Is Dagsboro, Delaware Good for Airbnb Investment?

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Dagsboro, Delaware Airbnb Investment Overview

Is Airbnb a Good Investment in Dagsboro, Delaware?

Investing in Airbnb properties in Dagsboro, Delaware, presents a promising outlook due to a combination of favorable market conditions and growing tourism trends. Dagsboro, a charming town located near Delaware's popular beaches, benefits from a steady influx of tourists seeking coastal getaways and a quieter alternative to more bustling resort towns. Current market conditions indicate a robust demand for short-term rentals, especially during peak seasons, driven by families and vacationers. Property values in Dagsboro have shown a consistent upward trend, making real estate an attractive asset for appreciation. The investment potential is further bolstered by the town's ongoing development and appeal as a serene vacation destination, suggesting a healthy return on investment for well-managed Airbnb properties.

How Much Does an Average Airbnb Earn in Dagsboro?

Based on available market data and regional analysis, Airbnb properties in Dagsboro, Delaware typically generate monthly revenues ranging from $800 to $2,500, with seasonal beach properties commanding higher rates during summer months when earnings can reach $3,000 to $4,500 monthly due to proximity to Bethany Beach and other coastal attractions. Properties experience significant seasonal variation, with peak earnings occurring from May through September when occupancy rates average 70-85%, while winter months see occupancy drop to 25-40% with corresponding revenue decreases of 60-70%. Key factors affecting earnings include property size and amenities, with three to four-bedroom homes near water access performing best, distance from beaches and recreational areas, property condition and modern amenities like pools or hot tubs, local event calendars including summer festivals and holiday weekends, and competition from traditional vacation rentals in the broader Sussex County market. Annual gross revenues for well-positioned properties typically range from $15,000 to $35,000, though premium waterfront or luxury properties can exceed $45,000 annually, while properties require ongoing maintenance, cleaning, and management costs that typically consume 30-50% of gross revenues.

Airbnb Return on Investment in Dagsboro

Airbnb investments in Dagsboro, Delaware typically generate ROI between 8-12% annually, with higher-end properties near beaches achieving up to 15% during peak summer months when daily rates can reach $200-300 for well-appointed homes. The payback period for initial investment generally ranges from 7-10 years, depending on property acquisition costs which average around $350,000-450,000 for suitable vacation rental properties in the area. Compared to traditional long-term rentals that yield approximately 6-8% ROI in Dagsboro, short-term rentals outperform by 2-4 percentage points but require significantly more active management and carry higher operational costs including cleaning, maintenance, and marketing expenses that can consume 25-35% of gross rental income. The seasonal nature of Dagsboro's tourism market means properties may experience 60-70% occupancy during summer months but drop to 20-30% in winter, making annual cash flow somewhat volatile compared to the steady monthly income from long-term tenants who typically pay $1,800-2,400 monthly rent for comparable properties.

Average Airbnb Occupancy Rate in Dagsboro

Airbnb occupancy rates in Dagsboro, Delaware average approximately 45-55% annually, with significant seasonal variation due to its proximity to Delaware's beach destinations. Peak season from June through August sees occupancy rates climb to 75-85%, while shoulder seasons (April-May and September-October) maintain moderate rates around 50-60%. Winter months typically drop to 25-35% occupancy as beach tourism declines substantially. Dagsboro's rates generally align with Delaware's coastal average of 50-60% annually but fall slightly below the national Airbnb average of 65-70%, primarily due to the highly seasonal nature of Delaware's tourism market compared to year-round destinations. The town benefits from overflow demand from nearby Bethany Beach and Ocean City, with weekend occupancy rates consistently higher than weekday rates throughout the year, and holiday weekends during summer months often achieving 90-95% occupancy.

Best Neighborhoods for Airbnb in Dagsboro

The best Airbnb investment neighborhoods in Dagsboro, Delaware include the Bayside Resort Community area which offers proximity to golf courses and resort amenities attracting vacationers willing to pay premium rates, the neighborhoods near Fenwick Island State Park providing easy beach access and outdoor recreation opportunities that command higher nightly rates during summer months, the Millville-adjacent areas benefiting from overflow demand from the more expensive coastal markets while offering more affordable property acquisition costs, the communities along Indian River Bay offering waterfront or water-view properties that attract boaters and fishing enthusiasts year-round, the neighborhoods near Bethany Beach within a 10-15 minute drive capitalizing on beach proximity without beach-front pricing for property purchases, and the areas around local golf courses and country clubs that attract golf tourism and corporate retreats seeking quieter alternatives to Ocean City, and finally the historic downtown Dagsboro vicinity which appeals to visitors seeking authentic small-town Delaware experiences while remaining close to major coastal attractions, offering steady occupancy rates due to its central location between multiple beach destinations and reasonable property acquisition costs compared to direct beachfront markets.

Short-term Rental Regulations in Dagsboro

Short-term rental regulations in Dagsboro, Delaware are primarily governed by Sussex County ordinances since the town itself has limited specific STR regulations. Property owners must obtain a business license from Sussex County and register their rental with the Delaware Division of Revenue for tax purposes. Occupancy limits are typically restricted to 2 people per bedroom plus 2 additional guests, with a maximum of 10-12 people depending on the property size and septic capacity. There are no owner-occupancy requirements, allowing for entire home rentals. Zoning restrictions generally permit STRs in residential areas, but properties must comply with parking requirements (typically 2 spaces per rental unit) and cannot be used for events or commercial gatherings. The registration process involves submitting an application to Sussex County with property details, proof of insurance, and septic system compliance documentation. Recent changes as of 2022-2023 include stricter enforcement of noise ordinances, enhanced penalties for violations, and requirements for 24/7 local contact information to be provided to guests and neighbors. Properties must also maintain liability insurance of at least $1 million and comply with Delaware's 8% accommodations tax, which is collected by platforms like Airbnb and VRBO or must be remitted directly by property owners.

Short-term Rental Fees and Taxes in Dagsboro

Short-term rentals in Dagsboro, Delaware are subject to Delaware's state lodging tax of 8% on gross rental receipts, which applies to all accommodations rented for less than 30 consecutive days. Sussex County, where Dagsboro is located, imposes an additional 3% accommodation tax, bringing the total lodging tax rate to 11%. Property owners must register their short-term rental with the Delaware Division of Revenue and obtain a business license, which typically costs around $75-100 annually. Sussex County requires a short-term rental permit that costs approximately $200-300 per year, and properties must pass safety inspections that may cost $150-250. The Town of Dagsboro may require a local business license costing around $50-75 annually. Property owners are also responsible for collecting and remitting the 8% Delaware state sales tax on rental income, and must file monthly returns with the state. Additional costs may include fire safety inspections ($100-150), septic system inspections for properties not connected to public sewer ($200-300), and potential homeowners association fees if applicable, which can range from $200-500 annually depending on the community.

Is Airbnb a Good Investment in Dagsboro, Delaware?

Investing in Airbnb properties in Dagsboro, Delaware, presents a promising outlook due to a combination of favorable market conditions and growing tourism trends. Dagsboro, a charming town located near Delaware's popular beaches, benefits from a steady influx of tourists seeking coastal getaways and a quieter alternative to more bustling resort towns. Current market conditions indicate a robust demand for short-term rentals, especially during peak seasons, driven by families and vacationers. Property values in Dagsboro have shown a consistent upward trend, making real estate an attractive asset for appreciation. The investment potential is further bolstered by the town's ongoing development and appeal as a serene vacation destination, suggesting a healthy return on investment for well-managed Airbnb properties.

How Much Does an Average Airbnb Earn in Dagsboro?

Based on available market data and regional analysis, Airbnb properties in Dagsboro, Delaware typically generate monthly revenues ranging from $800 to $2,500, with seasonal beach properties commanding higher rates during summer months when earnings can reach $3,000 to $4,500 monthly due to proximity to Bethany Beach and other coastal attractions. Properties experience significant seasonal variation, with peak earnings occurring from May through September when occupancy rates average 70-85%, while winter months see occupancy drop to 25-40% with corresponding revenue decreases of 60-70%. Key factors affecting earnings include property size and amenities, with three to four-bedroom homes near water access performing best, distance from beaches and recreational areas, property condition and modern amenities like pools or hot tubs, local event calendars including summer festivals and holiday weekends, and competition from traditional vacation rentals in the broader Sussex County market. Annual gross revenues for well-positioned properties typically range from $15,000 to $35,000, though premium waterfront or luxury properties can exceed $45,000 annually, while properties require ongoing maintenance, cleaning, and management costs that typically consume 30-50% of gross revenues.

Airbnb Return on Investment in Dagsboro

Airbnb investments in Dagsboro, Delaware typically generate ROI between 8-12% annually, with higher-end properties near beaches achieving up to 15% during peak summer months when daily rates can reach $200-300 for well-appointed homes. The payback period for initial investment generally ranges from 7-10 years, depending on property acquisition costs which average around $350,000-450,000 for suitable vacation rental properties in the area. Compared to traditional long-term rentals that yield approximately 6-8% ROI in Dagsboro, short-term rentals outperform by 2-4 percentage points but require significantly more active management and carry higher operational costs including cleaning, maintenance, and marketing expenses that can consume 25-35% of gross rental income. The seasonal nature of Dagsboro's tourism market means properties may experience 60-70% occupancy during summer months but drop to 20-30% in winter, making annual cash flow somewhat volatile compared to the steady monthly income from long-term tenants who typically pay $1,800-2,400 monthly rent for comparable properties.

Average Airbnb Occupancy Rate in Dagsboro

Airbnb occupancy rates in Dagsboro, Delaware average approximately 45-55% annually, with significant seasonal variation due to its proximity to Delaware's beach destinations. Peak season from June through August sees occupancy rates climb to 75-85%, while shoulder seasons (April-May and September-October) maintain moderate rates around 50-60%. Winter months typically drop to 25-35% occupancy as beach tourism declines substantially. Dagsboro's rates generally align with Delaware's coastal average of 50-60% annually but fall slightly below the national Airbnb average of 65-70%, primarily due to the highly seasonal nature of Delaware's tourism market compared to year-round destinations. The town benefits from overflow demand from nearby Bethany Beach and Ocean City, with weekend occupancy rates consistently higher than weekday rates throughout the year, and holiday weekends during summer months often achieving 90-95% occupancy.

Best Neighborhoods for Airbnb in Dagsboro

The best Airbnb investment neighborhoods in Dagsboro, Delaware include the Bayside Resort Community area which offers proximity to golf courses and resort amenities attracting vacationers willing to pay premium rates, the neighborhoods near Fenwick Island State Park providing easy beach access and outdoor recreation opportunities that command higher nightly rates during summer months, the Millville-adjacent areas benefiting from overflow demand from the more expensive coastal markets while offering more affordable property acquisition costs, the communities along Indian River Bay offering waterfront or water-view properties that attract boaters and fishing enthusiasts year-round, the neighborhoods near Bethany Beach within a 10-15 minute drive capitalizing on beach proximity without beach-front pricing for property purchases, and the areas around local golf courses and country clubs that attract golf tourism and corporate retreats seeking quieter alternatives to Ocean City, and finally the historic downtown Dagsboro vicinity which appeals to visitors seeking authentic small-town Delaware experiences while remaining close to major coastal attractions, offering steady occupancy rates due to its central location between multiple beach destinations and reasonable property acquisition costs compared to direct beachfront markets.

Short-term Rental Regulations in Dagsboro

Short-term rental regulations in Dagsboro, Delaware are primarily governed by Sussex County ordinances since the town itself has limited specific STR regulations. Property owners must obtain a business license from Sussex County and register their rental with the Delaware Division of Revenue for tax purposes. Occupancy limits are typically restricted to 2 people per bedroom plus 2 additional guests, with a maximum of 10-12 people depending on the property size and septic capacity. There are no owner-occupancy requirements, allowing for entire home rentals. Zoning restrictions generally permit STRs in residential areas, but properties must comply with parking requirements (typically 2 spaces per rental unit) and cannot be used for events or commercial gatherings. The registration process involves submitting an application to Sussex County with property details, proof of insurance, and septic system compliance documentation. Recent changes as of 2022-2023 include stricter enforcement of noise ordinances, enhanced penalties for violations, and requirements for 24/7 local contact information to be provided to guests and neighbors. Properties must also maintain liability insurance of at least $1 million and comply with Delaware's 8% accommodations tax, which is collected by platforms like Airbnb and VRBO or must be remitted directly by property owners.

Short-term Rental Fees and Taxes in Dagsboro

Short-term rentals in Dagsboro, Delaware are subject to Delaware's state lodging tax of 8% on gross rental receipts, which applies to all accommodations rented for less than 30 consecutive days. Sussex County, where Dagsboro is located, imposes an additional 3% accommodation tax, bringing the total lodging tax rate to 11%. Property owners must register their short-term rental with the Delaware Division of Revenue and obtain a business license, which typically costs around $75-100 annually. Sussex County requires a short-term rental permit that costs approximately $200-300 per year, and properties must pass safety inspections that may cost $150-250. The Town of Dagsboro may require a local business license costing around $50-75 annually. Property owners are also responsible for collecting and remitting the 8% Delaware state sales tax on rental income, and must file monthly returns with the state. Additional costs may include fire safety inspections ($100-150), septic system inspections for properties not connected to public sewer ($200-300), and potential homeowners association fees if applicable, which can range from $200-500 annually depending on the community.

* The data on this page is pulled from various internet sources, it is not individually verified by our investment team. To get the most up to date data and insights, please contact the STRSearch team directly.

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Everything Smart Investors Ask About STR Wealth Building

How to start an Airbnb in Dagsboro, Delaware?

To start an Airbnb in Dagsboro, Delaware, begin by researching local zoning laws and regulations through Sussex County's planning department, as Dagsboro falls under county jurisdiction and typically requires short-term rental properties to comply with residential zoning restrictions and may need a business license from the state of Delaware. Obtain necessary permits including a Delaware business license (approximately $75), register for state taxes, and check if Sussex County requires additional short-term rental permits or inspections. Find a suitable property by searching real estate listings in Dagsboro's residential areas, considering proximity to beaches (about 15 miles from Bethany Beach) and ensuring the property meets safety requirements including smoke detectors, carbon monoxide detectors, and adequate egress windows. Furnish the space with quality furniture, linens, kitchen essentials, and amenities that appeal to beach-goers and families visiting the Delaware coast, budgeting approximately $5,000-15,000 for a complete setup. List your property on Airbnb and other platforms like VRBO, taking professional photos, writing detailed descriptions highlighting proximity to beaches and local attractions, and setting competitive rates based on seasonal demand (higher rates during summer months May-September). Manage the property by establishing check-in procedures, hiring local cleaning services, maintaining responsive communication with guests, and ensuring compliance with Delaware's 8% accommodations tax collection, while considering property management companies in the Sussex County area if you live far from Dagsboro.

What's the best way to identify good STR properties in Dagsboro, Delaware?

To identify profitable short-term rental properties in Dagsboro, Delaware, focus on locations within 10-15 minutes of Bethany Beach and Fenwick Island State Park, as proximity to beaches and outdoor recreation drives demand in this coastal market. Target 3-4 bedroom single-family homes or townhouses built after 1990 with modern amenities, outdoor spaces, parking for multiple vehicles, and beach-friendly features like outdoor showers and storage for beach equipment. Analyze pricing using AirDNA and Mashvisor to benchmark against similar properties in nearby Bethany Beach and Ocean View, aiming for properties under $400,000 that can generate $150-250 per night during peak summer season (June-August) and $75-125 during shoulder seasons. Research competition by studying listings within a 5-mile radius on Airbnb and VRBO, noting occupancy rates, pricing strategies, and guest reviews to identify market gaps. Utilize tools like Rabbu and AllTheRooms for market analysis, partner with local property management companies like Vacasa or RedAwning for operational insights, and consult with Coldwell Banker or Long & Foster agents familiar with the Dagsboro investment market to identify properties with strong rental potential before they hit the general market.

How to get an Airbnb permit in Dagsboro, Delaware?

To obtain an Airbnb/STR permit in Dagsboro, Delaware, you must first contact the Dagsboro Town Hall at 31707 Vines Creek Road to inquire about their specific short-term rental ordinance requirements, as the town implemented STR regulations around 2021-2022. You'll need to submit a business license application along with required documents including proof of property ownership or lease agreement, certificate of occupancy, general liability insurance policy (minimum $1 million coverage), floor plan showing maximum occupancy, contact information for a local property manager within 30 miles, and a completed STR permit application form. The application fee is estimated at $150-250 annually, with additional business license fees of approximately $50-100. You must also comply with Dagsboro's specific requirements including maximum occupancy limits based on bedrooms and square footage, designated parking spaces (typically 2 per unit), trash collection arrangements, and noise ordinance compliance with quiet hours from 10 PM to 8 AM. The approval process typically takes 30-45 days after submitting a complete application, and you may need to attend a town council meeting for final approval. Additionally, you must register with the Delaware Division of Revenue for tax collection purposes and may need Sussex County approval depending on your property's zoning classification.

Is it legal to operate a short-term rental in Dagsboro, Delaware?

Short-term rentals (STRs) are generally legal in Dagsboro, Delaware, as the town does not have specific municipal ordinances prohibiting them as of 2023. However, operators must comply with Delaware state regulations including obtaining a business license, collecting and remitting state accommodations tax of 8%, and adhering to local zoning requirements that typically allow STRs in residential areas with some restrictions. The town may require STRs to maintain residential character and limit occupancy based on property size, while Sussex County regulations may also apply regarding septic systems and parking requirements. Recent trends in Delaware coastal communities have seen increased scrutiny of STRs due to housing concerns, but Dagsboro has not implemented the stricter regulations seen in larger beach towns like Rehoboth Beach or Bethany Beach. Property owners should verify current zoning compliance and may need special permits for commercial use in residential zones, while ensuring properties meet health and safety standards required for transient accommodations.

What are the best places to invest in Airbnb in Dagsboro, Delaware?

The best areas for Airbnb investment in Dagsboro, Delaware are primarily concentrated around the Bayside Resort Golf Club vicinity and properties near Route 26 corridor leading to Bethany Beach. The Bayside area attracts golf enthusiasts year-round and offers proximity to the resort amenities while maintaining lower property costs than beachfront locations. Properties along the Route 26 corridor benefit from high tourist traffic heading to Bethany Beach and Ocean City, making them ideal for travelers seeking affordable accommodations within 15-20 minutes of major beach destinations. The historic downtown Dagsboro area near Main Street offers charm for visitors interested in small-town Delaware experiences and provides easy access to local restaurants and antique shops. Areas near Holts Landing State Park attract nature enthusiasts, kayakers, and families seeking outdoor recreation along the Indian River Bay. The residential neighborhoods around Dagsboro Elementary School area provide quiet, family-friendly accommodations for extended stays and business travelers working in the growing Sussex County region, while still being close enough to beaches for weekend leisure activities.

Airbnb and lodging taxes in Dagsboro, Delaware

In Dagsboro, Delaware, Airbnb hosts are subject to Delaware's state accommodations tax of 8% on gross rental receipts, which applies to all short-term rentals under 90 days and is collected by the Delaware Division of Revenue. Sussex County imposes an additional 3% accommodations tax, bringing the total lodging tax to 11% for Airbnb properties in Dagsboro. Hosts must register with the Delaware Division of Revenue to obtain a business license and accommodations tax license, then remit taxes monthly by the 20th of the following month using Form 300A. The town of Dagsboro itself does not impose additional occupancy taxes beyond the state and county requirements. Tax collection can be handled directly by hosts or through Airbnb's automated collection service in participating jurisdictions, though hosts remain ultimately responsible for compliance. Exemptions typically apply to rentals exceeding 90 consecutive days, which are considered long-term leases rather than short-term accommodations, and certain rentals to permanent residents may qualify for reduced rates under specific circumstances established by the Delaware Code.

Total cost to purchase, furnish and operate an Airbnb in Dagsboro, Delaware

To start an Airbnb in Dagsboro, Delaware, the total estimated costs would be approximately $385,000-$425,000. Property purchase represents the largest expense at $300,000-$350,000 based on median home prices in the area. Furnishing costs for a complete 2-3 bedroom property would run $15,000-$25,000 including furniture, appliances, linens, and decor. Initial setup costs including professional photography, listing creation, and marketing materials would be around $2,000-$3,000. Permits and fees including business license, short-term rental permit, and inspection fees would total approximately $500-$1,500. Insurance for short-term rental coverage would cost $2,000-$3,000 annually. Utilities including electricity, water, internet, cable, and trash service would average $300-$400 monthly or $1,800-$2,400 for six months. First six months operating costs including cleaning services, supplies, maintenance, property management software, and marketing would range $8,000-$12,000. Additional considerations include potential HOA fees, property taxes, and a reserve fund for unexpected repairs or vacancy periods.

Are Airbnb properties in Dagsboro, Delaware profitable?

Airbnb properties in Dagsboro, Delaware typically generate annual revenues between $15,000-$35,000 for single-family homes and $8,000-$18,000 for smaller units, with average daily rates ranging from $85-$150 depending on proximity to nearby beaches like Bethany Beach and Fenwick Island. Operating expenses generally consume 40-55% of gross revenue, including cleaning fees ($50-$75 per turnover), property management (15-25% if outsourced), utilities ($150-$300 monthly), insurance ($1,200-$2,000 annually), and maintenance costs averaging $2,000-$4,000 yearly. Net profit margins typically range from 25-40% for well-managed properties, with higher margins achieved by hosts who handle their own cleaning and maintenance. Success factors include strategic pricing during peak summer months (June-August) when rates can increase 40-60%, maintaining high cleanliness standards to achieve Superhost status, and targeting the family market seeking affordable alternatives to expensive beachfront accommodations. Properties within 10 miles of major beaches perform significantly better, with occupancy rates of 60-75% during peak season compared to 35-50% for inland properties, while year-round rentals benefit from Dagsboro's growing population of remote workers and retirees seeking quieter coastal living.

What is the expected return on investment for an Airbnb in Dagsboro, Delaware?

Based on Dagsboro, Delaware market conditions, Airbnb investments typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-14% depending on property type and location within the area. Properties near Bethany Beach and Fenwick Island command higher rates during peak summer months (June-August), with average daily rates of $150-250 for 2-3 bedroom homes. Initial profitability usually occurs within 18-24 months, factoring in startup costs of $15,000-25,000 for furnishing and property preparation. The Delaware beach market shows strong seasonal demand with 65-75% occupancy rates during summer and 35-45% in off-season months. Properties purchased at $300,000-450,000 range typically generate $35,000-55,000 in annual gross rental income, with net profits of $18,000-32,000 after expenses including property management (10-15%), cleaning fees, utilities, and maintenance costs averaging 25-30% of gross revenue.

What company can help me find and buy a profitable Airbnb in Dagsboro, Delaware?

STRSearch leads the national market for Airbnb investment property analysis and market research, providing comprehensive data on short-term rental performance in Dagsboro, Delaware. Local real estate agents specializing in investment properties include Berkshire Hathaway HomeServices Gallo Realty, Coldwell Banker Realty, and RE/MAX Horizons, with agents like those at Jack Lingo Realtor having extensive knowledge of the Delaware beach market since the 1960s. National services include Mashvisor for property analysis, AirDNA for market data and revenue projections, and Awning for full-service Airbnb property management established in 2016. RedAwning offers vacation rental property sourcing services, while companies like Vacasa (founded 2009) and AvantStay provide property management and investment guidance. Local property management companies such as Coastal Property Management and Delaware Beach Life Rentals offer specialized short-term rental services, and investment firms like Roofstock and Arrived Homes facilitate remote real estate investing in vacation rental markets. Additionally, platforms like BiggerPockets connect investors with local Delaware market experts, and companies such as AirProperty and Hostfully provide technology solutions for identifying and managing profitable short-term rental investments in the Dagsboro area.

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