If you're a real estate investor looking at Delaware for potential investment opportunities, where should you concentrate your search? You can look into a beach town for vacation rentals or a larger city for rental portfolio. Depending on your investment strategy, you'll have options in Delaware.
Narrowing down the top five real estate investment markets in Delaware will depend upon your real estate investment strategy. If you want to concentrate on vacation rentals, towns on the coast will be at the top of your list. A strategy of buy and hold will look for price appreciation, and someone trying to build a rental portfolio with cash flows will look at home prices and rent.
Our top five list contains a variety of areas within Delaware, with something for every type of investor. Before beginning to invest in Delaware, talk to an experienced, local real estate agent to get a better overview of the market.
Dewey Beach has long been a haven for vacation rentals, but recent years have seen a population shift. More retirees are choosing to convert their rental properties into year-long retirement homes, which has led to a contraction in the vacation rental market. Vacation rental rates have skyrocketed, so it's a great place to buy if you're investing for the vacation market.
Rehoboth Beach is another popular vacation spot, but home prices have been dipping lately. Homes lost 10.9% of their value in 2018 and are predicted to fall another 2.8% in 2019. It's seen job growth of 1.3% year-over-year, and future growth over the next 10 years is predicted to be 37.5%. Now could be a great time to buy, when prices are lower, in anticipation of future growth.
Both Rehoboth and Dewey Beach are in Sussex Country, which has seen the strongest job growth in the state since 2000. Forbes named is as one of the best counties in the country for real estate investment in 2017. The county also has some of the lowest median property tax rates in the country, which is very attractive to investors.
Newark home values dipped slightly in 2018, just 0.8% but will rise 3.3% in 2019. The median home value of $237,200 is affordable, and rents are around $1,475 a month. Unemployment is lower than the national average and the job market grew by 2.7% last year. It has a strong rental market, as 58.4% of the population rents, and excellent schools.
Newark is located in New Castle County, where property taxes average just 0.55% of assessed fair market value. All of the fundamentals are there for a solid investment decision.
Wilmington continues to be a good city for investors. While rents are lower than the nearby Philadelphia area, so are homes, which is leading to renters moving in from other cities. Median home values are $161,200. Despite its problems with crime, it's the largest city in Delaware, but investors should be aware that unemployment is high.
Over 54% of the population rents in Wilmington, which is good for investors. Properties near the University of Delaware will always find a market in the student population. To avoid some of the worst areas and make sure you're buying in a better neighborhood, have a realtor help you find your investment properties.
Bear has some of the highest average rents in the state, at $1,392 a month, but home prices declined by 2.5% last year. The job market has grown 2.7% year-over-year and will grow 32.9% over the next 10 years. It has several great schools, from elementary through high school, which attracts people to the town.
Overall, Delaware ranks 45th in the nation for state and local property taxes per capita, and it has no sales tax.
Whenever you're seeking to invest in a new market it's wise to partner with a real estate professional intimately familiar with the area. The agents in Clever's Network are drawn from nationally recognized brokerages such as Keller Williams and Century 21, and are top sellers at their offices. For more information, contact Clever today.