November 2021 Newsletter

4796 Clarence Ct SE & 225 Arlene Ave SE, Salem OR

Duplex | $499,900 | November 11, 2021

Single level duplex in a highly desirable South Salem neighborhood. Close to good schools, neighborhood park, shopping, etc.

Unit Mix: 1 3 bed/2 bath unit and 1 2 bed/1 bath unit
Total Sq Ft: 2046. 3 bedroom unit is 1090 sq ft and 2 bedroom unit is 956 sq ft
Lot Size: 7405 sq ft
Year Built: 1976
Property Taxes: $3956 (2021)

What I like about this property

  • Excellent South Salem Location! It's in a quiet residential neighborhood of mostly single family homes. Walking distance to the park, schools, grocery store, restaurants etc.

  • Entrances to the units are on different streets since it's a corner lot, which makes it feel like 2 single family homes

  • One unit is vacant which makes it easy for someone to owner occupy one side while getting some rental income from the other side

  • Safe investment!

Concerns about this property

  • Will likely need some sort of landscaping service for mowing, weeding and pruning/trimming services to maintain the exterior apperance of the property which adds to the owner's expenses unless the owner is willing to do the work themselves.

Financial Analysis

Conservative Assumptions Made:

  • Total monthly rent $3250: 3 bedroom rent at $1650 and 2 bedroom at $1450 with $75 flat water charge for each unit (purposely keeping the water bill lower than actual to avoid over billing the tenants)

  • Landlord Paid Utilities $200 a month for water and sewer ($100 per unit) - this water bill may be billed back to the tenant if desired

  • Landscaping: $150/month for mowing, weeding and pruning services

  • Conventional loan with 25% down payment @ 3.5% interest rate (FHA loan with 3.5% down payment may be possible as well)

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

  • Included a $20k upfront rehab cost for some light cosmetic updates/repairs

4796 Clarence Ct SE

About the City of Salem

  • Salem is the capital of Oregon and is the second largest city in the state with a population over 400,000 in the metro area

  • Home to the Oregon State Fair

  • Major employers include: State of Oregon, Salem Health, Willamette University, Chemeketa Community College, etc.

  • Amazon Distribution Center opened in 2019

Suggested Information to Verify (Buyer to do due diligence)

  • Always do your own research and analysis on properties!

  • Gather information about current rents and lease terms. Current tenants are likely paying below market rent.

  • Research on the Oregon Landlord Tenant laws including Covid specific restrictions or consult a real estate attorney

  • Verify who pays what utilities. It is likely that the owner pays for water/sewer bill because most multifamily homes bigger than a duplex do not have separate water meters. Owner may also be responsible for landscaping and trash pickup.

Sources