Quote from @Thomas Don:
Quote from @Mark Miles:
Quote from @Mark Bills:
Hi @Scott K.
Out of curiosity what about the Poconos market makes it tough?
In 2019 there were 10,000 homes for sale in the Poconos. In 2020 and 2021 during the Covid pandemic, folks from Nyc and Philly bought them all up. And they turned about 5,000 of them into Airbnbs. This has caused at least 3 major problems: 1) the market is now oversaturated with Airbnbs, 2) rental rates have come down bc of so much competition, 3) there's a dire shortage of workers available to service the huge increase in the # of Airbnbs.
Wait times are often a month or longer for service providers. I have a friend who needs an electrician & has been waiting a month. He had to cancel all of his reservations until he can get an electrician. Another friend's hot tub has been out of commission for over a month while he awaits a hot tub repairman. He has had to give refunds bc of a non-working hot tub. Another friend needs to renovate his house but can't get anyone to do it, it's brutal.
Plumbers, roofers, lawncare, there's no one available to do this work bc there's waaayyyy too many Airbnbs for the local labor market to support.
Not to mention the dire shortage of cleaners and handymen. Home prices have shot up in the Poconos, there's very few homes for sale, there's bidding wars on the few homes that are for sale, and there's a drastic shortage of available workers. Not an ideal place to run a business but good luck if you wanna try it!
Personally, as someone who lives near the Poconos, I would recommend the mountains of VA, NC, or TN. Or the beaches of NC, SC, GA, FL, AL, MS, or TX. I’ve built quite a little nest egg investing in some of those markets 👍👍
Would have to agree with him. If you enjoy smashing your head against a brick wall to eventually make a higher return then invest in the Poconos. If you value peace of mind and don't mind lower returns just go somewhere else with a functional labor market, lower property taxes, and utility bills that won't make you sick.
Quick example your heat bill being electric can hit $1,000 in the winter, and your property taxes are probably $500 per month. That's $1500 in expenses in the wintertime months not including a mortgage. There are decent houses renting for only 200-300 a night, many only rent on weekends. I'd imagine a lot of people out there are making no money.
Another personal example is a house across the street from mine that sold for 170k a little over a year ago. The buyers were from NJ. They made it a STR, they didn't put in anything special(no hottub, maybe because hot tubs were six months out when they bought the house). But it was still a nice 4bedroom 3bath, on over an acre, ten minutes to the ski slopes, hiking, ect.They rented most weekends in the summer but beyond that, I didn't notice it rented that much. Now they are trying to sell it, listed two months ago for like 320k, just reduced to 300k. They'll probably get at least 250k for it. But was it a profitable STR? I doubt it, they busted out and now they're trying to flip it.
I'd imagine a lot of people will bust out in the next year or two but it will be not as noticeable because they'll be able to sell at higher prices. The real tough part is when we face a market crash at some point and that house that was bought for 500k can only be sold for 300k. Sounds drastic but prices have tripled out here in a few years. Houses that were 100k in 2017 are 300k+ now. That said if they actually do build the train from NY to here I'd be pretty bullish on the area.
@Thomas Don, every property that I have seen, taxes are between 2500-5000 a year.
I just started looking up that way.
There is a property in Emerald Lakes. The house is currently a STR through airbnb. I was told that in 2021 it generated 75k in income and had 11k in expenses. Expenses below:
PPL, Internet, Lawn, HOA, Home insurance, Taxes (School, County, Township), Wifi cameras.
I'm missing snow removal and the % withheld from the management company, but when I do my math (even after adding additional expenses like vacancy, repairs, management and snow removal) this property (taking for base the 75k generated in 2021) will cash flow $2100 a month.
AM I MISSING SOMETHING????? Looks too good to be true. I was able to find the property on Airbnb and only had one review. Is he fooling me with the numbers???
Regards,
