228 Cherry Ln

Kennett Square, PA 19348

$475,000D-

3 bd · 2.5 ba · 2,542 sqft · Built 2003 · Townhouse · Pending · 31 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,294/mo
• Mortgage (P&I): −$2,491
• Tax + insurance: −$325
• HOA: −$365
• Vac / Maint / Mgmt: −$692
• Net cashflow: $-579/mo
• Annual: $-6,951/yr
• Cap rate: 4.83%
• Cash-on-cash: -5.23%
• DSCR: 0.77
• 1% rule: 0.69%
• Cash to close: $133,000

Investor read

• This is a 3-bed/2.5-bath townhouse listed at $475k.
• At list price, monthly cash flow is $-579 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $373k (21.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $329k (30.7% below list).
• It's been on market 31 days — a 3% lower offer ($461k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $329k (30.7% 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 $14k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#202 in PA, #1,781 nationally) — a professional / high-income tenant draw. Strengths: housing A+, crime A-, amenities A-; Watch: commute D+.
• Kennett Consolidated SD (suburban): math 39% / reading 58% proficiency, ranked #135 of 539 in PA (top 25%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+5.8%/yr); 164 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 1,513 units permitted in Chester County in 2024 (354 in 5+ unit buildings).
• Chester County population projected at +6% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 10 sale attempts since 22y ago; this cycle's ask has dropped $25k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $300k; list at $475k implies a 58% gain — meaningful room to come down on a strong offer.
• 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.
• Cap rate 4.8% vs local median 2.6% in Kennett Square — 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 32% of the median local income ($124k/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 31 days. Have you received any prior offers? Is the seller open to a 31% concession, seller financing, or rate buy-down credit?
• 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.
• 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.