Next steps for analyzing specific properties in the poconos for STR?

Question

So I've found a regional vacation market, the Poconos, that seems like it has properties in my price and potentially sufficient cash-on-cash returns to be worthwhile. It's not the only market I'm looking at right now, but I'm trying to avoid getting caught in analysis paralysis and keep moving forward.

I've been connected with an agent there who is apparently working with a few other STR investors and does good volume relatively to other agents there. Apparently, she hasn't closed any STR deals for buyers yet tho and didn't mention owning anything herself.

Now that I've found a market I'm interested in, what are the best next steps for me?

- Should I just start getting into the nitty gritty analysis using airdna of each property that this agent sends me?

- Should I try to keep looking for a different agent who has more experience with STRs specifically? Do really good STR agents help you do the analysis or only bring you deals that already have good cash on cash returns?

- Should I use tools like airdna and mashvisor to try to surface properties with good cash-on-cash potential according to their algorithms, and then bring those deals to her to compare them to her on-the-ground expertise?

- Something else?

How would you proceed? All suggestions are welcome! (Also any connections you have in the poconos or thoughts on the market there would be very welcome!)

John Underwood · Answer

Don't depend on Airdna to be accurate enough.

Use the enemy method. Google it.

Christopher Price · Answer

Hey Josh!

I have also been looking in that market. I co host for other owners in select markets and the poconos is an amazing area for STRs. You have to be selective now that there are a lot of others in the market but it’s very doable to be successful. I’m from the area originally and grew up going there as a kid. Definitely use John Bianchi method along with airdna, don’t just use one source. John knows his stuff and his company he works for also invests in the area.

I have an amazing realtor you should use. He is very well connected to local market and he also runs a local vacation rental owners group. He owns an STR himself so he knows all the info.

Happy to connect and share insight. if you’d like to connect reach out and we can chat sometime. Best of luck!

Michael Baum · Answer

Hey @Josh Kelly, the Poconos have some regs in certain areas that you need to watch for so make sure it is legal where you are looking.

Here is a link to read about the Enemy Method - https://www.biggerpockets.com/forums/530/topics/818478-deter...

I agree with @John Underwood. Use AirDNA to provide some data points, but take time to look at any and all rentals in the area that are similar to what you are looking at.

How much is the nightly rate? What amenities do they offer? What is their occupancy like?

That will give you a pretty good idea of how your place will perform.

James Carlson · Answer

@Josh Kelly

AirDNA is a decent ballpark. But any well-chosen property -- say, with better views, better finishes or better features (or all three) -- should outperform the projection. Adding self-management, like @John Underwood alluded to with the Enemy Method, will improve your revenues as well.

As an example, this client's STR in the mountains outside Denver, Colorado is estimated by AirDNA to make $104,000. With extra features and self-management, he's making $130,000. He's outperforming projections by 25%.

As to whether you should continue with that agent. That's tough. Does it seem like they understand the market, the short-term rental market specifically? Do you trust their advice so far? I guess if want a realtor who has done this a lot, but everyone starts somewhere, and sometimes people learning a market are more motivated to work hard.

Good luck!

Adam Windham · Answer

Like anything, AirDNA is just a tool and will give you one data point, I wouldn't base your go / no-go decision based on AirDNA. However, if you're looking to use a DSCR loan, and the property does not have any prior short term rental operating history, a DSCR lender is going to need to underwrite the loan using either the AirDNA figures or Rabbu figures, so those projections are important in the context of getting approved for a DSCR loan.

Josh Kelly · Answer

Amazing, let’s connect. I sent you a connection request.

Ryan Osborne · Answer

Enemy method and run lots of analysis on different deals. Underwrite conservatively and find what your specific "buy box" is in the market. Once you know your buy box then it will take all of the emotions out of it. Emotional purchases and investing do not mix well!

Josh Kelly · Answer

Cheers! Thanks for the tip. Looks like John Bianchi's method of analysis is very very similar, which I learned last night. Definitely seems clear that the baseline number that airdna gives you is super unreliable.

Tanner Lewis · Answer

You can connect with many STR team members on the BiggerPockets' "Building Your Team" tab. I also use Chalet, which helps STR investors connect with an STR focused team in new markets.

Next steps for analyzing specific properties in the poconos for STR?

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