: 4.40%
• DSCR: 1.20
• 1% rule: 1.49%
• Cash to close: $64,400

Investor read

• This is a 3-bed/3.0-bath townhouse listed at $230k.
• At list price, monthly cash flow is $-191 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $196k (14.6% below list).
• Meets the 1% rule at list price ($3k rent vs $230k).
• It's been on market 16 days — a 2% lower offer ($227k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $196k (14.6% 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 $7k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Lee (suburban): math 47% / reading 50% proficiency, ranked #42 of 73 in FL (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $427/mo; HOA is 23% of rent.
• Market conditions: Rents soft (-3.0%/yr); 763 active listings in the ZIP; 17 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 15,411 units permitted in Lee County in 2024 (4,686 in 5+ unit buildings).
• Lee County population projected at +44% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 8 sale attempts since 8y 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.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→29/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $3,419/mo this rent would consume 57% of the median local household income ($72k/yr) (locally 1358% 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?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• This sits on a lake — are riparian / water-frontage rights deeded with the parcel? Any dock permits, shoreline easements, or HOA water-use restrictions?
• What's the documented flood / surge / shoreline-erosion history here (FEMA AND non-FEMA — e.g., storm surge, creek backup, septic-field saturation)?
• Any water-quality or seasonal algae-bloom issues that affect tenant satisfaction or short-term-rental demand?