All Forum Posts by: Mark Shay

A lot has happened in Tobyhanna Township over the past few years. STR just became regulated and the new ordinance is causing some angst. There were an estimated 800 STRs operating in the township before the ordinance and based on a surge of new properties for sale, some of those operators are getting out. The ordinance limits occupancy to 2 per bedroom, with a maximum of 10 per property. The number of bedrooms for STR has to match the number of bedrooms cited in the septic permit, so you are seeing homes with 7 BR now have a 10 person STR occupancy limit and some homes that had bedrooms added without permits now being restricted. Check the Tobyhanna Township website for the latest details - Also, pay attention to mailing addresses and legal addresses as there is a Tobyhanna, PA zip code that includes neighboring Coolbaugh Township and the Tobyhanna zip code does not completely line up with Tobyhanna Township.

Currently two Tobyhanna Township LTR rentals in Pocono MLS:

1) 1400 square feet, 3BR 2Bath rancher in Emerald Lakes = $2250/month

2) 3500 square feet, 4BR 3Bath home in Pinecrest Lake = $4,250/month 

The area is woefully short of LTR as communities like Pocono Farms, Pocono Country Place, Penn Estates and Stillwater Lakes see more LTR move to become STR. It bucks the trend, but might be worth going for.

If you have vacant land and can provide some form of driveway, consider putting up a campsite and listing it on HipCamp.com Key is to only have one campsite so that the zoning rules don't come down on you. Look for 10 acres or more, happy to help set you up with a MLS search

For anyone who is tracking STR-friendly Pocono communities, Tobyhanna Township, home to more than 800 STR's has just published their STR ordinance.  If you are looking at properties in the area, it is important to understand the difference between mailing address and legal address.  Post offices (zip codes) in the area do not correspond with municipal boundaries, so for every property you are considering, first check to find the township/borough name and then look to their STR zoning restrictions and licensing requirements.

With some acreage, you might instead want to consider developing it as a campsite. We have some acres down by Blue Mountain Ski Resort and set-up a campsite on HipCamp.com Average rental price is $96 on weekend nights, 20% cheaper on weekdays. We book 80-100 nights a year and have a very little tax bill, no utilities, low maintenance and no cleaners! Private campsites (1 per lot) are exempt from most regulations so you don't need a STR license, nor have to wrangle with zoning. You will need a porta-potty, but they cost you only $25/week.

Yes, we have our challenges in the Poconos. We have small, rural townships that were given the ability to regulate the practice in 2019 and no two are doing things the same way. Licenses, occupancy limits, parking restrictions and having a local representative are common requirements and the application process is cumbersome and bureaucratic. We also have mailing addresses that don't coincide with municipal boundaries, so you need to look deep at listings to see the legal address of a property to understand what the rules are.

The vast majority of properties that are renting as STR are located in planned communities with POA/HOA's that have an additional layer of control and operational impact as many require that you register your guests. 

Properties are in short-supply as we not only see investors looking for STR properties, we are seeing an influx of younger families who can work remote and who are looking to these vacation communities as their new primary residence. Communities like the Hideout and Tanglwood Lakes have recently redefined themselves from Vacation Community to Residential Community. As an investor, if you see reference to "residential community" in a HOA website, you should consider looking elsewhere.

Keep an eye on what Tobyhanna Township decides to do about regulation as it is one of the last townships to issue an ordinance.  Some are tightening the rules and giving those who already have a license the ability to continue.  That may limit future supply, another factor in the strong demand, people wanting to get in before it is too late.

This specialty cleaning company has been active in some of the Pocono area STR owner private Facebook groups:

https://strsupercleaners.com/

For the Albrightsville area, people talk positively about Pocono Rental Helpers:

http://poconorentalhelpers.com...

Two property managers:

https://www.poconomountainrent...

www.RoyalPoconoRealty.com

It's a big area so you are most likely to find handypersons and local boots on the ground by visiting the rental office in each community. Bulletin boards have business cards, the POA newsletters have ads from service providers. Help is there, it is just very local.

Yes, we have our challenges in the Poconos.  We have small, rural townships that were given the ability to regulate the practice in 2019 and no two are doing things the same way.  Licenses, occupancy limits, parking restrictions and having a local representative are common requirements, but the application process is no doubt cumbersome and bureaucratic.  We have mailing addresses that don't coincide with municipal boundaries, so you need to look deep at listings to see the legal address of a property to understand what the rules are.  

The vast majority of properties that are renting as STR are located in planned communities with POA/HOA's that have an additional layer of control and operational impact as many require that you register your guests. Properties are in short-supply. Presently my STR Hot List has 83 available, that number would be over 200 in normal times.  There are great contractors here, but they tend not to trust outsiders, so finding a person who you can count on will take some time.  

There's lots to get confused about in the Poconos and a lot of obstacles to doing business here.  That said, there are 47 million people that live within 3 hours drive.  We have lakes, rivers, beaches, mountains, NASCAR, casinos, ski resorts, summer resorts and wedding venues all over the region.  It's not as easy as it used to be, so if you want to win in this market, be ready for some work.

I'm picking this back up as in my area, the Poconos region of northeastern Pennsylvania we are seeing a significant rise in the number of turnkey STR listings from current operators entering their properties for sale.  Business has been very good for them over the past few years (covid has boosted demand for rentals and for vacation home purchases).  Successful STR operator seem to have entered the market with greatly inflated prices with a mindset of “what do I have to lose by selling today?” They can continue to rent while testing the waters to see how high desperate bidders will go. As of February 2022, the answer seems to be buyers will go quite high, but these are not properties that can be financed with vacation home loans with a minimal cash down payment.  As a realtor, we try to highlight the impact the furniture and furnishings will have on the appraisal and try to direct them to commercial loans if they do not have sufficient cash.  Buyers seem to seize onto the term "turnkey" and at first think the furniture is just a bonus, due diligence shows this bonus has a premium cost.  Our MLS systems allow this, if you put the property under investments, nobody seems to find it, so they all end up as residential.  Turnkey STR provides a great opportunity, but you need cash or commercial credit to pull it off.  Read more https://poconovacationhomesale... 

I'm a realtor who specializes in helping folks find vacation homes that they can also rent. Much of what is referred to the as the Poconos was started in the 1970's when families started getting second cars and vacation homes became affordable to the middle class. Developers bought big tracts, created manmade lakes and surrounded them with vacation cottages. These stayed as private communities with Property Owner Associations (POA/HOA) supporting the amenities like beaches, pools, etc. Add a few ski resorts, a casino or two, some indoor water parks and you do get a decent shot at 4-season business.

As some comments identify, owners are not just investors, many rent for only part of the year.  Snowbirds may rent to skiers and return for summer.  Those with season passes or kids on a ski team may rent for the ski season (10-12 weeks) and that data doesn't show in AirDNA and the others.  You've got Pocono Motor Speedway in Long Pond which in the past has had 2 NASCAR stops.  They have other races and an air show, each can bring a surge of rental guests.

Proximity to NY/NJ/CT and Philly are both a blessing and a curse as just about everyone drives to get here, so long weekends bring high room nights, but longer stays require some creative marketing and property management.  Many of the houses are small which makes adding office space for remote work a challenge.  You can offer discounts for weeklong and boost occupancy, or keep rates high and have mid-weeks empty.

A couple of other quick observations - thanks to fracking, we have abundant natural gas in Penna. and may homes have supplemental propane.  It's a cheap way to heat.  A few communities do have central sewer (Penn Estates, Lake Naomi, Lake Harmony, Split Rock, the Hideout, parts of Arrowhead Lake) so if you worry about that, there's hope.  At the same time, getting your system pumped once a year solves a lot of problems and that costs something like $400.  What's your city sewer bill?

Taxes - Pennsylvania breaks property taxes into county, municipal and school.  Depending on the municipality its school district your taxes can be $3,000/year or $8,000/year for a $300K house.  Penn Forest Township is running such a surplus on the state RE transfer tax that they've suspended their municipal RE tax, so if you hate taxes, we have a place for you.  Yes, there is a 2% transfer tax on each RE deal, buyer pays half, seller pays half.

Vacation homes and rentals have been a significant part of the regional economy for 50 years now and it's extremely unlikely that this will shift.  Wise investment in quality homes that are in well-run communities will generate nice income.  You won't get rich quick, but you can do pretty well if you are smart and have trusted local partners.