Q. How can you make 5% return on your investment?

A. Buy a real estate investment property in Rehoboth DE.

But before we get too far ahead of ourselves it is important to begin by understanding the topography of the 1 square mile that is Rehoboth Beach. We already know there is a demand, the 15-week season will attract an estimated 2 million visitors compared to the 1500 year round residents. But it takes a little more expertise to know what combination of natural and physical features will provide the greatest return on investment. Here are the top three factors to consider:

 

  • Distance from the ocean- The greatest determining factor on your rental income will be how many blocks from the beach your investment property is located. There can be a difference of $1000pw between 1st and 2nd block. Visitors want to be able to walk to the beach and all the attractions of the boardwalk. No hassle to find parking and a short stroll home after dinner at one of the award winning restaurants.
  • Blocks from Rehoboth Avenue – The main strip where all other crossroads and avenues meet. Rehoboth Ave. is the heartbeat of the city with its boutique stores, live music concerts and colorful nightlife. As an investor the closer you can position to Rehoboth Ave. the greater your potential to rent during the quieter periods of the year. Rental properties located two blocks north or south from the avenue are more desirable during the shoulder months (May/June & Sept/Oct) and have a higher appeal to seasonal tenants.
  • Home Features – Weekly renters are not looking for pristine but they are willing to pay top dollar for convenience. The more groups the house can accommodate the more ways the cost can be divided. A property that is able to sleep 12 or more is the ideal scenario.

 

There are other ways to gain a little extra from each rental period. Having a pool can add an additional $1500 during peak weeks. Allowing pets will provide an additional $200pw while private parking spaces with additional on street parking permits will increase the overall appeal. A 5/6 bedroom property within two blocks of the ocean and two blocks north or south of Rehoboth Ave. that includes a pool will return approximately $115K of rental income in a year. While other variations of factors will generate respectable returns, this combination is the “cash cow”.

Of course there are only a limited number of homes to select from which is why working with a local Realtor ® will help you to combine the right variables that will provide you with maximum returns.

 

* Demographic data provided by Rehoboth-Dewey Chamber of Commerce

* Real Estate data is accurate as of time of blog

 

Written by Nitan Soni

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