All Forum Posts by: Alesandro Breguez

It looks like that the STR market in the Poconos is ''normalizing'' now, there was a spike in the demand in 2020 after the STR ban was lifted and this summer was very busy as well. HOWEVER, there was also a surge in the supply of listings (+25% in Q1 2021) that seems to be balancing the market again.

Sept has been a bit slow. What are your views and takeaways?

@Peter Amendola, Evolve does not provide full service property management, they market your property in multiple listings and take a 10% cut - not really an advantage for homeowners since you can do the multiple market listings with other platforms as iGMS.

My experience with Evolve is that they price the property very low, on average 50% of its should-be price. Financially it never made sense to me to list with Evolve..

@Yahav B., its an overall issue for all homeowners to identify reliable labor. My recommendation is 1. Make sure to make a background and reference check prior to starting ; 2. always have a contract in place with your handyman with strong liability language; 3. Test him first prior to assigning to larger projects; 4. triangulate the information with a 2nd local person to check the work that was performed. My experience, every you can find 1 reliable handyman out of 5 attempts..

It will be a bumpy road while going through the regulations. Some townships passed investor friendly regulations but the second layer of ''regulators'' are the HOAs. I know that some are restricting the STRs for minim 2 weeks stay and other HOAs in the area completely banned it. HOAs might pose a higher risk for investors  than the Townships.. 

@William Beck, good summary. I have a small portfolio of STR properties in the Poconos and I can see already the difference in the market dynamics of supply vs. demand. On the supply side, there is a surge of approx. 25% of new listings since Q1 2021 driven by the new investors coming to the area and higher real estate buyer demand (due to liquidity and low rates). On the demand side, summer is busy but not nearly as busy as last summer as many people already took the 2nd dose and would rather take a plane to so somewhere else. Still a good market, but very challenging to operate if you dont have a very strong local team.

Looks like that this post and thread saved you from doing a wrong deal :)

@Kano Wu, building on Scott's comment previously, you need to run a very precise due diligence regarding the SRT regulations, both at Township and HOA level. Couple if years ago is very different from now as they the STR ordinances are just getting started and HOA bylaws can change at any time. Make sure you have this on the top of your checklist prior to doing the deal.

Regarding property management: I confess that I don't know anyone who successfully hired a reliable and affordable property management company. Depending on the level of complexity, you can mange it yourself - there are a lot of tools that can help to automate the guest communication. You need to focus on hiring a decent local team of cleaners and one general handyman for maintenance. Ask for at least 3 referrals to minimize the risks of bad hires...

I agree with @Scott Rankin, you rather plan a base case, worst case and best case scenarios. 

I got similar occupancy rates - average 60-65% occupancy, +80-90% in the summer (peak in Aug) slows down a bit in the Fall and picks up again in the Winter. The slowest months for me are April-May. 

According to AirDNA reports, there is a surge in the number of listings (20-25%) in the last quarter in most popular areas in the Poconos. Make sure you include in the analysis an overall long-term outlook of supply vs. demand as the dynamics of the market might change rapidly.

@Steven Gudiel, I also recommend the Poconos area. The prices went up a little but but great revenue potential. Make sure you have a efficient local team and it should be fine 

@Henry Clark and @Mike Lambert - Good points, comprehensive analysis, and nice theoretical and paper exercise but I would like to share with you my practical experience of living and investing in Latin America and Europe.

Whenever you are investing overseas, you need to consider in your analysis 2 major risks: FX/currency and regulations. These are 2 elements that are new to the risk-reward equation in comparison to domestic investments.

Currency is a MAJOR risk. Rule of thumb, US dollar is still the strongest currency and during any economic crisis, foreign investors will seek investments in USD as hedge to the local Emerging Markets currencies. As example, most Emerging Markets currencies depreciated 25-35% vs USD in 2020. The investor might focus too much on foreign markets with attractive 7-10% cap rate and completely overlook the volatility of the currency.

Regulations: Europe tend to be way more regulated regarding real estate speculative market and stricter tax rules. @Joshua Flowers  might remember that investing in real estate in Berlin in 2010-2012 brought AMAZING returns as of key European capitals was still very underpriced in comparison to peer cities. HOWEVER, there are a lot of different tax rules in short term and long-term capital gains.

REI in foreign countries require a LOT of due diligence, this is not for beginners…