306 Old Colchester Rd #181

Colchester, CT 06420

$74,900B

1 bd · 1.0 ba · 750 sqft · Built 2000 · Condo · Under Contract · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,018/mo
• Mortgage (P&I): −$393
• Tax + insurance: −$125
• HOA: −$205
• Vac / Maint / Mgmt: −$424
• Net cashflow: $872/mo
• Annual: $10,462/yr
• Cap rate: 20.26%
• Cash-on-cash: 49.89%
• DSCR: 3.22
• 1% rule: 2.69%
• Cash to close: $20,972

Investor read

• This is a 1-bed/1.0-bath condo listed at $75k.
• At list price, monthly cash flow is $872 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $75k).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $518 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#43 in CT, #3,018 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, crime A; Watch: amenities F, commute F.
• Salem School District (rural): math 64% / reading 76% proficiency, ranked #17 of 153 in CT (top 11%) — strong family-tenant draw, lease renewals of 3-5y typical; only 9% free/reduced lunch — higher-income household profile.
• Zoned schools: Salem Elementary School (math 65% / reading 77%, grade A-, #73 of 553 statewide, top 13%, 397 students, 19% FRL).
• Market conditions: 29 active listings in the ZIP; 487 units permitted in Southeastern Connecticut Planning Region in 2024 (244 in 5+ unit buildings).
• 2 sale attempts since 9y ago; this cycle's ask has dropped $10k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $21k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 20.3% vs local median 2.5% in Colchester — 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.

Questions for listing agent

• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.