Fayetteville, AR - College rental - buy & hold investment

[Sarah Bull]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $366,500
Cash invested: $73,300

This Investment property is located in a college-oriented neighborhood near the University of Arkansas. Built in 2020, there should be little to no upkeep for a few years. The 4 bedrooms will be leased individually to college students. The monthly rent is 2,800 ($700 per student). This investment projects a cap rate of 6.88%. The cash on cash return projection, after a 20% down payment for a 30-year note at 4.25% is 10.11%. The monthly cash flow after expenses is $660. There is a higher monthly HOA fee that cut into the monthly cash flow a bit. This HOA is to completely take care of everything outside the home, good for college students and the preservation of the curb appeal and value of the investment. Couple these projected returns with the high appreciation rate of the area (Northwest Arkansas experienced a 14% appreciation rate during 2021 and an average of 13% over the last five years) and this turned out to be a good investment!