It's never too late to join the many investors who have seen success in the real estate market. And what better place to start your journey than Delaware? It is ideally positioned near major cities with some enviable tax advantages.
However, successful property investing depends on having a smart strategy. Here are our top five investment strategies to make the most of your money in Delaware.
1. Consider Your Tax Advantages
In Delaware, you have the advantage of a favorable tax location. This state has no sales tax and some of the lowest property taxes in the U.S. So, make the most of this and get professional advice from a tax specialist to maximize your financial gains.
Delaware also offers DSTs (Delaware Statutory Trusts), which provide tax deferrals for more extensive real estate portfolios. If you have multiple diverse properties in the state, consider looking into this option.
2. Look at the Current Demand in the Property Market
Demand differs depending on where in Delaware you choose to invest. That's why you need to do your research before picking a property. Begin with a look at the areas of Delaware that are most sought after for homeowners, such as:
- Wilmington
- Lewes
- Rehoboth Beach
Look at pricing trends for every area on your shortlist and factors such as how long a property is on the market before selling. The latter is the best way to gauge current demand.
3. Look at Proximity to Cities
Delaware is in a desirable location near Baltimore, Philadelphia, and Washington, D.C. All these major cities make Delaware a good spot for commuters.
If you are investing in rental properties and targeting the professional market, it's worth keeping this in mind. Pick locations that have excellent transport links, including major highway routes. That offers the potential for higher rental rates and the long-term value of your property.
4. Look at Neighborhoods With Lots of Investment
When a neighborhood gets investment, whether via a development fund or from the arrival of a notable employer, it's a good sign that this is an up-and-coming area for real estate investing.
That's a huge advantage for real estate investors because you have the opportunity to make a healthy long-term profit as this neighborhood becomes more sought after. So, look for areas with large-scale developments nearby but relatively low prices.
5. Think About How You'll Finance Your Investment
There are many ways to finance your real estate investment, so consider several, as some might be better in the long run. You could finance using:
- Traditional mortgages
- Real estate investment loans
- Lease options and owner financing
- Crowdfunding
Put together a spreadsheet and note the costs of each option and the pros and cons. Remember to consider your level of experience in the market. More complex financing is better suited to experienced investors.
Making Money from Property Investing in Delaware
Delaware has lots to offer for any real estate investing. Use these five property investing strategies to help fine-tune your plan and maximize your returns.
PMI First State has an exceptional team that knows the ins and outs of real estate investing. We can help you make the most of your money, and you can find out more here.
