My wife and I were striking out trying to find a place to stay for one night in/near Rehoboth when we came across the Silver Lake Guest House online. This turned out to be the perfect place for our stay!
A few highlights ... Joe and Mark (the hosts) are polite, professional, and welcoming, and both made an obvious effort to make us feel comfortable during our stay. The house itself is large and very well maintained. The rooms are nice (ours was the smallest option with one queen bed), and all have private baths. I believe the other rooms may have larger beds and/or balconies for slightly higher rates.
All guests have use of a common kitchen and living area (includes fridge, coffee maker and other appliances, etc), as well as a beautiful second floor deck that overlooks the lake. Despite a fairly full house, our stay felt very private as we only saw the other guests coming and going and during breakfast ... which, although not a hot breakfast, was delicious! Lots of fresh fruit and pastry options and very good coffee.
We didn't stay long enough to take advantage of the beach, but the house provides towels, coolers, chairs, and other necessities, and the beach is a short walk away.
We did walk to downtown Rehoboth, which is a short 10-15 minute walk through a residential area. It was nice to stay outside of the busy downtown area (and not have to worry about parking!) yet be close enough to easily walk downtown. Joe also told us about a shuttle (the Jolly Trolley) that makes frequent trips to downtown.
Overall, this is a great place to stay if you want to be close enough to the action but want to stay in a nice, quiet area.