Vacation Rentals in the Poconos
Rental Property Investor · Queens, NY · Member since 2019 · 94 posts · 27 votes
Does anyone own vacation rentals in the Poconos, if so how is that going, would you recommend investing there?
I posted about this the other day in response to someone else’s question:
I've spoken to a few STR investors in the Poconos & here's some things they've warned me about:
1) Super low occupancy rates: you can rent for full weeks in summer but that's your only real guarantee. If you're super close to one of the ski resorts you can also rent for winter weekends (though the ski season has been getting shorter recently). Fall & spring are apparently super tough - very low demand - both weekends & weekdays. 75 annual rental days is considered good in the Poconos and 100 is considered excellent (so 20-25% annual occupancy). Compare that with Gatlinburg, TN & Florida spots that get 80+% occupancy year-round
2) Apparently there's a shortage of good cleaners in the Poconos. I've had numerous Poconos Airbnb owners tell me this shortage of quality labor is causing real problems.
3) Expenses can run high, which is a real problem with only 20-25% annual occupancy rates to produce income. Very high power bills, increasing property taxes, costly HOA fees, snow removal costs, hotel tax, septic & well maintenance costs, etc, etc
4) Perhaps most damning is this: I've talked to quite a few Poconos investors who are looking to sell after only 1 or 2 years of operating. To me this is a huge red flag. When I talk to STR investors in Pigeon Forge or across Florida, they're looking to BUY more STRs not to sell what they own! It worries me that so many Poconos STR owners sell so quickly after buying.
Hey Robin (and others on this Pocono Related thread).
My wife and I are brand new to the STR space. We live in NYC and wanted a place that our family could easily escape to but that would also hopefully rent out frequently enough to cover the expenses. We didn't need the house to make a huge profit, just pay for itself.
I’m happy to say that while we’re still learning, our home is performing well.
we bought in March, cleaned and decorated etc and launched our rental program with Evolve in May (5/24/19). We used the house the WHOLE month of August and we’ve still had 84 nights booked.
it was booked every weekend September - November. December only has two rentals and we’re using it for Christmas-New Year’s holiday (which is peak rental $$).
For reference we bought a 4/2 in Big Bass Lake (aesthetically it’s looks like a cabin and we went with a modern, Scandinavian design approach, though the bathrooms and kitchens are still original). We are on 1 acre and a 6 minute walk to the lake/beach. The house is 1600sq ft and we paid $110k for it.
Big Bass Lake is a little further from NYC than I'd prefer and there are more lavish amenity filled communities in the region, but we have been pleasantly surprised with our STR performance.
For those more seasoned with STR’s is this just beginners luck? We’re averaging $220/night.
Hopefully this gives some added perspective to the conversation.
Wow great info Eric.P ive been breaking my head on which route to invest., Ive looked into STR for quite some time and its been challenging with all these str laws changing and low occupancy on slower months, so i decided to look into the buy and hold long term rental. I've had no luck with real estate agents that are knowledgeable with the area. Some agents tell me i should look into the area, and im getting the feeling the agents don't like investors. It seems to me that the poconos is more ideal for STR investment not long term, and if im wrong send some help my way or point me to the right direction please,.. im looking to invest in the poconos long term rentals if anyone can help me with that ill greatly appreciate it thanks in advance
The Poconos are not ideal for STR or LTR
I posted about this the other day in response to someone else’s question:
I've spoken to a few STR investors in the Poconos & here's some things they've warned me about:
1) Super low occupancy rates: you can rent for full weeks in summer but that's your only real guarantee. If you're super close to one of the ski resorts you can also rent for winter weekends (though the ski season has been getting shorter recently). Fall & spring are apparently super tough - very low demand - both weekends & weekdays. 75 annual rental days is considered good in the Poconos and 100 is considered excellent (so 20-25% annual occupancy). Compare that with Gatlinburg, TN & Florida spots that get 80+% occupancy year-round
2) Apparently there's a shortage of good cleaners in the Poconos. I've had numerous Poconos Airbnb owners tell me this shortage of quality labor is causing real problems.
3) Expenses can run high, which is a real problem with only 20-25% annual occupancy rates to produce income. Very high power bills, increasing property taxes, costly HOA fees, snow removal costs, hotel tax, septic & well maintenance costs, etc, etc
4) Perhaps most damning is this: I've talked to quite a few Poconos investors who are looking to sell after only 1 or 2 years of operating. To me this is a huge red flag. When I talk to STR investors in Pigeon Forge or across Florida, they're looking to BUY more STRs not to sell what they own! It worries me that so many Poconos STR owners sell so quickly after buying.
I posted about this the other day in response to someone else’s question:
I've spoken to a few STR investors in the Poconos & here's some things they've warned me about:
1) Super low occupancy rates: you can rent for full weeks in summer but that's your only real guarantee. If you're super close to one of the ski resorts you can also rent for winter weekends (though the ski season has been getting shorter recently). Fall & spring are apparently super tough - very low demand - both weekends & weekdays. 75 annual rental days is considered good in the Poconos and 100 is considered excellent (so 20-25% annual occupancy). Compare that with Gatlinburg, TN & Florida spots that get 80+% occupancy year-round
2) Apparently there's a shortage of good cleaners in the Poconos. I've had numerous Poconos Airbnb owners tell me this shortage of quality labor is causing real problems.
3) Expenses can run high, which is a real problem with only 20-25% annual occupancy rates to produce income. Very high power bills, increasing property taxes, costly HOA fees, snow removal costs, hotel tax, septic & well maintenance costs, etc, etc
4) Perhaps most damning is this: I've talked to quite a few Poconos investors who are looking to sell after only 1 or 2 years of operating. To me this is a huge red flag. When I talk to STR investors in Pigeon Forge or across Florida, they're looking to BUY more STRs not to sell what they own! It worries me that so many Poconos STR owners sell so quickly after buying.
I posted about this the other day in response to someone else’s question:
I've spoken to a few STR investors in the Poconos & here's some things they've warned me about:
1) Super low occupancy rates: you can rent for full weeks in summer but that's your only real guarantee. If you're super close to one of the ski resorts you can also rent for winter weekends (though the ski season has been getting shorter recently). Fall & spring are apparently super tough - very low demand - both weekends & weekdays. 75 annual rental days is considered good in the Poconos and 100 is considered excellent (so 20-25% annual occupancy). Compare that with Gatlinburg, TN & Florida spots that get 80+% occupancy year-round
2) Apparently there's a shortage of good cleaners in the Poconos. I've had numerous Poconos Airbnb owners tell me this shortage of quality labor is causing real problems.
3) Expenses can run high, which is a real problem with only 20-25% annual occupancy rates to produce income. Very high power bills, increasing property taxes, costly HOA fees, snow removal costs, hotel tax, septic & well maintenance costs, etc, etc
4) Perhaps most damning is this: I've talked to quite a few Poconos investors who are looking to sell after only 1 or 2 years of operating. To me this is a huge red flag. When I talk to STR investors in Pigeon Forge or across Florida, they're looking to BUY more STRs not to sell what they own! It worries me that so many Poconos STR owners sell so quickly after buying.
Hey Robin (and others on this Pocono Related thread).
My wife and I are brand new to the STR space. We live in NYC and wanted a place that our family could easily escape to but that would also hopefully rent out frequently enough to cover the expenses. We didn't need the house to make a huge profit, just pay for itself.
I’m happy to say that while we’re still learning, our home is performing well.
we bought in March, cleaned and decorated etc and launched our rental program with Evolve in May (5/24/19). We used the house the WHOLE month of August and we’ve still had 84 nights booked.
it was booked every weekend September - November. December only has two rentals and we’re using it for Christmas-New Year’s holiday (which is peak rental $$).
For reference we bought a 4/2 in Big Bass Lake (aesthetically it’s looks like a cabin and we went with a modern, Scandinavian design approach, though the bathrooms and kitchens are still original). We are on 1 acre and a 6 minute walk to the lake/beach. The house is 1600sq ft and we paid $110k for it.
Big Bass Lake is a little further from NYC than I'd prefer and there are more lavish amenity filled communities in the region, but we have been pleasantly surprised with our STR performance.
For those more seasoned with STR’s is this just beginners luck? We’re averaging $220/night.
Hopefully this gives some added perspective to the conversation.
I mean, Pocono springs might add a little bit of demand, but there’s already a lot of attractions in the area and the area still remains really really depressed and occupancy rates remain very low because there’s such an over-supply of vacation rental houses because they overbuilt the area many years ago.
Also, Poconos springs won’t be ready until 2022 at the earliest, and everything in the Poconos takes longer than you expect plus we might have a recession coming which could slow down development. After all, it took 15 years to build that entertainment complex American Dream in the Meadowlands in New Jersey, because it was slowed down by the recession.
Also, Poconos Manor burnt down recently and that was supposed to be part of the Poconos Springs complex, so that complicates things and slows it down as well.
Personally I prefer investing in the Southern US (way higher year-round occupancy rates & way more money to be made) but if you’re really intent on buying a property in the northeast, remember that the 30 million people in the nyc area tend to vacation more in the catskills, hudson valley, berkshires, adirondacks & green mtns (vermont) more than the poconos. Those areas have far better skiing (WAY taller mtns), far better hiking (WAY taller mtns, better views) & WAY better fall foliage (a New England specialty).
Anyway, here's a great summary of the kind of numbers you can expect down south (including complete pro formas). You simply won't get annual revenue, annual occupancy rates, annual net income, & annual ROI like this in the north:
https://theshorttermshop.com/c...
Hey Robin (and others on this Pocono Related thread).
My wife and I are brand new to the STR space. We live in NYC and wanted a place that our family could easily escape to but that would also hopefully rent out frequently enough to cover the expenses. We didn't need the house to make a huge profit, just pay for itself.
I’m happy to say that while we’re still learning, our home is performing well.
we bought in March, cleaned and decorated etc and launched our rental program with Evolve in May (5/24/19). We used the house the WHOLE month of August and we’ve still had 84 nights booked.
it was booked every weekend September - November. December only has two rentals and we’re using it for Christmas-New Year’s holiday (which is peak rental $$).
For reference we bought a 4/2 in Big Bass Lake (aesthetically it’s looks like a cabin and we went with a modern, Scandinavian design approach, though the bathrooms and kitchens are still original). We are on 1 acre and a 6 minute walk to the lake/beach. The house is 1600sq ft and we paid $110k for it.
Big Bass Lake is a little further from NYC than I'd prefer and there are more lavish amenity filled communities in the region, but we have been pleasantly surprised with our STR performance.
For those more seasoned with STR’s is this just beginners luck? We’re averaging $220/night.
Hopefully this gives some added perspective to the conversation.
Hey Robin (and others on this Pocono Related thread).
My wife and I are brand new to the STR space. We live in NYC and wanted a place that our family could easily escape to but that would also hopefully rent out frequently enough to cover the expenses. We didn't need the house to make a huge profit, just pay for itself.
I’m happy to say that while we’re still learning, our home is performing well.
we bought in March, cleaned and decorated etc and launched our rental program with Evolve in May (5/24/19). We used the house the WHOLE month of August and we’ve still had 84 nights booked.
it was booked every weekend September - November. December only has two rentals and we’re using it for Christmas-New Year’s holiday (which is peak rental $$).
For reference we bought a 4/2 in Big Bass Lake (aesthetically it’s looks like a cabin and we went with a modern, Scandinavian design approach, though the bathrooms and kitchens are still original). We are on 1 acre and a 6 minute walk to the lake/beach. The house is 1600sq ft and we paid $110k for it.
Big Bass Lake is a little further from NYC than I'd prefer and there are more lavish amenity filled communities in the region, but we have been pleasantly surprised with our STR performance.
For those more seasoned with STR’s is this just beginners luck? We’re averaging $220/night.
Hopefully this gives some added perspective to the conversation.
Hey Robin (and others on this Pocono Related thread).
My wife and I are brand new to the STR space. We live in NYC and wanted a place that our family could easily escape to but that would also hopefully rent out frequently enough to cover the expenses. We didn't need the house to make a huge profit, just pay for itself.
I’m happy to say that while we’re still learning, our home is performing well.
we bought in March, cleaned and decorated etc and launched our rental program with Evolve in May (5/24/19). We used the house the WHOLE month of August and we’ve still had 84 nights booked.
it was booked every weekend September - November. December only has two rentals and we’re using it for Christmas-New Year’s holiday (which is peak rental $$).
For reference we bought a 4/2 in Big Bass Lake (aesthetically it’s looks like a cabin and we went with a modern, Scandinavian design approach, though the bathrooms and kitchens are still original). We are on 1 acre and a 6 minute walk to the lake/beach. The house is 1600sq ft and we paid $110k for it.
Big Bass Lake is a little further from NYC than I'd prefer and there are more lavish amenity filled communities in the region, but we have been pleasantly surprised with our STR performance.
For those more seasoned with STR’s is this just beginners luck? We’re averaging $220/night.
Hopefully this gives some added perspective to the conversation.
I mean, Pocono springs might add a little bit of demand, but there’s already a lot of attractions in the area and the area still remains really really depressed and occupancy rates remain very low because there’s such an over-supply of vacation rental houses because they overbuilt the area many years ago.
Also, Poconos springs won’t be ready until 2022 at the earliest, and everything in the Poconos takes longer than you expect plus we might have a recession coming which could slow down development. After all, it took 15 years to build that entertainment complex American Dream in the Meadowlands in New Jersey, because it was slowed down by the recession.
Also, Poconos Manor burnt down recently and that was supposed to be part of the Poconos Springs complex, so that complicates things and slows it down as well.
Personally I prefer investing in the Southern US (way higher year-round occupancy rates & way more money to be made) but if you’re really intent on buying a property in the northeast, remember that the 30 million people in the nyc area tend to vacation more in the catskills, hudson valley, berkshires, adirondacks & green mtns (vermont) more than the poconos. Those areas have far better skiing (WAY taller mtns), far better hiking (WAY taller mtns, better views) & WAY better fall foliage (a New England specialty).
Anyway, here's a great summary of the kind of numbers you can expect down south (including complete pro formas). You simply won't get annual revenue, annual occupancy rates, annual net income, & annual ROI like this in the north:
https://theshorttermshop.com/c...
I mean, Pocono springs might add a little bit of demand, but there’s already a lot of attractions in the area and the area still remains really really depressed and occupancy rates remain very low because there’s such an over-supply of vacation rental houses because they overbuilt the area many years ago.
Also, Poconos springs won’t be ready until 2022 at the earliest, and everything in the Poconos takes longer than you expect plus we might have a recession coming which could slow down development. After all, it took 15 years to build that entertainment complex American Dream in the Meadowlands in New Jersey, because it was slowed down by the recession.
Also, Poconos Manor burnt down recently and that was supposed to be part of the Poconos Springs complex, so that complicates things and slows it down as well.
Personally I prefer investing in the Southern US (way higher year-round occupancy rates & way more money to be made) but if you’re really intent on buying a property in the northeast, remember that the 30 million people in the nyc area tend to vacation more in the catskills, hudson valley, berkshires, adirondacks & green mtns (vermont) more than the poconos. Those areas have far better skiing (WAY taller mtns), far better hiking (WAY taller mtns, better views) & WAY better fall foliage (a New England specialty).
Anyway, here's a great summary of the kind of numbers you can expect down south (including complete pro formas). You simply won't get annual revenue, annual occupancy rates, annual net income, & annual ROI like this in the north:
https://theshorttermshop.com/c...
Yes of course, makes perfect sense. I think one of the huge differences is that when you’re investing down south, such as Tennessee or Florida or Arizona or the Carolinas or some other places down south, you tend to get your house rented on both weekdays and weekends, so many months will get 80 or 90% occupancy rates which is huge.
When you are investing in the north, if you are even able to stay rented, it is often for no longer than just the weekend during most of the year. So you often end up with only 8 days (or so) out of 30 rented in a month, this is less than 30% occupancy rate for much of the year.
Yet your mortgage and expenses such as property taxes and electricity and various other expenses will occur every month whether your house is rented a lot or a little. So my basic preference is since I have to pay the bills every month, I prefer to invest in places where my house will be occupied 80 or 90% of most months, rather than in the north where I would be stuck with less than 30% occupancy during many months. That is all, I am simply a math guy (who likes to make a lot of money)
I mean, Pocono springs might add a little bit of demand, but there’s already a lot of attractions in the area and the area still remains really really depressed and occupancy rates remain very low because there’s such an over-supply of vacation rental houses because they overbuilt the area many years ago.
Also, Poconos springs won’t be ready until 2022 at the earliest, and everything in the Poconos takes longer than you expect plus we might have a recession coming which could slow down development. After all, it took 15 years to build that entertainment complex American Dream in the Meadowlands in New Jersey, because it was slowed down by the recession.
Also, Poconos Manor burnt down recently and that was supposed to be part of the Poconos Springs complex, so that complicates things and slows it down as well.
Personally I prefer investing in the Southern US (way higher year-round occupancy rates & way more money to be made) but if you’re really intent on buying a property in the northeast, remember that the 30 million people in the nyc area tend to vacation more in the catskills, hudson valley, berkshires, adirondacks & green mtns (vermont) more than the poconos. Those areas have far better skiing (WAY taller mtns), far better hiking (WAY taller mtns, better views) & WAY better fall foliage (a New England specialty).
Anyway, here's a great summary of the kind of numbers you can expect down south (including complete pro formas). You simply won't get annual revenue, annual occupancy rates, annual net income, & annual ROI like this in the north:
https://theshorttermshop.com/c...
Yes of course, makes perfect sense. I think one of the huge differences is that when you’re investing down south, such as Tennessee or Florida or Arizona or the Carolinas or some other places down south, you tend to get your house rented on both weekdays and weekends, so many months will get 80 or 90% occupancy rates which is huge.
When you are investing in the north, if you are even able to stay rented, it is often for no longer than just the weekend during most of the year. So you often end up with only 8 days (or so) out of 30 rented in a month, this is less than 30% occupancy rate for much of the year.
Yet your mortgage and expenses such as property taxes and electricity and various other expenses will occur every month whether your house is rented a lot or a little. So my basic preference is since I have to pay the bills every month, I prefer to invest in places where my house will be occupied 80 or 90% of most months, rather than in the north where I would be stuck with less than 30% occupancy during many months. That is all, I am simply a math guy (who likes to make a lot of money)
I posted about this the other day in response to someone else’s question:
I've spoken to a few STR investors in the Poconos & here's some things they've warned me about:
1) Super low occupancy rates: you can rent for full weeks in summer but that's your only real guarantee. If you're super close to one of the ski resorts you can also rent for winter weekends (though the ski season has been getting shorter recently). Fall & spring are apparently super tough - very low demand - both weekends & weekdays. 75 annual rental days is considered good in the Poconos and 100 is considered excellent (so 20-25% annual occupancy). Compare that with Gatlinburg, TN & Florida spots that get 80+% occupancy year-round
2) Apparently there's a shortage of good cleaners in the Poconos. I've had numerous Poconos Airbnb owners tell me this shortage of quality labor is causing real problems.
3) Expenses can run high, which is a real problem with only 20-25% annual occupancy rates to produce income. Very high power bills, increasing property taxes, costly HOA fees, snow removal costs, hotel tax, septic & well maintenance costs, etc, etc
4) Perhaps most damning is this: I've talked to quite a few Poconos investors who are looking to sell after only 1 or 2 years of operating. To me this is a huge red flag. When I talk to STR investors in Pigeon Forge or across Florida, they're looking to BUY more STRs not to sell what they own! It worries me that so many Poconos STR owners sell so quickly after buying.
Eric, can you please provide more details regarding power bills - what's the average / expected monthly cost for a 3 br around 2,000 sq feet? Also, what's the approx. monthly / annual septic maintenance cost? How much is the hotel tax? Snow removal cost? Also, what's average cost of water/Sewer, electric, garbage removal? Looking for average monthly costs, looking for a 3-br around 2,000 sq feet.
I am (was?) close to putting in an offer on a really lovely 3BD modern ranch house in Lake Naomi, by far the nicest lake community in the Poconos with a huge spa-like clubhouse, pristine beaches, indoor and outdoor Olympic pools, tennis, golf, walking trails, etc. The family/kid activities in summer are nonstop. Though it's quiet and well-kept and you feel very much "in the woods" while there, you are 10 minutes from shopping outlets, highways, and the Kalahari Water Park and 20 minutes from three ski resorts and a casino.
Vacation rental histories I've seen indicate I could at least cover the mortgage and expenses (Lake Naomi dues/membership is SKY HIGH—you get what you pay for.) But this thread has me super-scared that I'm making a mistake.
The thing is, this isn't "just" a vacation rental for me. Primarily, it's an easy city escape halfway between Manhattan where I live and northern PA where my whole family lives. So it's for my use first, but I want rental income to break even, and I don't want to lose money when I sell. The Poconos do seem to have tons of houses on the market, and if you look at price histories, the story mostly isn't pretty. Unless you are flipping and greatly improving a property, you're selling for the same price you bought 10 years ago. With a 10K buy-in fee to Lake Naomi and 4K annual membership/dues, it's going to be even harder to break even when I sell.
The Poconos does have a huge development coming in 2020, Pocono Springs (also 10 minutes from this house), with retail, dining, museums, outdoor light shows, but who knows if that will help the market or not. On the other hand, I drive in from NYC all the time and it seems I'm not alone; the highway is full of families with kayaks and bikes and skis strapped to their cars heading to the Poconos. I just saw a rental history sheet for a small cottage in a not-so-great lake community a good 20 minutes from any ski resort: it made 56K in 14 months. That's not bad for a 130K cottage close to nothing! A realtor owns it and it's staged and marketed very, very well.
I guess my question is: if the Poconos makes the most sense to me location wise for a personal getaway/vacation rental, CAN I make it work, perhaps the way the realtor who owns his tiny cottage is making it work? Or is it doomed to fail? The house I'm looking at has tons going for it: bluestone fireplace, updated kitchen and baths, four-season Florida room, wraparound deck, incredible woodwork, two-car garage. But I'm going to have a mortgage, interest, insurance, community dues, membership, maintenance, snow removal, utilities, and cleaning fees, and ... part of me is thinking I should just invest in Maui instead. :) I know I need to do some calculations, and I'm new at this, but I'd love to hear any feedback for someone like me for whom the Poconos make the most sense lifestyle-location-family wise.
Hey, how did this workout for you? We are currently looking to purchase in the Poconos as well. Would like a getaway place for us, but also use for STR.
First, thank you both for not taking this conversation offline, all of this is incredibly invaluable! Robin, I’ve been and still struggling with ALL the same concerns you brought up. I’m currently putting together an offer for a LakeFront Home listed at 450k in PennEstates in East Stroudsburg. It’s 20 min from Camelback, Shawnee, Kalahari, Mt Airy and the Delaware Water Gap. Am I insane for thinking this is an income producing strategy? AirDNA and Mashvisor suggests not only can I cover expenses, but I can bring in 2-5k/month cash flow. Now, this is all depending on occupancy rates and what average daily rates I charge. But, EVERYTHING on this thread is now urging me to steer clear of the Poconos. Based on it being Lakefront, it’s most definitely more attractive and more marketable than not, albeit on a small “non motorized boat” lake. Y’all, I’m sooooo torn here. This would be my first deal and it still requires minor updates to add a bedroom or two to add more heads. My main two concerns are:
the Stroud township changing use to ban STR's whenever they want. And my exit strategy. I feel like a lot of the big income producing STR's are using this hot market to get out while they can, even though they're producing decent cash flow.
lastly, Penn Estates makes owners COMPLETELY responsible for their tenants actions. Tickets, violations, etc. What if some drunk guest has an accident in the lake, or a kid? Extreme examples I know, but still valid concerns.
Any chance y’all could weigh in, I’d be immensely appreciative. Thank y’all and happy 4th!
-James
@James Gibbons The boro of Stroudsburg is definitely one of the strictest townships in terms of STRs. I couldn't find much info on East Stroudsburg though. That said, it looks like the POA has their own rules they enforce and from the sounds of it, there are definitely more friendly townships in the area. Where did you land on this decision?
I actually just recently started up a Fb page documenting my journey on designing and building a Pocono vacation house that I plan to rent out most of the year on airbnb. If you're interested pop over there and search for Hosts of airbnb: Poconos.
@Julie McCoy I'm very interested in the smoky mountain region, how can i manage this property from the east coast without a property manager?
@Vic Zav Hey Vic! How does your current portfolio look like, and what has gotten you interested into the Poconos market so far? I'd love to chat more!
First of all, huge thanks to everyone who chatted in this thread. Y'all are god send and your information/experiences you shared is priceless. One thing I observed was that a lot of conversations happened about 2 years ago, which was Pre-COVID.
So, I wanted to ask 2 things:
1) Has there been a change in the dynamics of Poconos market after COVID? i.e. more STR demand given that people have flexibility to work from anywhere, shortage of inventory, etc.
2) How does the idea of constructing a brand new chalet in the poconos sound given the market conditions (shortage of supplies, labor, increasing house prices, etc.)?
I've had my STR in the Poconos for 3+ years with good success. I did have my ups and downs but that goes for any place you buy a home. I've got my team in place and we are doing great. Please feel free to reach out if you have any questions. :)
First of all, huge thanks to everyone who chatted in this thread. Y'all are god send and your information/experiences you shared is priceless. One thing I observed was that a lot of conversations happened about 2 years ago, which was Pre-COVID.
So, I wanted to ask 2 things:
1) Has there been a change in the dynamics of Poconos market after COVID? i.e. more STR demand given that people have flexibility to work from anywhere, shortage of inventory, etc.
2) How does the idea of constructing a brand new chalet in the poconos sound given the market conditions (shortage of supplies, labor, increasing house prices, etc.)?
I too want to know how the pandemic has affected the market here.
I was thinking of investing in a STR property in the Poconos myself, for both cash flow and a nice getaway spot.
I'm originally from CA, and now live in NYC. Don't know what it takes for maintenance in snowy weather, but I do enjoy getting out to the empty Poconos during the winter just to slow things down.
As someone who's lived in the Poconos both part-time a full-time over the last four years, I'll give a bit of a rundown of things I've experienced in the area.
I'll start with the good news. The good news is you can have a profitable STR there, over 20% return per year is possible.
Now here is the bad news, some things I've experienced personally or had a friend experience.
-Broken labor market, let's take a simple task like getting the lawn mowed. I had a guy who did this for me one year, then the following year he did it at the open of the season, then stopped showing up all while repeatedly apologizing and promising to get it done. Making excuses like a broken mower, back problems etc. So this should be a simple fix- just get a new guy. I had to call about 10 companies repeadly, most never answer/phone was disconnected. Some that answered were completely booked and would not accept clients. Another guy accepted me was going to do it for about double the normal price but then supposedly when he showed up his mower broke. Finally, I got a company to handle it after like 10 failures.
-Meth problems, I had a subcontractor under my GC go ballistic, show up at a job site after he was fired, high on meth, making paranoid allegations at everyone. This is apparently not uncommon in the area I've heard meth is an issue. This is my only experience with it so far.
-Alcohol problems. I had two different subcontractors(under a different GC from above) who ended up in jail for DWI's(two offenses and you do six months). One of them painted half my house then disappeared, I asked my GC and he was in jail for DWI. Mind you both of these sub-contractors did good work and were nice guys, not poorly spoken etc. But unreliable.
-A friend of mine who is a GC out there has been telling me for years he constantly has workers who work for him who just disappear at some point, stop answering their phones etc.
-Now let's talk utility costs- a lot of people from NYC who have natural gas heating don't realize the Poconos is electric only. Electric heat means way more $$$$. How much am I talking? A four-bedroom house during a cold winter can run you $1400 IN ONE MONTH. I had a guy driving around my neighbor in a panic his first winter here, asking people if they had any firewood to sell because his bill was $1400. Personally, I've my bill come in at $800 for one month during a cold winter and that's on a 2bedroom 1400Square foot house and I'm a young guy who likes the cold so it wasn't cranked up to 75 more like 65degrees.
-Next, let's talk regulation. You're supposed to get a permit from the township(Although plenty don't) The real thing to worry about is the HOA. What is the community manager like? Do they permit STR? And even if they do are they going to make a nightmare to get it permitted? How about the neighbors? I had one property I was considering, looked like a great buy. But something didn't sit right it was way too residential community living, people who will definitely call the cops if there's any noise. So I call the HOA and she tells me it's permitted but the neighbors call the police all the time and they just had two people sell their STR after less than a year. I got lucky on that one, dodged a bullet.
-Crime. I haven't had too much issue with crime personally. But I've had a cleaner of mine tell me that a few years ago break-ins were very commonplace. One experience I've had was maybe 1,000 square feet of decking being stolen from my contractor. Now he did leave it in the front yard for a few days(100-foot driveway) but that's still not a great sign. Another house I bought as rehab was severely vandalized(before I bought it).
-Power outages. At least once a year I lose a freezer full of food due to a power outage. In 2018 we had almost a two-week power outage, now that was exceptional but my point is the infrastructure is not like that of a city it's very common for the power to go out. Recently had a storm blow a transformer near a LTR of mine, now I have to replace the oven which was affected by the blowout(fire department showed up when tenant smelled burning wires)
-Septic tank and Well water. Most houses are not on city water/sewage but have a septic tank and well. I've had my septic tank replaced for just under 5k. But I have heard they can run up to 20k in certain situations. Like wise a Well pump replacement may cost you in the 1-3k range. These are costs you don't usually encounter in city living and should be aware of.
-Flooding. It rains A LOT in the Poconos. Especially this past year. Make sure your crawlspace or basement is properly water proofed and has a sup-pump installed. And even then occially you'll get the combination of- Power outage + lot's of rain so your basement/crawlspace will be flooded because the sup-pump is not going to work when the power is out.
-Competition. Everyone and their brother was coming up to the Poconos from NYC/NJ and bidding on houses either for a vacation house or to start a STR during covid. I've seen a lot pop up in my neighborhood alone. Doesn't mean it's not profitable now, just expect more competition over the next year as everyone finishes their STR renovations and launches their "easy way to make some side income". On the brightside maybe some of those same people will launch reliable cleaning/snow clearing services as they realize there is large demand for that.
Thats all I can think of for now. I might make this it's own post since I think it might be useful for people interested in the area.
To end on a positive note, if you already have a great team in place or are buying a great house in a good location the Poconos is a beautiful place and can make a really great STR!
As someone who's lived in the Poconos both part-time a full-time over the last four years, I'll give a bit of a rundown of things I've experienced in the area.
I'll start with the good news. The good news is you can have a profitable STR there, over 20% return per year is possible.
Now here is the bad news, some things I've experienced personally or had a friend experience.
-Broken labor market, let's take a simple task like getting the lawn mowed. I had a guy who did this for me one year, then the following year he did it at the open of the season, then stopped showing up all while repeatedly apologizing and promising to get it done. Making excuses like a broken mower, back problems etc. So this should be a simple fix- just get a new guy. I had to call about 10 companies repeadly, most never answer/phone was disconnected. Some that answered were completely booked and would not accept clients. Another guy accepted me was going to do it for about double the normal price but then supposedly when he showed up his mower broke. Finally, I got a company to handle it after like 10 failures.
-Meth problems, I had a subcontractor under my GC go ballistic, show up at a job site after he was fired, high on meth, making paranoid allegations at everyone. This is apparently not uncommon in the area I've heard meth is an issue. This is my only experience with it so far.
-Alcohol problems. I had two different subcontractors(under a different GC from above) who ended up in jail for DWI's(two offenses and you do six months). One of them painted half my house then disappeared, I asked my GC and he was in jail for DWI. Mind you both of these sub-contractors did good work and were nice guys, not poorly spoken etc. But unreliable.
-A friend of mine who is a GC out there has been telling me for years he constantly has workers who work for him who just disappear at some point, stop answering their phones etc.
-Now let's talk utility costs- a lot of people from NYC who have natural gas heating don't realize the Poconos is electric only. Electric heat means way more $$$$. How much am I talking? A four-bedroom house during a cold winter can run you $1400 IN ONE MONTH. I had a guy driving around my neighbor in a panic his first winter here, asking people if they had any firewood to sell because his bill was $1400. Personally, I've my bill come in at $800 for one month during a cold winter and that's on a 2bedroom 1400Square foot house and I'm a young guy who likes the cold so it wasn't cranked up to 75 more like 65degrees.
-Next, let's talk regulation. You're supposed to get a permit from the township(Although plenty don't) The real thing to worry about is the HOA. What is the community manager like? Do they permit STR? And even if they do are they going to make a nightmare to get it permitted? How about the neighbors? I had one property I was considering, looked like a great buy. But something didn't sit right it was way too residential community living, people who will definitely call the cops if there's any noise. So I call the HOA and she tells me it's permitted but the neighbors call the police all the time and they just had two people sell their STR after less than a year. I got lucky on that one, dodged a bullet.
-Crime. I haven't had too much issue with crime personally. But I've had a cleaner of mine tell me that a few years ago break-ins were very commonplace. One experience I've had was maybe 1,000 square feet of decking being stolen from my contractor. Now he did leave it in the front yard for a few days(100-foot driveway) but that's still not a great sign. Another house I bought as rehab was severely vandalized(before I bought it).
-Power outages. At least once a year I lose a freezer full of food due to a power outage. In 2018 we had almost a two-week power outage, now that was exceptional but my point is the infrastructure is not like that of a city it's very common for the power to go out. Recently had a storm blow a transformer near a LTR of mine, now I have to replace the oven which was affected by the blowout(fire department showed up when tenant smelled burning wires)
-Septic tank and Well water. Most houses are not on city water/sewage but have a septic tank and well. I've had my septic tank replaced for just under 5k. But I have heard they can run up to 20k in certain situations. Like wise a Well pump replacement may cost you in the 1-3k range. These are costs you don't usually encounter in city living and should be aware of.
-Flooding. It rains A LOT in the Poconos. Especially this past year. Make sure your crawlspace or basement is properly water proofed and has a sup-pump installed. And even then occially you'll get the combination of- Power outage + lot's of rain so your basement/crawlspace will be flooded because the sup-pump is not going to work when the power is out.
-Competition. Everyone and their brother was coming up to the Poconos from NYC/NJ and bidding on houses either for a vacation house or to start a STR during covid. I've seen a lot pop up in my neighborhood alone. Doesn't mean it's not profitable now, just expect more competition over the next year as everyone finishes their STR renovations and launches their "easy way to make some side income". On the brightside maybe some of those same people will launch reliable cleaning/snow clearing services as they realize there is large demand for that.
Thats all I can think of for now. I might make this it's own post since I think it might be useful for people interested in the area.
To end on a positive note, if you already have a great team in place or are buying a great house in a good location the Poconos is a beautiful place and can make a really great STR!
Yep! You pretty much nailed all the headaches that my friends who own in the Poconos deal with. Brutal, just absolutely brutal. It truly is Appalachia in every sense of the word. The entire region is filled with unaccountable high school dropout meth head opioid addicted people. It’s truly sad. But also a GIANT HEADACHE for my friends who own there!!