221 E Montauk Hwy

Hampton Bays, NY 11946

$849,000B+

5 bd · 3.0 ba · 1,840 sqft · Built 1996 · SingleFamily · Pending · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $11,255/mo
• Mortgage (P&I): −$4,452
• Tax + insurance: −$1,023
• HOA: −$0
• Vac / Maint / Mgmt: −$2,364
• Net cashflow: $3,417/mo
• Annual: $41,000/yr
• Cap rate: 11.12%
• Cash-on-cash: 17.25%
• DSCR: 1.77
• 1% rule: 1.33%
• Cash to close: $237,720

Investor read

• This is a 5-bed/3.0-bath single-family listed at $849k.
• At list price, monthly cash flow is $3k ($41k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($11k rent vs $849k).
• It's been on market 25 days — a 2% lower offer ($836k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $836k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $25k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#551 in NY) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, health & safety B+; Watch: amenities F, commute F, cost of living F.
• Hampton Bays Union Free School District (suburban): math 45% / reading 44% proficiency, ranked #434 of 590 in NY (top 74%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+16.1%/yr); 172 active listings in the ZIP; 13 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 1,366 units permitted in Suffolk County in 2024 (216 in 5+ unit buildings).
• Suffolk County population projected to shrink 5% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $33k; list at $849k implies a 2473% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $238k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: severe wind risk, 80% chance of damaging wind over 30y — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.1% vs local median 6.4% in Hampton Bays — 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.
• At $11,255/mo this rent would consume 101% of the median local household income ($134k/yr) (locally 199% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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?
• 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.