All Forum Posts by: Scott Rankin

Thanks for this great info Xander!  

I can confirm that Tobyhanna Township has not passed a STR ordnance yet, but the draft they've circulated is based on Coolbaugh's. Based on the last town hall I attended (virtually), they're having problems sorting out how to handle enforcement, which is a common problem for these municipalities.

@Jimmy Gonzalez My best advice is to call the HOA and township directly if you're interested in a house/region. They don't update their websites regularly and realtors often don't have the most current/correct info about the regulations. I promise you'll learn more from a 5 minute phone call than a week of scrolling around online looking for info. Keep in mind that PA has a ton of overlapping jurisdictions, so be sure to contact the HOA (if any), the township and the county to make sure you'll be in compliance with your business plan. The counties don't have zoning jurisdiction but you'll want to make sure you're filing quarterly tax reports with them (in Monroe and Carbon, for example), not only for their compliance but your township/HOA may require it as well.

I hope that helps!

Scott

Hi Andy, it definitely depends on the HOA, Jason is right. Almost all HOAs allow STR, but most have some kinds of restrictions/fees involved. The best thing to do is to call the HOA office directly and ask what their policies are, as they change frequently. You can also buy outside of an HOA, but the Poconos has limited inventory as most of the vacation home inventory was built as part of HOA communities.

I hope that helps!

I've done analyses of LTR rates in a few areas in the Poconos, primarily when I'm doing the underwriting for a purchase or refi.  I haven't found a ton of reliable info however, due to the lack of inventory at the moment, and the fact that the houses I'm looking to analyze (A-Frames, chalets, etc) are not generally the type of houses that are available for long term rental.  It makes a good LTR analysis really tough!  

That said, I do think the shortage of quality LTRs in the Poconos makes it a good market to investigate for that, especially over the next few years as additional resorts come online in the area, and the existing ones rebound post-Covid.  That's just my anecdotal experience, however.  Like I said, I think reliable data is hard to come by in this market for LTR. 

Thanks for the update Michael. I agree that's very discouraging and somewhat surprising given how many homeowners in that community depend on STR revenue. I guess they're fine with allowing long-time residents to rent but want to discourage investors. It'll be interesting to see what the long-term affect on housing stock/prices is in Saw Creek. Anecdotally already I'm seeing listings linger there longer than in other communities, I wonder if that will keep up.

Ah OK, thanks for the info. I think my friend thought the new regulations were coming from Saw Creek, not the township. That's a real problem, especially for a community like Saw Creek where so many of the houses are rentals. I'll be curious to know what the long term fallout is from that. Has Saw Creek indicated that they're planning on abiding by the township rules or have they proposed their own ordnances? I've heard differing opinions from local realtors and investors about the ability of an HOA to set their own rules within a township.

Thanks,

Scott

@Michael White Hi Mike, thanks for writing in! What happened with the Saw Creek ordinance? I heard through the grapevine that they were going to eliminate STR in that community, is that true? Did you get grandfathered in?

Also I've had the same experience with hot tubs, most service technicians won't do weekly maintenance on them.  We have our cleaning staff maintain the hot tubs, it just takes some training and having good systems in place so they know how to handle them.

Sorry to hear you've been having troubles. We've had good experiences so far, but the rapid expansion of the STR market has definitely led to local resources getting stretched thin. That said, the ROI has still been very good for us so we're continuing to invest in the area.

Scott

I'm glad you called!  15 miles seems a little crazy to me, but rules are rules!  Like I said, there's always a solution to these issues if you decide you find a house/community that is worth investing in.  Of course, there are other townships too where perhaps the rules aren't quite as restrictive, but if you like Middle Smithfield I'm sure you can find someone to serve as the local agent.  One thing to keep in mind is that the local agent is only contacted in the event that someone makes a complaint to the township about your rental, so if you screen your guests and use cameras/Noise Aware, you will likely be able to avoid your local agent being contacted.  I've never had an issue at my properties, but we're pretty geared toward family rentals instead of loud parties/college kids, which is when you tend to get complaints from neighbors.  

I don't have any specific intel on Middle Smithfield, I think it's worth a call to the township office to get more info. Also, if you're looking in an HOA like Mountain Top or Winona Lakes you need to make sure to check with their office to make sure you know the rules for that community. Most HOAs have some kind of rental fee/permit process as well.

As far as having a local contact, it's completely up to you and how involved you want to be in the running of the property. If the township/HOA requires someone who is closer than you, I'm sure you can reach some kind of arrangement with your cleaning team or handyman or other local contact as you build your team. In my experience, it's always worth being in total compliance with the local ordnances, and there's always a way to make it work.

Prices are definitely going up fast throughout the entire region, but there are still deals to be found on the MLS if you do the legwork. The places driving the price increase are generally move-in ready, I know lots of investors have found places that need work on the MLS, or found off-market deals by pounding the pavement and working the phones after they've targeted a community/area to invest in. Rental rates have also increased due to high demand, so I believe it remains a worthwhile market. I generally underwrite the properties fairly conservatively with the hope of being pleasantly surprised when they do better, but you should always run your own numbers and determine what your target prices/return are.

I hope that helps!

Scott

Hi James (and Ashish!), I operate two STRs in the Poconos and have two more coming online soon.  I haven't experienced any of the issues Mark mentions, nor have any of my friends who also operate STRs in the Poconos, but that's just our experience.  

As far as occupancy rates, we were around 65% prior to Covid, and over 90% since PA opened up STRs again in June.  Electricity costs are definitely high, but you can mitigate that by being as energy efficient as possible with mini-split systems or better insulation/windows if your budget allows.  Wifi enabled smart thermostats also help by allowing you to turn down the heat after renters leave.  

As far as local ordnances go, it's definitely something to be aware of.  The ordnances are actually passed at a township level, not the county level.  Monroe and Carbon county collect a 3% hotel tax, which Airbnb automatically remits. However, you do need to file quarterly reports with the county letting them know the amount of tax you paid for each property you operate.  Each township has different ordnances, so you need to call the township you're interested in and get more information from them.  Some of them have ordnances in place and others are still debating what the ordnance will look like.  Most of them follow a similar template to the one Coolbaugh passed earlier this year, which you can find at this link-

https://www.ecode360.com/CO230...

As you can see, Coolbaugh requires that the local agent be able to be at the property within 2 hours, not live within 15 miles, which is a much broader requirement.  So it's worth doing the legwork to know the requirements for the property you're actually buying in, and you''ll likely need to do that research yourself as most local realtors haven't kept up with the rapidly changing regulations.  

Some of the townships have banned STR altogether or are discussing doing so, so be sure to do your due diligence prior to buying!

I hope that helps, and good luck with your search!  We've been really happy with our properties and they've cash flowed really well this year for us.

Scott

I have a couple of STRs in Pocono Pines and I have not had any issues with cleaners/contractors not showing up.  I will say that finding good handyman/contractors is hard because the good ones are booked all the time, but it's not impossible.  If you're interested DM me and I can send you links to some local Facebook groups that we're a part of.  

Overall, I've had great experiences so far.  I don't think it's any harder in this region to find good people, you just need to work the phones, ask everyone you meet for recommendations, etc.  A little legwork is always rewarded.