Occupying only 1,982 square miles, Delaware is the second-smallest state by land mass in America. While this state may be little, it should not be forgotten. There are still potential opportunities for foreign national real estate investors!
Delaware has a prime location, situated near major metropolitan areas such as Washington, D.C., Baltimore, and Philadelphia. It’s also seen as a business friendly state to draw in major corporations and offers low taxes to residents relative to other locations. Collectively, these factors could be advantageous to real estate investors looking to invest in some of Delaware's top cities.
As Delaware’s largest city, Wilmington offers a bustling urban environment. Located near Philadelphia and a short train ride to New York City, Wilmington is ideal for those who want to live within driving distance of big cities, without the price tag.
55% of the city’s households are occupied by renters. This market is driven by a steady influx of young professionals, tech workers, and students enrolled in the area’s eight colleges and universities. One campus of the University of Delaware is located here, which has over 23,000 students.
The city is undergoing new developments, with new projects introducing shopping centers, apartments, and entertainment venues. While rent prices have slightly cooled this year, this is a correction following a nearly 24% surge in 2021, which was the second-highest increase nationwide, behind only Florida. This trend signals strong demand for rentals and opportunities for investors.
The charming state capital of Delaware-this city is known for affordability and economic stability due to government jobs. Dover brings in a consistent population looking for rental properties as home to one of the country’s most prominent Air Force bases housing about 11,000 service members, civilians, and families.
The rental market here is ideal for investors who want steady rental demand and lower property prices. Despite a drop in rent prices since last year, the presence of Delaware State University and the presence of military families in Dover guarantee steady rental demand. So, if you’re looking to start small and build up a portfolio, explore Dover.
Not to be confused with Newark, New Jersey, this college town is home to the University of Delaware. It’s known for a thriving population of students, bringing a constant demand for rental properties serving this demographic. Over the past year, Newark's rental rates remained steady at $2,100 per month.
The city of Newark is currently undergoing revitalization efforts to keep students here after graduation and expand its population. They plan to introduce more businesses, build a new library, create a shopping district, and more to the area. For investors betting on population growth or interested in providing student housing, Newark’s got you covered.
If you’re looking for a vacation rental hotspot, Rehoboth Beach is Delaware’s answer.
Rehoboth is all about sandy beaches, boardwalks, and lots of family fun. Known for its beautiful coastline, Rehoboth attracts tourists year-round but especially in summer. The long-term rental income potential has decreased here. However, it skyrockets with short-term vacation rentals, which fetch an average of $374 per night and $78,000 annually (at full occupancy). This is a popular choice for investors who don’t mind a little seasonality in exchange for potentially higher yields.
One of Delaware's fastest-growing areas, Middletown is widely regarded as one of the state's most vibrant and livable communities. It attracts families and professionals drawn to its suburban charm and convenient access to Wilmington and Philadelphia. This rapid growth is mirrored in rising rent prices, which have surged by $200 over the past year.
While it’s more expensive compared to other places on this list, Middletown is still affordable in relation to many U.S. states on the East Coast. Here, property owners get what they pay for– this town has top-performing schools, parks, and a growing job market, making it popular for families looking to rent. Middletown could be an option if you’re an investor interested in stable, long-term rental income with tenants who are likely to stick around.
With low taxes, a strong rental market, and proximity to major cities, Delaware provides various opportunities for international investors. From the sandy shoreline of Rehoboth Beach to the bustling urban vibe of Wilmington and Dover, there are plenty of reasons to consider Delaware in your real estate portfolio!
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All figures are accurate as of November 2024 and may change over time.* Sources for all city-related statistics:
Home price data: Zillow Housing Market
Rental price data: Zillow Rental Market Trends
Property tax data: Smart Asset Property Tax Calculator
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