December 2021 Newsletter
2495 Stortz Ave NE, Salem, OR 97301
Single Family | $305,000 | December 28, 2021
Updated 3 bedroom single family house on a corner lot in an up and coming neighborhood in Northeast Salem. Close to shopping, restaurants, recreational facilities (Kroc Center & bowling alley).
Total Sq Ft: 1240. 3 bedroom, 1 bathroom
Lot Size: 7841 sq ft
Year Built: 1954
Property Taxes: $2277 (2021)
What I like about this property
Appears to be move in ready and nicely updated judging by the pictures
Close to the Kroc Center, Department of Transportation headquarters
Corner lot: possibility of building another house/ADU in the backyard and creating another driveway for additional parking.
Potential opportunity to add another bedroom or bathroom by converting the bonus room or garage.
Should be a relatively safe investment and make a good rental property - an updated 3 bedroom house in Salem for around $300k is hard to find in general
Concerns about this property
Some portions of the siding look worn out/damaged
Older house and the listing mentions only cosmetic updates so plumbing, electrical, HVAC, roof, etc, may be older so budget accordingly for these expenses
If it requires too much non-cosmetic repairs, I'd probably pass on it or negotiate a bigger credit with the seller depending on the issues.
Financial Analysis (if used as a rental)
My goal for a single family rental in the current market is simply to break even for now and rely on future rent increases, improvements, appreciation for better cashflow/equity.
Conservative Assumptions Made:
Total monthly rent $1750
Tenant pays for all utilities and takes care of the landscaping - $0 landlord paid utilities
Conventional loan with 25% down payment @ 3.75% interest rate (investment rate)
Property Management 9% (a little bit higher than usual since this is a single family home); Vacancy, CapEx, Maintenance: 5% each
Included a $5k upfront rehab cost for siding repairs and some minor repairs
About the City of Salem
Suggested Information to Verify (Buyer to do due diligence)
Inspect the home well since it is an older construction
Verify with the seller on all the updates that were done if possible
Some areas of Northeast Salem can be a bit sketchy so pay attention to the street and neighbors' houses to see if they are well kept.
Listing mentions a bonus room, not sure if this is referring to the 3rd bedroom or a separate room. If it is truly a bonus room, then maybe it can be a good place to add in a 2nd bathroom
If there is a lot of work that needs to be done, get estimates from contractors or slightly overestimate repairs because of supply chain issues and negotiate with sellers accordingly
Research on city permits if you want to build a new structure in the backyard or add an extra bathroom or bedroom to the existing house