1200 Bay Ave

Highland Beach, MD 21403

$669,000D+

5 bd · 2.0 ba · 2,399 sqft · Built 2001 · SingleFamily · Pending · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,387/mo
• Mortgage (P&I): −$3,508
• Tax + insurance: −$754
• HOA: −$0
• Vac / Maint / Mgmt: −$1,131
• Net cashflow: $-7/mo
• Annual: $-89/yr
• Cap rate: 6.28%
• Cash-on-cash: -0.05%
• DSCR: 1.00
• 1% rule: 0.81%
• Cash to close: $187,320

Investor read

• This is a 5-bed/2.0-bath single-family listed at $669k.
• At list price, monthly cash flow is $-7 ($-89/yr) — negative.
• To cash-flow at today's rent, offer at most $668k (0.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $539k (19.5% below list).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $539k (19.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $20k of value loss. Plan a longer hold.
• Location reads 58/100 on livability (#386 in MD) — a working-class tenant base; expect higher turnover. Strengths: employment A+, housing A+, crime A; Watch: schools C-, amenities F, commute F.
• Anne Arundel County Public Schools (suburban): math 20% / reading 37% proficiency, ranked #10 of 24 in MD (top 42%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: Rents rising (+3.4%/yr); 183 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 1,303 units permitted in Anne Arundel County in 2024 (299 in 5+ unit buildings).
• Anne Arundel County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $100k; list at $669k implies a 569% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wind risk, 75% chance of damaging wind over 30y; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $5,387/mo this rent would consume 52% of the median local household income ($123k/yr) (locally 858% 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?
• 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?
• 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.