Pocono STR. Big profits or big problems?

[Thomas Don]

I originally posted this in a different thread, but I figured it would make a good standalone post for anyone thinking of getting involved in the Poconos

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 repeatedly, 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. Likewise 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 waterproofed and has a sup-pump installed. And even then occasionally you'll get the combination of- Power outage + lots 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. That 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 bright side maybe some of those same people will launch reliable cleaning/snow clearing services as they realize there is a large demand for that.


That's all I can think of for now. I'll update this thread if I can think of anything else and welcome any questions!

Feel free to post your own Pocono experiences, both good and bad, to help new people have an idea of what it's going to take.

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!

[Scott K.]

Yeah I own 4 6 bedroom houses up there. I make a killing. But it's also really, really hard to find anyone to do anything. Honestly. Lawn mowing? If you don't know some guys cousins son, then you're screwed. General contractors? Take three times as long as they should because they're doing 3 jobs at once and their workers disappear halfway into the project and they can't find them. Cleaners? They will get into fist fights on your property and quit without any notice. It's like the wild west of manual labor. 

I use a different cleaning crew for every house because there are always issues. I use 4 different Handyman because you never know what will happen. General contractors I have to use a new one for each house because after a year they've burnt out. It's such a weird problem to try and describe to my friends about what my daily issues are. "hardest part of my job is getting people to do what I paid them to".