142 Spring Hill Rd

Skillman, NJ 08558

$500,000D+

2 bd · 2.0 ba · 1,686 sqft · Built 1945 · SingleFamily · Pending · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,223/mo
• Mortgage (P&I): −$2,622
• Tax + insurance: −$1,037
• HOA: −$0
• Vac / Maint / Mgmt: −$887
• Net cashflow: $-324/mo
• Annual: $-3,885/yr
• Cap rate: 5.52%
• Cash-on-cash: -2.77%
• DSCR: 0.88
• 1% rule: 0.84%
• Cash to close: $140,000

Investor read

• This is a 2-bed/2.0-bath single-family listed at $500k.
• At list price, monthly cash flow is $-324 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $443k (11.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $422k (15.5% below list).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $422k (15.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $15k of value loss. Plan a longer hold.
• Location reads 61/100 on livability (#463 in NJ) — a middle-class / working-renter tenant base. Strengths: schools A+, crime A+, employment A+; Watch: amenities F, commute F, cost of living F.
• Montgomery Township School District (rural): math 59% / reading 71% proficiency, ranked #15 of 472 in NJ (top 3%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 3% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 44 active listings in the ZIP; 678 units permitted in Somerset County in 2024 (296 in 5+ unit buildings).
• Somerset County population projected at +13% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 17y 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: major wind risk, 27% chance of damaging wind over 30y; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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 1945 — 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 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?
• 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.