Vacation Property Purchase during Covid

[Tahera Tilson]

I own a condo in NYC. Since Covid I am interested in a vacation rental nearby at Delaware beaches (2.5hr drive). My original goal was Florida. I am a former resident of FL so I was familiar with it. The beaches of NJ/NY are very expensive.  I have a down payment.  Are there any red flags to this purchase at this time or anyone know any major cons of Delaware beaches?

[Lauren Kormylo]

I grew up in Delaware going to the beaches there, especially Fenwick Island and Ocean City MD, where my grandparents had a cottage.  I love the beaches there.  If you're buying for your own use, or occasionally renting to have it pay for itself, it would be great.  If you're buying expecting to make a good profit on mostly renting it, it may not be so great, because the off season is slow.  I've been looking at Airbnb and VRBO occupancy and prices on places through this past winter, and it's sporadic and low priced for the most part.  You've got to make the bulk of your money in June-July-August-mid Sept, which should be fully booked.  

Taxes are low at the beaches in DE.  Ever since Sandy, more NY, PA, and NJ residents have been vacationing there. 

The only thing I would watch for is that some of the ocean block houses in Rehobeth are leasehold, not fee simple.  They look like they're lower priced, and that's because you only have use of them for the remaining ground lease term.  There's no incentive to remodel them, because you don't really own them.  

Dewey Beach just south of Rehobeth is more of a partying town, and it allows dogs on the beach even during summer in the early morning and late afternoon.  Other beaches don't allow that in the summer.  A few of the bayside streets in Dewey can flood with big storms.  In fact, you should always check out flood zones before you buy.  My sister rented a 4 bedroom condo for her own use in Dewey this past winter, ocean block, for the full off season for $1000/month.  

Rehobeth, Bethany, and Fenwick are more family oriented towns.  Bethany and Fenwick call themselves The Quiet Resorts. Rehobeth and to some extent Dewey probably have more residents and more going on in the off season than the other two.   The beach itself up and down the coast is all great, sandy with no rocks.