january 2022 Newsletter

600-602 Miller st, silverton OR 97381

Duplex | $429,900 | January 9, 2022

5 bedroom duplex next to the YMCA/swimming pool and walking distance to the historic downtown and local parks. This is a great long term or short term investment property!
Total Sq Ft: 1794
Unit Mix: 3 bed/1 bath (1002 sq ft), 2 bed/1 bath (792 sq ft)
Lot Size: 0.15 acre
Year Built: 1947
Property Taxes: $2842 (2021)

What I like about this property

  • Great family friendly location close to parks, recreation, schools, hospital, shops, etc.

  • Silverton rents are high and rentals are in high demand

  • Short term rental potential in a safe tourist friendly city

Concerns about this property

  • Somewhat of a strange triangular lot right next to the swimming pool parking lot

  • Old building (built in 1947)

  • No garage, limited parking

Financial Analysis

Analysis is for long term rentals but this property will make a great AirBnB as well. If you analyze it as an AirBnB, be sure to include all utility costs (incluing cable/internet), upfront costs to furnish the units and higher property management costs if you decide to not manage yourself.

Highlights

  • Monthly Cashflow: $396.77

  • Cap Rate 5.28

  • Cash on Cash Return 4.18%

Assumptions Made:

  • Total monthly rent $3200 ($1700 for 3 bedroom, $1500 for 2 bedroom)

  • Landlord pays $200/month for water/sewer and $100/month for lawn maintenance for a total of $3600 in annual utilities

  • Conventional loan with 25% down payment @ 3.75% interest rate (may be eligible for FHA owner occupied loan as well)

  • Property Management 8%; Vacancy, CapEx, Maintenance: 5% each

Link to Financial Analysis Spreadsheet

About the City of Silverton

  • Silverton is known as Oregon's Garden City! It's a gorgeous city with unique shops in the historic downtown, highly rated schools, plenty of walking trails.

  • Close to the Oregon Garden and Silver Falls State Park

  • Major employers include: Silver Falls School District, Silverton Hospital, Champion Homes, Mallorie's Dairy (Source: Wikipedia)

  • Steady population growth since the 1970s

Buyer's Due Diligence

  • Inspect the home well since it is an older construction

  • Review investment documents from the seller (lease agreements, rent rolls etc.). Get professional help if there is something that you don't understand.

  • Verify who pays what utilities (water, sewer, electricity, gas, etc.)

  • Research on city permits if you want to use it as a short term rental

Sources