Investment in Poconos

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Investment in Poconos

Kazi Tasnim
Member since 2020 · 2 posts · 1 vote

Hey everyone!!!! Hope you guys are doing fine regardless this Pandemic. I am new to this forum and would really appreciate some advice. TIA

I and my husband are planning on buying a house in Pocono. We have recently been in East Stroudsburg to visit Bushkill Falls, which inspired us to buy a home to put up on airbnb. I am looking through areas like Tannersville, Lake Naomi, Lake Harmony, Pocono Lake. But the houses there are a bit expensive than my budget. I found a few houses that I like in East Stroudsburg, Tobyhanna. I have read mixed comment about these areas. Can someone please suggest if its a good idea to buy a house there. Does anyone have experience in those areas and is it profitable? Thanks a lot again.

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Phillip CostaPro Member
Rental Property Investor · Poconos, PA · Member since 2018 · 32 posts · 17 votes
4y

The Poconos is still one of the best STR locations to find high COC returns. We own one and operate others for investors and we've all been able to make great returns. I am part of a network of STR investors all over the world (including the Smokies, Joshua Tree, and Florida) and everyone is having a hard time making the numbers work but the Poconos still hold strong.

You definitely need to be careful with STR regulations but do your research and team up with a great realtor (@Mark Shay is a Rockstar) who understands/keeps up with the local meetings. At the moment, the only way to have success with STRs is to STAND OUT. This means you need to provide guests with an amazing experience and that comes down to many factors such as location, interior design, and perfecting your systems/operations. 

If you are looking for a completely passive investment in STRs then I suggest teaming up with a great operator that has the vision for the property, can execute on that vision (interior design and furnishing the place), and have the systems in place to provide every guest with an amazing experience without missing a beat. 

Send me a message if you have any questions or need suggestions!

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  • Mark Miles
    Rental Property Investor · Philadelphia, PA · Member since 2016 · 543 posts · 715 votes
    6y
    Originally posted by @Kazi Tasnim:

    Hey everyone!!!! Hope you guys are doing fine regardless this Pandemic. I am new to this forum and would really appreciate some advice. TIA

    I and my husband are planning on buying a house in Pocono. We have recently been in East Stroudsburg to visit Bushkill Falls, which inspired us to buy a home to put up on airbnb. I am looking through areas like Tannersville, Lake Naomi, Lake Harmony, Pocono Lake. But the houses there are a bit expensive than my budget. I found a few houses that I like in East Stroudsburg, Tobyhanna. I have read mixed comment about these areas. Can someone please suggest if its a good idea to buy a house there. Does anyone have experience in those areas and is it profitable? Thanks a lot again.

    1) https://www.biggerpockets.com/...

    2) https://www.biggerpockets.com/...

    0Reply
  • Mike S.Pro Member
    Rental Property Investor · Lindenhurst, NY · Member since 2017 · 49 posts · 29 votes
    6y

    If you listen to @Mark Miles he'll tell you it's a terrible area and to invest elsewhere. I've had an Airbnb there for 2 years and it's been good. But, as you said the houses are getting expensive...

    3Reply
  • Scott RankinPro Member
    Investor · Jim Thorpe, PA · Member since 2017 · 32 posts · 32 votes
    6y

    I second @Mike S..  I've had great experiences in the Poconos with two STRs so far, and adding two more this fall.  I can't speak specifically to Tobyhanna or East Stroudsburg from my own experience, although I do have one friend that has a Victorian home in Bangor, PA and she has successfully rented to East Stroudsburg students/families over the years, as well as vacationers.  Bangor isn't really in the Poconos, however, and who knows what the student population is going to be this year given the pandemic.  

    There are definitely some cheaper houses in Tobyhanna but it's worth doing some research on those communities/HOAs because some of them have a bit of a dicier reputation.  Again, I can't speak to it personally not owning a house there.  I'd suggest continuing to visit areas you're interested in and really pounding the pavement, every time we visit a new part of the Poconos we learn more and discover communities nobody told us about.  There are deals to be had, but only if you put in the time and drive for dollars, so you can really identify the local micro-markets.  

    I hope that helps!

    Scott

    1Reply
  • Michael White
    Member since 2019 · 14 posts · 4 votes
    5y

    We bought in Bushkill PA (Saw Creek) in July. Definitely check out the STR laws for the township where you are planning to buy. Many have rapidly-changing ordinances (we closed 7/15 and the ordinance changed 7/23 which made things harder for us but not impossible). We have also had trouble finding good people to help with maintenance. It is difficult to have a phone call returned, much less get someone to show up to look at a roof, hot tub, etc.

    1Reply
  • Gururaj Iyer
    Edison, NJ · Member since 2017 · 115 posts · 34 votes
    5y

    Totally agree , I did hear about the rental laws , very very difficult to get quality labor at a decent price . I operate 2 rentals in poconos - let me know if you need any insights or references for labor 

    1Reply
  • Michael White
    Member since 2019 · 14 posts · 4 votes
    5y

    @Gururaj Iyer I would love to talk. I'm new here and not sure if there is a DM feature but if you have any good handyman connections I would love to talk pls. Happy to reciprocate. The BIGGEST headache has been the hot tub...it is next impossible to find someone to come and maintain. I may keep it locked and use it just for owners

    0Reply
  • Gururaj Iyer
    Edison, NJ · Member since 2017 · 115 posts · 34 votes
    5y

    @Michael White , no worries at all.. hot tub is a huge pain to get it maintained .. most folks don’t respect instructions and it needs dumping out water very frequently . Let me reach out to my cleaning crew and see if they have bandwidth to take more .. poconos is a high traffic area - lots of potential but at the same time high expenses - maintaining a hot tub is just one of the other hassles .. but I would suggest having it accessible to guests as most folks who come in especially during winter consider that as a added bonus .

    0Reply
  • Michael White
    Member since 2019 · 14 posts · 4 votes
    5y

    @Gururaj Iyer much appreciated. I started renting with Evolve and they connected me with Poconos Cleaning Co. They are good but don't help with the hot tub. If I can find someone who can keep it clean I'm 100% up for it. Thank you! 

    0Reply
  • Gururaj Iyer
    Edison, NJ · Member since 2017 · 115 posts · 34 votes
    5y

    @Michael White- great coincidence ! One of my properties is with evolve although the ground staff they hooked me up with earlier weren’t great .. got mine myself and apparently they were also registered wirh evolve .. the second property I listed ( just a month ago) I chose not to go with evolve ..

    0Reply
  • Michael White
    Member since 2019 · 14 posts · 4 votes
    5y

    @Gururaj Iyer yes we had take down the listing (long story). We are re-listing in January and I may re-list without evolve...please let me know if your cleaners have room for one more! 

    1Reply
  • Mark Miles
    Rental Property Investor · Philadelphia, PA · Member since 2016 · 543 posts · 715 votes
    5y
    Originally posted by @Michael White:

    We bought in Bushkill PA (Saw Creek) in July. Definitely check out the STR laws for the township where you are planning to buy. Many have rapidly-changing ordinances (we closed 7/15 and the ordinance changed 7/23 which made things harder for us but not impossible). We have also had trouble finding good people to help with maintenance. It is difficult to have a phone call returned, much less get someone to show up to look at a roof, hot tub, etc.

     Omg, btwn Rapidly changing rental laws & impossible to find good people for cleaning & maintenance & exorbitantly high property taxes & power bills & septic tank repairs...

    This is why every Poconos thread on here turns into a bunch of people complaining! Ya don't see that when people mention other STR areas! Srsly, Poconos wins the award for #1 complained about STR location on BiggerPockets - that's why I avoid investing there even though I live nearby! 😆

    1Reply
  • Michael White
    Member since 2019 · 14 posts · 4 votes
    5y

    @Mark Miles I hear you! We will be one and done in that area unless something significant changes. 

    1Reply
  • Gururaj Iyer
    Edison, NJ · Member since 2017 · 115 posts · 34 votes
    5y

    @Mark Miles- there is absolutely no denying that .. if I may ask - what other locations for STRs are u considering ? Reason I ask is with 2 STRe in poconos- I haven’t been successful in adding another one - rental laws do keep me nervous as well ..good thing is the cashflow I am seeing with the 2 I own so far is super tempting for me personally to endure the hassles but then off course if a better market exist I would definitely want to explore

    0Reply
  • Mark Miles
    Rental Property Investor · Philadelphia, PA · Member since 2016 · 543 posts · 715 votes
    5y
    Originally posted by @Gururaj Iyer:

    @Mark Miles- there is absolutely no denying that .. if I may ask - what other locations for STRs are u considering ? Reason I ask is with 2 STRe in poconos- I haven’t been successful in adding another one - rental laws do keep me nervous as well ..good thing is the cashflow I am seeing with the 2 I own so far is super tempting for me personally to endure the hassles but then off course if a better market exist I would definitely want to explore

    I've had great success investing down south - Smokies & Florida panhandle are very popular markets with strong ROI that dont have the issues that Poconos do. There's other markets down south too...

    0Reply
  • Scott RankinPro Member
    Investor · Jim Thorpe, PA · Member since 2017 · 32 posts · 32 votes
    5y

    @Michael White Hi Mike, thanks for writing in! What happened with the Saw Creek ordinance? I heard through the grapevine that they were going to eliminate STR in that community, is that true? Did you get grandfathered in?

    Also I've had the same experience with hot tubs, most service technicians won't do weekly maintenance on them.  We have our cleaning staff maintain the hot tubs, it just takes some training and having good systems in place so they know how to handle them.

    Sorry to hear you've been having troubles. We've had good experiences so far, but the rapid expansion of the STR market has definitely led to local resources getting stretched thin. That said, the ROI has still been very good for us so we're continuing to invest in the area.

    Scott

    0Reply
  • Michael White
    Member since 2019 · 14 posts · 4 votes
    5y

    @Scott Rankin we have had zero issues with Saw Creek. I haven't heard anything about eliminating STR in the community (yet) but do please let me know if your contact through the grapevine thinks that will happen.

    Our issue was with Lehman Township. We closed 7/15. As of 7/23 they changed township ordinance so that in order to STR, you have to be a "full-time resident" (i.e. live in the property you rent 183+ days per year). It isn't an issue for us yet as we're about 1/2 time in PA 1/2 time in Brooklyn but it's clear they are not rolling out the red carpet for STR's. Anyone with an existing permit is grandfathered in, but we didn't make it in time (we applied for our permit early August). Unfortunately it sounds like the direction a lot of PA is moving. 

    That being said, demand for our place is absolutely astounding (presumably due to others shutting down) so the ROI is great. It's just not replicable.

    0Reply
  • Scott RankinPro Member
    Investor · Jim Thorpe, PA · Member since 2017 · 32 posts · 32 votes
    5y

    Ah OK, thanks for the info. I think my friend thought the new regulations were coming from Saw Creek, not the township. That's a real problem, especially for a community like Saw Creek where so many of the houses are rentals. I'll be curious to know what the long term fallout is from that. Has Saw Creek indicated that they're planning on abiding by the township rules or have they proposed their own ordnances? I've heard differing opinions from local realtors and investors about the ability of an HOA to set their own rules within a township.

    Thanks,

    Scott

    0Reply
  • Michael White
    Member since 2019 · 14 posts · 4 votes
    5y

    @Scott Rankin update: Lehman township changed their ordinance again on 11/23. We are grandfathered in but the new ordinance essentially makes it impossible for a residentially owned property owner to establish a STR unless the property is already grandfathered in. Super discouraging. Their last major ordinance change was only 4 months ago (7/23).

    0Reply
  • Scott RankinPro Member
    Investor · Jim Thorpe, PA · Member since 2017 · 32 posts · 32 votes
    5y

    Thanks for the update Michael. I agree that's very discouraging and somewhat surprising given how many homeowners in that community depend on STR revenue. I guess they're fine with allowing long-time residents to rent but want to discourage investors. It'll be interesting to see what the long-term affect on housing stock/prices is in Saw Creek. Anecdotally already I'm seeing listings linger there longer than in other communities, I wonder if that will keep up.

    1Reply
  • Alesandro Breguez
    Investor · NEPA /NJ · Member since 2019 · 44 posts · 15 votes
    5y

    Hi Guys, 

    Glad to join this discussion! I have few units in Lake Harmony and Emerald Lakes and I admit that during my first year I struggled to find reliable workforce. It took me some time to put a robust team together but I assume this is not only the challenge in the Poconos, this is a general challenge in the hospitality industry.

    I also went throught he STR license process which are now required by some townships.

    Feel free to DM me and connect to exchange about best practices.

    2Reply
  • Jason Chan
    Member since 2019 · 4 posts · 1 vote
    5y

    Just closed on a SFR in Saw Creek.. I can't believe they changed the ordinance AFTER we went into contract. We were planning to STR the property. Does anyone know if this is temporary due to COVID-19? :(

    0Reply
  • Trisha Bechard
    Member since 2021 · 1 post · 2 votes
    5y

    I'm actually banding together with some STRs in our HOA to come up with a proposal. I know that these rentals can get bad with parties, etc. but they just need A) to be regulated and B) expect these rentals to financially contribute to the community. How do they think that biting that hand that feeds you is a long term solution to this problem? These STRs employ cleaners, snow removal people, landscapers, etc. They infuse the economy with money. I want our HOA to charge a fee for STRs that goes directly into the community coffers (that have been in the red for years). We could use this money for snow removal, road pavings, etc. It's a no brainer. In return communities need a liason to deal with STR complaints and issues. There should be expectations that hosts are following best practices (like 8 or less people, no renting to anyone under 25, etc.). Then everyone can benefit from this. If they stop allowing STRs the economy is going to tank. It's a really dumb idea to what could be an ingenious solution.

    2Reply
  • Abhishek Reddy
    Member since 2018 · 8 posts · 2 votes
    5y

    Looking to buy in Bushkill, @Trisha Bechard great idea 💡. Is this market really hot right now? Seems like the good properties are being snapped up.  Where do people see this market going 6mos, 1yr? Seems like sellers are being bold with their asking prices and not negotiating. 6 mos ago $200k would get you a move-in ready 3bed, 2bath house with Garage and deck. Any wisdom on this is much appreciated!

    0Reply
  • Abhishek Reddy
    Member since 2018 · 8 posts · 2 votes
    5y
    0Reply
  • Michael White
    Member since 2019 · 14 posts · 4 votes
    5y

    @Abhishek Reddy if you are buying for a rental just be very careful about STR laws. Lehman Township essentially does not allow new rentals right now. You can only rent if the home you are buying comes with an existing STR permit. That may change but make sure you know what you are getting into.

    1Reply
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