Real Estate investors looking for cash flow and appreciation are flocking to Delaware to build rental portfolios. The First State is a current favorite of real estate investors due to many factors including a strong and stable economy, a growing and highly education population with a healthy demand for housing! Easy Street Capital is proud to be a leading provider of investment property loans for real estate investors looking to build rental portfolios in Delaware!
Types of Investment Property Loans in Delaware
When it comes to real estate investing in Delaware, there are a variety of markets and types of investment property loans to choose from. Delaware has plenty of older properties in need of renovators to restore them to rent-ready status. For investors adept at rehabbing older properties, hard money renovation loans are a perfect choice! These investment property loans allow you to buy a property quickly and finance your rehab costs as well! Once you are done, you can either “flip” the property for a quick return or pursue the BRRRR Strategy buy renting it out and then refinancing into a long-term, low-rate DSCR loan!
Long-term DSCR Loans are also great for investing in turnkey rental properties. Turnkey refers to properties that are already rent-ready and require no renovations. Move-in ready single family homes and multi-unit properties (such as duplexes or triplexes) are great for cash flow and price appreciation. Most DSCR Loans are fixed rate for thirty years, locking you into a fixed interest rate for the long-term. While, if historical patterns continue, rents and appreciation increase steadily each year. Bottom line, debt costs stay the same while cash flow increases!
Delaware: Landlord-Friendly State
In terms of regulation, Delaware is considered a landlord-friendly state. Owners of rental properties, such as typical DSCR Loan borrowers, are secure investing in the state. Unlike some other states, Delaware does not have any form of rent control. This means rental property owners are free to set rents at whatever level the market will bear, giving them the flexibility to maximize rents and cash flow.
In addition, if a tenant fails to pay rent or violates the terms of their lease, Delaware rental property owners can begin the eviction process relatively quickly. For example, landlords can serve a tenant with a “5-day notice to quit” if they fail to pay rent. After just five days, the landlord can file a complaint for eviction in court. This provides landlords with a legal recourse to promptly address tenant issues, ensuring they can maintain the profitability of their investment.
Overall, Delaware is a landlord-friendly state that offers many advantages for investors interested in rental properties. With its favorable rental market conditions, landlords can enjoy the freedom to set rents at market rates and take necessary actions to protect their investment.
Where To Invest In Real Estate In Delaware
Delaware is a favorite market for real estate investors because despite it’s small size, it has diverse options. There are varying markets that offer great potential for each type of real estate investor. Wilmington is the states largest city and capital and the economic powerhouse of the state. Newark, Delaware (not to be confused with Newark, New Jersey) is the third largest city and home to the University of Delaware. Dover is the capital of the state and second largest city. Middletown is a fast-growing market, with good proximity to Philadelphia, Baltimore and Wilmington. Finally, Rehoboth Beach, known is the “Nation’s Summer Capital,” is a great market for beach vacation rentals.
Wilmington is the largest city in Delaware, with a population of over 70,000 people. The city has a diverse economy with a mix of industries such as healthcare, education, and finance. Wilmington is home to several major corporations, including DuPont, Bank of America, and JPMorgan Chase. These companies provide a solid employment base for renters. Additionally, the city has a growing healthcare industry, with several hospitals and medical centers located within the city limits.
Wilmington’s strong economy and growing population make it an attractive market for real estate investors. The city’s job market and population growth create a steady demand for rental properties, with opportunities for long-term leases, medium-term rentals, and short-term rentals. The city also has many attractions for visitors, including the Wilmington Riverwalk, the Delaware Art Museum, and the Brandywine Zoo. This provides a robust market for short-term rentals.
Overall, Wilmington’s strong economy and diverse attractions make it a great market for real estate investors looking to invest in both single-family and multifamily properties. The city’s location, with its proximity to other major metropolitan areas such as Philadelphia and Baltimore, adds to its appeal. With a low cost of living compared to nearby cities and a strong demand for rental properties, Wilmington is a promising market for investors interested in high cash flow and steady returns.
Newark, Delaware is home to the University of Delaware, the flagship university of the state, with an enrollment of over 24,000 students. However, Newark is not just a college town. The city has a population of over 33,000 people and is located in the heart of the state, making it a strategic location for real estate investors. Newark is also home to numerous parks, restaurants, and shops, providing a wide range of attractions for residents and visitors alike.
Real estate investors who specialize in niche strategies, such as student housing or short-term rentals, will find Newark to be a great market. The University of Delaware attracts a large number of students who need rental properties, creating a steady demand for student housing. Investors who select properties located near campus and that rent to reliable students can earn high returns. Additionally, Newark’s location near major cities like Philadelphia and Baltimore makes it an attractive location for short-term rentals for those looking to explore the surrounding areas.
Newark is also a city that hosts numerous events throughout the year, such as the Delaware Wine and Beer Festival and the Main Street Jazz Fest. These events attract a large number of visitors, creating a steady demand for short-term rental properties. Overall, Newark’s diverse attractions and growing population make it an attractive market for real estate investors looking to specialize in student housing or short-term rentals.
Dover is the capital city of Delaware, with a population of over 38,000 people. The city’s economy is diverse, with healthcare, government, and education playing leading roles. Real estate investors can find affordable investment opportunities in Dover, with the median sales price for a single-family home in March 2023 of $271,000 according to Redfin. This represents a strong 16.6% year-over-year growth! Investors have seen steady returns, with appreciation greater than 53% since December 2019. With a population with strong incomes and affordable housing, Dover is an attractive market for long-term rental properties.
In addition to long-term rental properties, Dover is a prime market for short-term rental investors. The city has many cultural attractions, including the Biggs Museum of American Art and the Air Mobility Command Museum. These destinations attract a significant number of visitors throughout the year, making it an attractive location for investors in short-term rentals. Additionally, Dover is home to several events that draw large crowds, including the Firefly Music Festival and the Delaware State Fair. These events provide a steady demand for short-term rental properties for visitors.
Overall, Dover’s diverse economy and growing population make it an attractive market for real estate investors looking to invest in both long-term and short-term rental properties.
Middletown is a fast-growing city in the northeast corner of the state. It is considered the fastest growing area in Delaware. Between 2000 and 2010, the population of the town grew by a stunning 206.3%! The city features a vibrant downtown area with a variety of shops, restaurants, and cultural attractions, including the Middletown Town Center and the Middletown Historical Society Museum. Real estate investors can benefit from both long-term and short-term rental demand in Middletown. Events such as the Olde Tyme Peach Festival and the Apple Festival draw in visitors throughout the year.
Middletown is also home to the M.O.T. Big Ball Marathon, an annual event held on Labor Day that supports local charities. Participants of all ages play baseball with an oversized softball on registered teams, earning the name “Big Ball”. The marathon runs nonstop for 24 hours, providing plenty of time for people to participate and raise funds. In 2013, the event achieved its most successful year yet, raising a record $65,000.
Middletown’s location near Wilmington, Philadelphia and Baltimore makes it a desirable destination for those looking to commute to either city. With the growth of the surrounding areas, Middletown is poised for continued development.
Overall, Middletown’s diverse attractions and well-placed location make it an attractive market for real estate investors. With its growing population and promising future, 2023 could be a great time to invest in the Middletown real estate.
Rehoboth Beach is a charming beach town in Delaware known for its sandy beaches, amusement parks, and boardwalk. Its downtown area is vibrant and features a range of shops, restaurants, and cultural attractions. These include the Rehoboth Beach Museum and Funland amusement park. Rehoboth Beach is a popular destination for well-off visitors from nearby cities such as Baltimore, Washington DC, and Philadelphia. The unique blend of beaches, boardwalks, and entertainment options make Rehoboth Beach an attractive location for short-term rental investors.
It is also known for its tremendous water quality and affluent visitors.
According to AirDNA, Rehoboth Beach is a market with potential and pitfalls for investment properties. Pros include a solid regulatory regime friendly to vacation rental operators. Additionally, STR investors can earn significant revenues during the summer season, with average earnings exceeding $9,219 in August per AirDNA. An estimated average daily rate of $433 shows its niche for vacation rentals serving well-off visitors. However, Rehoboth Beach is also flagged as a highly seasonal market with low occupancies during the winter months. As such, vacation rental owners should have a strategy in place to handle the offseason before making a purchase.
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Ready to invest in real estate in Delaware? Easy Street Capital is top lender for investment property loans in Delaware, both hard money rehabs and long-term rental properties.
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