Investor · Cherry Hill, NJ · Member since 2016 · 860 posts · 324 votes
Hey all,
So I'm tossing around the idea of buying a STR with the intention of my family getting use out of it.
Currently I live in South Jersey and my family travels to Florida a few times a year, In the summer we spend a lot of weekends in Ventnor, NJ and we love the Poconos. I have family in both Ventnor and South Florida which is where we stay when visiting.
I love the idea of being able to purchase a property in these areas with the intention of getting all my costs covered by STRs and being able to use them for my family.
I would love any feedback on this especially for this who have STRs in some of these areas.
Specialist · Atlantic City, NJ · Member since 2013 · 431 posts · 170 votes
7y
Hi @Mayer M. I have duplex STR in Ventnor and a 10+ unit under contract. The returns have been beyond expectations but its a high end unit.
We are converting our Atlantic City properties to STR as well.
Moms got spots in SW Florida and she likes being down there for the winter. I think you play to what you like. Maybe check out the STR University guys videos. It's great content
So I'm tossing around the idea of buying a STR with the intention of my family getting use out of it.
Currently I live in South Jersey and my family travels to Florida a few times a year, In the summer we spend a lot of weekends in Ventnor, NJ and we love the Poconos. I have family in both Ventnor and South Florida which is where we stay when visiting.
I love the idea of being able to purchase a property in these areas with the intention of getting all my costs covered by STRs and being able to use them for my family.
I would love any feedback on this especially for this who have STRs in some of these areas.
Thanks!
To really maximize your STR profits, you need solid year-round demand. Most people only go to Ventnor & the Poconos at certain times of the year. People go to S FL allllll year round! Just be sure to focus on Broward not Dade bc restrictions are super strict in Dade last I checked
The Poconos market is one of the worst in the country when it comes to appreciation. The rental market there is very much seasonal for STRs. One of the worst financial decisions my family made was buying a vacation home there. They've held because it was never a financial decision in the first place, but if the financial decision is a large part of your decision, the Poconos is not the place to go. Also, at least one of the counties there is going through a county-wide tax reassessment currently, which is going to greatly change some of the tax bills, so keep an eye on that if the Poconos is a consideration.
I can't speak to South Florida specifically, but broadly Florida was one of the worst hit markets in the country in the last recession, it might be a consideration to pick up a place down there during the next market bust if you aren't in a hurry. The main caution here would be, you can't get to your rental in short notice, or cheaply, so you'll have to rely on / trust others to manage your asset, this can be hard for many people to do.
The Jersey Shore isn't a bad one, lots of demand, its not a year-round market, but you can make your entire nut renting it out in the peak summer months, then use it for much of the spring/fall, and reserve a couple weeks during the summer as well. I'd caution against, Ventnor/AC/Margate. Those markets have been hit with a lot of supply & declining prices as the properties there get killed by exorbitant taxes. Ocean City would probably be my first choice for a reasonably priced beach house with decent financial metrics. You do have to watch flood insurance rates in all these towns too after Sandy.
From a return perspective, vacation rentals almost never make sense. In my opinion, the best thing to do it keep your investments separate from your vacations. Invest your money into quality cashflowing local properties, then use the proceeds from those to fund vacations. I know that's what my family would have done if we could reverse our decision, but hindsight is 20/20.
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
7y
Not sure about that area. Look on Vrbo and Airbnb and see how full calendars are and what rates they are getting. Since you are trying to have a place for your family that you rent out to cover your costs then this is usually very doable.
Albrightsville, PA · Member since 2018 · 118 posts · 79 votes
7y
@Gregory Hiban If your family bought the Pocono house before the crash (2008) you will not see the appreciation other places have. I have lived in the Poconos the past three years and own 4 properties that I forced appreciation on but have also seen everything around them appreciate. I live in one of the communities that have a lot of STR's and they rent all year round. The rental market is great LTR's as well. Monroe county is going to be reassessed because the rate is double that of the next highest tax rate ( they are looking to reduce the tax rate). IMO the Poconis are a gold mine if you know what to look for. Who goes to Florida in the summer when its 150 degrees with 100% humidity?
Bethlehem, PA · Member since 2017 · 10 posts · 8 votes
7y
I do have a STR in the Lake Harmony area. Our home has appreciated. We've had offers to buy it when it hasn't even been listed. It rents all 4 seasons. When it is not rented, we enjoy it ourselves. The Camelback area also rents all year, but does not have a lake. They are breaking ground in May in the Mt Pocono area for a huge entertainment complex that will include an aquarium, movie theater, 5 acre park, etc. There are festivals year round. We have only experienced great things and a vacation home to use when not rented that is close to our home, but feels so relaxing to go to. My husband and a few neighbors sold their Jersey shore STR and all say how much nicer and better it is in the poconos. You have to buy in the right place...the poconos is a very broad area.
Real Estate Agent · Philadelphia, PA · Member since 2013 · 451 posts · 369 votes
7y
@Shane Ward 3 years means very little when you are talking real estate, thats a blip on the screen. The Poconos place was purchased in late 2010, after the rest of the market had crashed thinking it was a good buy. The Poconos market took another 3 years to bottom out while the rest of the markets were already strongly in rebound mode. We are still probably a good 10-20% under what it was purchased at in 2010, whereas our investments in the Philly area are at or above where they were pre-crash. We've also purchased half a dozen properties in the Philly area the past 3-4 years that have returned 40-50% capital gains with no renovations necessary.
Albrightsville, PA · Member since 2018 · 118 posts · 79 votes
7y
@Gregory H. This thread wasn't about comparing Philly to the Poconos. I know Philly is a hot market. You are saying that the Poconos are a horrible area invest in based on a personal investment. People are making money in the Poconos all be it at a different pace than Philly is.
Real Estate Agent · Philadelphia, PA · Member since 2013 · 451 posts · 369 votes
7y
@Shane Ward The OP is from the Philly area, so a legitimate alternative option to buying an STR in a market they aren't close to / familiar with would be taking those funds to buy an actual investment property, and using the cashflow to fund vacations indefinitely at whatever destination they choose (especially since they already rotate between 3 different vacation markets due to friends & family). The opportunity cost of capital is a very important consideration, especially when a multitude of asset classes are beginning to carry relatively lofty valuations. When a recession does hit, vacation markets tend to get hit the hardest.
Albrightsville, PA · Member since 2018 · 118 posts · 79 votes
7y
@Gregory Hiban I agree with all of what you said there. I just don't agree that the Poconos is one of the worst areas in America when it comes to appreciation. There are better markets than Philly as well.
Rental Property Investor · East Meadow New york · Member since 2014 · 232 posts · 95 votes
7y
I also invest in the Poconos and own 2 vacation rentals, location is key. Both homes are located in amenity filled gated communities, properties are booked all summer long and most winter weekends. Historically March and April are the slower months.
Specialist · Atlantic City, NJ · Member since 2013 · 431 posts · 170 votes
7y
Hi @Mayer M. I have duplex STR in Ventnor and a 10+ unit under contract. The returns have been beyond expectations but its a high end unit.
We are converting our Atlantic City properties to STR as well.
Moms got spots in SW Florida and she likes being down there for the winter. I think you play to what you like. Maybe check out the STR University guys videos. It's great content
Hi @Mayer M. I have duplex STR in Ventnor and a 10+ unit under contract. The returns have been beyond expectations but its a high end unit. (spent $4000+ on soundproofing one unit (ventnorbnb dot com if you wanna look at our listing).
We are converting our Atlantic City properties to STR as well.
Moms got spots in SW Florida and she likes being down there for the winter. I think you play to what you like. Maybe check out the STR University guys videos. It's great content
Yeah, I've looked in Atlantic City. Looks like it can be a bit rough for LTR but GREAT for STR. After all, AC is one of the few spots in Jersey (perhaps the only one??) that has year-round demand
Hoboken, NJ · Member since 2017 · 12 posts · 2 votes
7y
@Mayer M. One thing that I might add to consider is that NJ Governor Murphy has recently proposed a short-term rental tax on Jersey Shore rentals. I assume this is the tax that @Gregory H. eluded to in his earlier post, but figured I would flag in any event.
I also invest in the Poconos and own 2 vacation rentals, location is key. Both homes are located in amenity filled gated communities, properties are booked all summer long and most winter weekends. Historically March and April are the slower months.
@Mayer M. One thing that I might add to consider is that NJ Governor Murphy has recently proposed a short-term rental tax on Jersey Shore rentals. I assume this is the tax that @Gregory H. eluded to in his earlier post, but figured I would flag in any event.
East Stroudsburg, PA · Member since 2016 · 24 posts · 2 votes
7y
Hello everyone looking to purchase my first STR I currently live in the Poconos in the Marshalls creek area and I've been in the market for about 4 months and researching STR for about 2 yrs and I pretty much know how it works and Im ready to get on this wave being that this market is 12 yrs old and has room for me but I do see a lite saturated market in the business it self in certain areas but again I'm trying to get a piece of the pie so my 2 targets are Poconos and Florida im a little hesitant with Poconos because having low occupancy rates during the winter months because theres been a drout with snow or else we would probably be in the 60-75% percentile where we would probably be looking around 200 days out of the yr of rentals which im ok with that now Florida they looking at a higher percentile due to the fact that they pretty much booked all yr round so please any experienced advise in any of these 2 states from a markets point of view im all ears or eyes to be exact thank you very much