🛖🦌 Must See Short Term Rental Opportunity of the Week & Hosting Tips | January 5th

Pocono STR News powered by Live Free Hospitality

Network of Experts at Your Fingertips with Pocono STR News

• 🛋 STR Interior Design & Staging - Local company with years of experience and 100+ showstopping designs complete. They handle all design, assembly, and preparation to be photo ready

• 📸 STR Professional Photography & Media - The best media in the game, you absolutely need these guys capturing and editing your listing photos

• 🏘 Property Management: The Local Experts - Local property management soup to nuts. They handle HOA registrations, maintenance, cleaning, communications, pricing, and everything! Ditch the work and increase the revenue with the local expert touch

• 🏛️ Local Pocono STR Lender - The best service and rates for your next vacation home investment. I use these guys on my loans for a reason

• 👨🏻‍💼 Local STR Agent Network - Connect with a local agent who invests in the Poconos and knows the ins and outs of the market. Respond directly to this email with questions on listings here or others

• ⚒️ Local Renovation Contracting - Get access to a reliable and affordable local team of contractors to discuss your next project

• STR Insurance - Find unbeatable rates from the local insurance guy who understands the policy you need to meet township requirements for your rental business

This Week’s Must See STR Opportunity - 166 Nadine Blvd

Overview: One of the biggest questions needing to be answered when entering into the Poconos market for the first time is “Where should I look?” With short term rentals increasingly becoming a topic of discussion for regulatory bodies, it is critical to have an ear to the ground on the climate before barreling into a $200K to $2M investment. Where to look for STR’s is a topic for another day or something to go through with a local real estate professional. Generally, it is nice to know most of the Pocono market has already had its rulings on the township level and HOA level. Meaning, at this point if a township allows STRs or an HOA allows STRs, this decision is likely to stay intact albeit with the possibility of some tweaks to fees or rules. In some cases, some HOAs actually have switched from originally not allowing rentals, to allowing rentals today. Today we’ll go through some interesting changes that happened in Tobyhanna in the past 12 months and the perceived impact on the market.

Where is Tobyhanna Township and Why should I care? Confusing enough, “Tobyhanna” the town that you see come up on Zillow is NOT “Tobyhanna Township”. Tobyhanna Township in part or in whole encompasses Blakeslee, Pocono Lake, Pocono Pines, and Long Pond. These towns and HOAs within them are some of the most profitable, close to attraction rentals that you’ll find.

What Changed: There were two major changes that happened in Tobyhanna Township in 2024. One positive, in that the 2023 implemented regulations limited occupancy to 2 per bedroom with a max of 10 guests, based on your septic and a strict cap regardless if your house was 5 bedrooms or 50 bedrooms. In 2024, the township increased the occupancy limit to two per bedroom plus two, with no limit outside septic. In most cases this bumped houses up by 2 persons, and septics usually thwarted an unlimited occupancy. However, some homes that benefit from central sewer saw a major jump in their allowance. Sensible I’d say.

The other major change in Tobyhanna Township that changed seemingly overnight yet making a massive market impact…there is now a cap on the number of STRs allowed in the township. The cap is at 12% of the homes in the Township. Meaning that if more homes are built the denominator increases (allowing more so long as the new home is not an STR). In fact, as of December 11, 2024, approximately 790 of the 880 allowable permits have been issued. Now, there are a few implications here and several trains of thought that stem from this we can walk through. First, while we are nearing the limit, I feel its important to stress that in the entire history of Tobyhanna Township, only 790 short term rentals stand as of this day. So relatively, another 12% of homes becoming STRs quickly is not totally realistic. We may taper off at steady amount for a few reasons. Alot of the homes that would already make good STRs already are STRs. Sure some homes have potentially that aren’t already being rented. These homes can and likely will become STRs if they hit the market. On the flip side, when STRs hit hyperpopularity in 2021 amidst low rates and Covid aftermath, many homes became STRs that should not have. These homes are now selling to permanent residents again, evening the balance. In the past 6 months, we’ve seen an average of about 5 new rentals coming on per month. My best estimation is that the cap could be hit as soon as the end of 2024. Maybe sooner and maybe longer. What does this mean?

The Implications: Okay lets get into the good stuff. Lets look at some direct and indirect theories.

Quick Note: You should sell soon if you were thinking of doing so and revenue potential is good. You should prepare to hold your home for a long time if not. You should know your property value is going to take a hit (potentially a deep hit) when the cap is reached.

Once the cap is hit, homes will not trade at prices the way they use to. In fact, this is already happening. Many deals fall apart due to the fear of the count. This is why you should always verify the exact number with the township or with us here at Pocono STR News. Unfortunately calling into the township does not always yield an exact amount or more than a vague answer (the few hardworkers at the township, amazing people, don’t always have the exact up to date list, and don’t want to be liable answering a question they are surely exhausted by). Well, no need to panic right now. However, if you own an STR and have the idea of selling on the horizon, soon is probably the best time to hit the market. Once the cap is hit, your best escape, and not a great one, is to sell your LLC. If you don’t have an LLC, then you’re going to have to sell at a steep discount from the value based on revenue if you are doing well. Your house will now be priced purely as a primary residence without the intrinsic property rights of being able to rent (don’t get me started on the infringement of property rights, especially changing rules after you already purchased without those rules). I digress. There are countless examples of HOAs and submarkets plummeting in value when restricting property rights.

Indirect Impacts of Tobyhanna Townships Cap

Quick Note: Areas outside Tobyhanna will get more competitive for investor demand. Homes within the township will feel a very mild relief and security from saturation.

Location is only one factor, although one of the more important for STRs. People who want to rent in Tobyhanna Township will continue to do so. Hence the relief and security as there won’t be new rentals entering quickly if much at all. People will still continue to buy, build, and trade STRs. This action will spill over to other regions across the Poconos like Lake Harmony (Kidder Township), Big Bass Lake, nearby Coolbaugh Township (also not ideal but a topic for another day). It will definitely be interesting to watch the ramifications as the cap gets hit. Personally I think it is possible, maybe not probably, but possible that once the township sees the impact to local tourism, real estate, and negative effects of the cap that they may bump the cap number up or eliminate it. Unfortunately, not all legislation makes sense and who knows what will come.

Conclusion: The Tobyhanna Township cap should be top of mind when considering your existing or future STR investment. You can reply directly to this email if you own in Tobyhanna and want to talk to a local expert about your options.

Best guess is the cap will come into play at the end of 2024. We will see the indirect impacts and rising tides in other areas surrounding this township heat up as the cap draws nearer and eventually gets hit.

Stay in the know by keeping up with us at Pocono STR News. Please share this publication with your industry friends and fellow hosts/investors to help keep them in the know.

Cheers to a prosperous and informed 2025 in the Poconos,

JD

About The Author - Jonathan Dempsey (JD)

• JD is a Pocono local and investor with a tremendous passion for short term rentals and travel

• JD owns multiple short term rental investments across the Poconos with homes spanning in sizes and locations. JD has a passion for finding, creating, and sharing the Poconos coolest rental properties

• JD has been a short term rental host of over 39,750 reservations, starting 6 years ago with the first guest in a shared room in his townhome, to now guest’s favorites across the Poconos

Pocono STR News Premium Unlocks:

• The weekly editor article with the can’t miss market opportunity week to week, market leader host tips, tricks, and exclusive news

• Private Facebook Group to share your private listings, off market deals, and vendor sharing

• STR Cash on Cash Calculator from Live Free Hospitality - The Market’s Leader in STR analysis

• Airbnb Design Starter Kit 71 items - every supply item you need to host

• Expert Local Agent support for help with purchase or sale transactions