Ideal Small Towns in Maryland for Real Estate Investors

Are you a Real Estate Investor looking for your investment in Maryland? If yes, you have made the perfect decision. Let’s take a look at why.

Maryland is an economically stable state, situated in the mid-atlantic region, close to Washington. D.C, Baltimore, Philadelphia and New York which serve the largest job markets in the USA, therefore a gateway for the jobholders to live close to nature and job. The recent report by the National Center for Smart Growth identifies that the state will build 178,000 new households by 2030 to complement its housing deficit. As the state built fewer than 15,000 housing units annually since 2008 which unmatched its annual population growth of 40,000. 

Here are the list of small towns in Maryland where the investors have good potential to invest in:

Berlin, Maryland

Berlin, one of the best towns in the USA, is a historic city, situated in Maryland. Its diversifying economy; tourism features; enriched critical infrastructures, such as, Atlantic General Hospital, Worcester County Public Schools, and several local businesses; proximity to Assateague Island and Ocean City; have shaped its robust rental market. However, the town has a 4.9% deficit of housing, which seeks mammoth housing demand, especially the waterfront houses, often sold at premium rate, and receives recurrent referrals from the tourists who rent it for vacations. The recent low property tax rate of 0.68%, free of capital tax after 10 years of holding the properties, has added brownie points for real estate investment.

  • Median Household Income: $47,475
  • Median Rent: $2,375.3
  • Median home value: $120,500
  • Total available listings for sale: 19

Ocean City, Maryland 

Ocean City, Maryland, the 24th richest city in the USA, is a high demand, high-reward place for the real estate investors, especially for its high tourist demand, mostly flock around the summer. The market analysis estimates that Ocean City has a 54% Airbnb occupancy rate on average, which provides $2,624 Airbnb rental income per month.

However, there are challenges, Airbnb rental demand is higher from May to September, average rate approximately $246/day, in winter, it encounters a downfall of $112/ day. Therefore strategies must be adjusted with lesser rent during the winter period. 

  • Median Household Income: $62,401
  • Median Rent: $1,151
  • Median home value: $449,391
  • Total available listings for sale: 19,312

West Ocean City

West Ocean City, located on the bay side of Ocean City, offers different amusement and entertainment options. The tourists consider this place over the West Ocean City because of its smaller population and, therefore less traffic. West Ocean City has a strong investment market, its home value increased 10.9% from last year. Homes in West Ocean City sell faster and earn more money than the national average, with a median days on market of 35 and a sale-to-list ratio of 99.1%. West Ocean City also has a low foreclosure rate of 0.2%, compared to the national average of 1.2%.

  • Median Household Income: $84,107
  • Median Rent: $1,995
  • Median home value: $333,400
  • Total available listings for sale: 297

Bethany Beach

Bethany Beach is a coastal town in Maryland that attracts many tourists and vacationers, especially in the summer months. Bethany Beach properties generate income by renting them out to visitors who are looking for a relaxing and family-friendly getaway. The five-bedroom homes have the maximum revenue potential, approximately $137,000, followed by four-bedroom and three-bedroom homes. Among the properties, ocean-faced or close to ocean properties receive the highest ratings and are always high-on-demand. 

  • Median Household Income: $104,167
  • Median Rent: $2,600
  • Median home value: $567,500
  • Total available listings for sale: 297

Fenwick Island

Fenwick Island is a coastal town in Sussex County, Delaware, USA that offers a variety of real estate opportunities for investors. The convenient location of the island attracts many renters, buyers and vacationers. The demand for housing in Fenwick Island is high, taking approximately 12 to 14 days to sell houses. The supply of housing is limited, as Fenwick Island has a small land area of only 0.5 square miles and strict zoning regulations to preserve its charm and character. This creates a favorable situation for investors who can benefit from high appreciation, rental income, and occupancy rates. 

  • Median Household Income: $118,438
  • Median Rent: $3,000
  • Median home value: $875,000
  • Total available listings for sale: 11

Dewey Beach

Dewey Beach is an incorporated coastal town in eastern Sussex County, Delaware, known for its sandy beaches, lively nightlife, and water sports. It attracts many tourists and vacationers, especially in the summer months. However, the Beach has a limited number of properties available, as it is surrounded by water on three sides and has strict zoning regulations. Dewey Beach properties can generate strong rental income, as many visitors prefer to stay in private homes rather than hotels. The average nightly rate for a vacation rental in Dewey Beach is $467, which is higher than the average hotel rate of $232. 

The home values in Dewey Beach have increased by 8.4% in the past year, and are expected to rise by another 7.5% in the next year. The town also has plans to improve its infrastructure, amenities, and environmental sustainability, which could enhance its appeal and attractiveness.

  • Median Household Income: $102,188
  • Median Rent: $2,500
  • Median home value: $740,400
  • Total available listings for sale: 16

Rehoboth Beach

Rehoboth Beach is a popular coastal town in Delaware. It is known for its beautiful beaches, boardwalk, and restaurants. It has a stable housing market, with prices increasing steadily over the years. According to Long & Foster, the median sale price in Rehoboth Beach was $1,050,000 in March 2023, up 15% from the previous year.

One of the exclusive advantages of this is the low property tax rate, compared to other beach towns in the region. The Beach Life report analyzed that, the property tax rate in Rehoboth Beach is 0.6%, while the property tax rate in Ocean City, Maryland is 1.2%.

  • Median Household Income: $137,783
  • Median Rent: $2,500
  • Median home value: $1.19M
  • Total available listings for sale: 61

Conclusion

Overall, Maryland is a stable and potential market for real estate investment, for its diversifying working groups including federal workers, and contractors, low poverty rate and high median income households. Besides the popular tourist destinations and high property values, its towns, such as, Berlin, and Rehoboth Beach have higher tax benefits which stand out Maryland for the next big real estate investment.

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