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A Pocono Country Place, HOA Deep Dive · Short Term Rental Problems and Solutions

• Jeremiah: I was wrong to expect cleaners to be honest and hardworking. I was wrong to expect guests to act like me. Have you realized yet that it's not all sunshine and five star reviews? that means you're in the right place. Today we're helping Raj, An investor looking for a good deal here who wants to understand the dynamics of one of our largest HOAs, a Pocono Country Place. Specifically, he's wondering why the deals here appear to be so great. And it may be too good to be true. because this is the community where we talk about the gross, awkward, and the operational messes, as well as the real strategies that keep you going instead of quitting. Because this industry is somewhere where you can win big, where you can ignore education and you can quit. Welcome to Short-Termin Mental Problems and Solutions. Let's get into today's email. Hello, Jeremiah. As I've been researching different HOAs and investment properties, I'm trying to satisfy three key criteria. Diversify beyond the stock market while earning at least a 20% cash-on cash return. Buy a home my family and visiting relatives can enjoy a few times each year. And stay under a purchase price of $375,000. I'd also prefer something that's as turnkey as possible. Furnishing and decorating or adding a few guest friendly upgrades is fine, but I'd rather avoid a major renovation. One thing keeps catching my attention a pocon country place seems to check every box, but their fees are low by comparison. Whenever that happens, I assume there's something I'm not seeing. I know your podcast is more about operations of rentals, and it's got me planning to self-manage, which helps a lot with underwriting. What's the catch with the Pocon Country Place? Why are homes here so much less expensive than similar properties in other neighborhoods? Regards, Raj. Well, Raj, I think you're right to be suspicious. I'm really glad I can offer some free advice, but first. I have to start with a disclosure because I am a real estate broker. I have to be careful that I follow the real estate law. So I could get in trouble for steering if I give you crime statistics or tell you to buy in another neighborhood or talk bad about the schools here. So for crime stats, school info, comparable HOAs, I would need you to just do your own research. But what I'm gonna do is I'm gonna speak only about this one community and not try and push you towards one or the other. And we're gonna try sticking to just comparing this one to the average. So, yes, there are some hidden fees. the $50 registration fee seems pretty good. there's a late fee of $75 if your registration comes in by email less than 48 hours before the guest checks in. The $200 annual fee is not very standard, but there's one other HOA out here that does have an annual fee, but then also has, you know, a per reservation fee after that. Now, something that seems a little bit high though is the pool passes. So those are $12 per person per day, and they are optional. That's very high. Other communities, they charge $8.50 per person per day or $5 per person per day. and those are based on the length of the reservation, where these pool passes are optional and can be just for one specific day. So if they only want to use the pool on Saturday, they can choose to just use the pool on Saturday. other things to understand is that you've got public water through Aqua and you've got community sewer through Pocuna Country Place. So owners have complained to me before that their water bill can be zero because it's metered while they're still paying their sewer bills. So they're not using the sewers, but they still have to pay the bills for the sewer. That's a bit annoying. But the next thing I would point out is fines. you get fines for unsightly property, you get fines for traffic violations, you get fines for fireworks, even if they're not at your house. the fireworks could be going up from your neighbor's house or somewhere on your block. They might just give a fine to everybody on the block and wait for the people to either pay them or prove that it wasn't them. How do you prove? That there were no fireworks at your property. That's like proving that there was no elephants here by taking a picture of the entire yard in order to show that there's no elephant footprints. how do you contest a fine like this when it's your word against theirs and the one making the accusation is a security guard? I don't know, but it's amazingly dumb. But it's more common here. Than in other places, from what I've heard. the next thing that you aren't really taking into consideration is the amount of time that you're likely to lose dealing with their office staff and dealing with headaches related to the gate. Now, you might think that it's about average, it's actually way, way worse than the average. And I don't mean to like sound like I'm complaining, but if you get a fireworks fine, for example. You call their office and then you press one and you leave a voicemail for what seems like the right department. The next day you still haven't gotten a response. So you call the same number, but now you press two and you leave a voicemail for them. And then you call again and you press three and you leave a voicemail for them. Now two days passes and you still haven't gotten any responses from either one, two, or three. That's the kind of stuff that we're talking about. Finally on day six, after calling seven or eight times, you finally reach somebody and they speak to you and tell you that, person number four is gonna get back to you. And you just want an answer. You want a response. You want to know, what do I have to do to contest this fine? And they're like, just look at the back of the fine. It's like, I don't have the fine. It wasn't given to me. It was mailed to the property owner. They told me to handle it. And so I guess you can kind of tell that's a little bit frustrating. But that's just dealing with the office. Dealing with the gate is even more of a complication because your guests, your contractors, your cleaners, they all have to get into this small parking lot that's almost always packed. They have to get into line, which can take, two minutes or it can take 25 minutes. And then once they get to the front of the line, they have to give their printed registration for their vehicle and their ID and tell the lot and section number of your property in order to get through the gate. Now that's going to take another minute or two. They're going to print a green piece of paper. That green piece of paper you take with you and you have to roll your window down, even if it's raining, even if it's windy, and show it to the same person that was just in the welcome center. But now they're seeing it through a tiny Screen and they're going to now press the button to manually open the gate. Now, this happens thousands and thousands of times per day. I may be exaggerating. It happens every five to ten seconds throughout the day. Continuous. And there's only one gate that you can go through. So guess what happens when that one gate breaks? it takes even longer. Guess what happens when their printer goes down? They're stuck sharing one printer. So like There's all kinds of issues that come from this gate operating this way. And I'll get into later some things I think should be fixed for that. But the gate has this humongous effect on the values in this community. And just to give you one example of why that happens, I was showing houses to an investor, and I got to this welcome center, and the investor got there. We both walked inside with our registration and our documents and everything. I gave this person the stuff and it was April 1st. So I thought they were joking. But my registration on my car expired March 31st. So it was one day expired. Well, they told me I couldn't have a pass. They gave my buyer a pass but they wouldn't give me a pass. So what I had to do was actually sit in the back seat of this person's car while we drove to the house and walked around and I showed it to them. Then we had to get back in. In their car and drive back out of the community to the welcome center where I could get back in my car. It was so incredibly inconvenient. And I can tell you for a fact, that doesn't happen in any other community. Nowhere else are you going to be denied entry for a showing because your car registration is one day expired. But in Poconna Country Place, that is the case. And I couldn't just like if I wasn't there with a buyer. I would have just been turned away. If I was there to, I don't know, stop a water leak, for example. Like let's just say, like, your water main burst in your house and somebody needs to go over there and shut off a valve. And I show up and my registration is one day expired. I can't get in. Now you might think, well, Pennsylvania allows you to update your registration online. And yes, they do, but it has to be printed. It has to be printed. So here you are. 100 yards away from the house, fixing the problem, turning off the water, and you can't do it because of a stupid technicality with their gate. I'm so sorry that you're experiencing this, Raj. I just get so frustrated by this. They can't use some common sense. And there's obviously a little like pushed down emotion related to this. It's just so bad and annoying. And you do that to enough people, and your neighborhood gets a stigma to it. And people don't want to do anything in that neighborhood. They don't want to do any work there. I know contractors, perfectly honest, good, hardworking contractors, who say, I will not go through that gate ever again. I'm not doing it. where is this located? that sounds like it's on Knollwood Drive. I'm not going there. You're gonna have to find somebody else to do it. So the community, because of the way their gate is done, they make the lives of their homeowners unnecessarily complicated. They make you choose contractors who are more expensive because there's only a few who are actually willing to work here. And because of that, it leads to the depressed values because locals have that stigma. They don't want to buy here to live here because of the gate, because it's out here in the middle of nowhere. Not actually, We're still only like 10 minutes from Kalahari, but it feels like it's out here in the middle of nowhere. So people don't want to buy here, which means you don't have locals purchasing property here. You have investors who are not nearby purchasing property here. So Those depressed values come from the gate and the dynamic for the gate. They come from the stigma that the community has. And there's a few other factors involved. So one of them is that you only have quarter-acre lots here. It's not that unusual for neighborhoods that have public sewer utilities here. But the average lot in the Poconos is about a half an acre. So when you're comparing this to other detached single-family homes. In the surrounding region, most of them are on a half an acre lot. And so when you're on a quarter acre, your homes that are nearby, they just feel a lot closer to each other. And a big reason to come here in the summertime is to be outdoors. So we have decks and we have patios and we have hot tubs and fire pits and things like that. They're all outside. But when you're outside, you want a little bit of privacy and you want to be able to play your music and not worry about your neighbors complaining. And you don't have to worry about like quiet hours, That's kind of one of the reasons why you should have bigger lots. But here's there's quarter acre lots. So with that comes down the values a little bit. Same thing is true for other homeowners associations that have quarter acre lots, but that is leading to the depressed values. thing is neglected properties. So there is a halfway painted home on your way to where I'm located now. I'm sitting in one of the properties that I manage in Poconot Country Place. I manage like 12 properties over here. But on the way here, there's a house that's a quarter corner lot, and it's got paint only on one half of the house. It was clear that somebody stopped part way through painting this house and it looks bad. Now I was talking about fines earlier. I'm 100% certain that that property owner is getting fines, $100 per occurrence. For an unsightly property, but They also have really tall grass. this is like more common than I would like to admit in the community. And it just looks like a blight on society. It just looks bad. And yes, they're getting fines. But the property owner doesn't care. They're not doing anything about it, or they can't find somebody to do something about it. This is also a neighborhood where you find some driveways that are just completely packed with cars. And it might be a driveway that's like double wide. Well, you now you've got six cars parked in this driveway. And like right down the corner from here, there's somebody who's constantly working on their car. And there's rotors, laying next to their car. And there's an extension cord running into the hood. It's like 2012 Dodge Challenger. Like it's a sports car, but like it's got three different colors on it from Rust. It's not a great car, and they're always working on it in their driveway in the community. Like this is kind of what you get here that you don't really see anywhere else in this region. And that's because there's a lot of long-term rentals here, which I'll get a little bit more into in a minute. But like the community's a little bit disorganized. You know, they've got rules and they've got fines and they've got things that they try to do. They're just really ineffective at all of it. and a lot of that has to do with all of their staff being overworked and them not having enough staff to get everything done for the community. So there's a lot of things involved there. now understanding why those values are low at the stuff that you're looking at, Raj, like these are really nice listings. but what you should recognize is that there's way more three bedrooms than there are fours, fives, or six. And there was a six-bedroom house that sold recently, and it was only $362,000. Like that's what I think you should hold out for. Currently, the most expensive listings in Pocono Country Place are three bedrooms and four bedroom houses. Pocono Country Place has basically two types of homes. Those that were built prior to 2000, and those were built after 2000. So prior to 2000, the advertising, the marketing was all done in New York City, and it was come here, build your vacation home. It's not move here. It was just like, we've got cheap lots, lots of amenities. There's pools and lakes and you know, public water and public sewer and You can build a house here. So what were people building? They were mostly building contemporary style homes. Those are the vaulted ceilings and the three-bedroom, two-bath houses. And they were building some chalets. Not too many, just some. So that kind of also reflects the demand that you saw in the 70s and the 80s and the 90s. It was usually just a second home for what my uncle calls the rich man's family. That's a husband, wife, and two kids. So this second home demand was for like families with one to three kids. And they need a three-bedroom house, they need a four-bedroom house at the max. So their vacation homes were generally small and inexpensive. crawl space foundations and electric baseboard heat. And you know, not cutting down too many trees, a small lot, really nothing exciting. So that's basically what was being built here. And it was being built for people from New York. That's the only place that these developers were actually advertising. They weren't advertising in the local MLS. They weren't advertising in the local newspaper, and they weren't working with local realtors sometimes. They were just marketing these things in New York City because they were having a lot of success and a lot of luck. In getting New York City dwellers to buy their vacation country home in a Pocono country place. Make sense? So that's what we were finding a lot of. Now, from 2000 on to 2010, there was a ton of builevels, colonials, and ranches built. And that's reflective of the new trend. The new trend that Pocono Country Place took advantage of was actually people wanting to commute from the Poconos back to New York City. And there's entire bus lines that are devoted to just these commuters and going back and forth and back and forth and back and forth every single day. Now it's an hour and a half to two and a half hours, depending on where in the Poconos you need to get dropped off. But there's literally a bus station that'll take you right to Grand Central outside this neighborhood. Like literally right outside this neighborhood. Like if you're close enough to the front gate, you can just walk to that bus station and you can hop on and you can go right to New York City. It's that convenient. And it's because it's that prevalent that we have this. So in that like time frame, there's a lot of things that happened, right? Like 9-11 happened and it caused people to want to move out to the country to get away from things like terrorism and gang violence and things like that. Also, high taxes and the cost of living. Now, the gas prices back then were quite low. But then you'll remember in like 2006, 2008, the gas prices went up. So it became more expensive for people to commute, more expensive for them to hide the bus. So, a lot of those people kind of stopped living here. But I'll get that in a second. So in 2010 to 2020, during that decade before COVID, practically nothing was built in the Poconos except if it was on a lakefront property. Or it was in some of the communities that support much higher values, like a higher cost per square foot. cause think about it, if it's going to cost you $150,000 to build a house, why would you build it in a neighborhood where your value is only going to be $140,000 after it's built? Why would you not build it in the neighborhood where it's going to be worth $180,000 once it's built? Or put it on a lakefront, pay $100,000 for the lot, and now the house itself is worth $350. So your biggest opportunity for equity is on those choice lots. And that's the only spot where people were actually building from like 2008 all the way up until 2020. so then the COVID bump happened and it affected a lot of things. But another thing to understand before I move on to that is this oversupply of three bedroom homes is also because of traveler trends. So what we're seeing is basically two types of travelers. There's not enough supply for the like multi-generational, I need five bedrooms, six bedrooms, seven bedrooms, all these separate spaces. If you've got like three or four primary suites, like ensuite, like bedroom, bathroom combos. And you've got enough extra rooms for all those little kids, then you've got a property that's in high demand because there's not many like you. And there's a lot of travelers that are coming to the Poconos that want that exact type of layout. So the houses that have lots of bedrooms, lots of attached baths, those are in high demand. But the three bedrooms aren't. Now, for the same price, you might be able to get two or three of these three-bedroom cabins. But the six bedroom ones are in clean air, right? there's less competition and there's way fewer options for those renters. So you don't really have to do as much to compete as you would if you were at a three-bedroom house. The other traveler trend is people without kids. So these people, they only need one bedroom and one bath. It's usually a couple. they sometimes have a dog or a cat or a parrot that they want to travel with. So making it small, cute, and pet friendly. is another winning opportunity. but what we're finding is that there's fewer families because those families are much more involved with keeping up with the Joneses, going to school sports, that sort of stuff. The other trend I want to explain, I can get into this more if if you want to hear about it, Raj, but I call it the dartboard effect. So when somebody searches on Airbnb, For one of their top three destinations in this region, they end up staying at a place that's nearby. Kind of like throwing darts at a dart board. You're trying to hit the bullseye, but where you end up sometimes is not the bullseye. It's like the first circle out or the second circle out. So, to give you an example, if somebody wants to stay near Camelback, they want to come up here and they want to ski, then they're going to type into Airbnb for travelers going to Camelback. Now, what Airbnb is going to show them is properties that are in Camelback, like in that close vicinity to Camelback. That's the center of the dartboard. And then it's also going to show the immediately surrounding area and less of a more extensive surrounding area. So where the guest ends up finding a rental could be in the center of the dartboard or outside of it or even further outside of it. So, in real terms, looking at a map, what that means for us is they'll end up in Camelback, or the second circle would be Long Pond or Pocono Summit, and the third circle would be Pocono Lake or Toby Notice that Tobihana is where Pocono Country Place is. And that is a third circle. Now you don't want to be the fourth circle because that doesn't even show up in the search results. But on, you know, if demand goes up, Then there's more of that fourth circle, fifth circle stuff going on where people are going further away just to get the camel pack, the other two ones that I think people are really looking for is Kalahari, which is not the name of a town, and Lake Harmony. So I think they're looking for those three places. And from Kalahari, Tobihana would be a second circle, as well as Pokono Summit and Long Pond. So you kind of understand that like Tobey Poconut Country Place is kind of like a second option. It's kind of like a plan B, right? If somebody doesn't get a place that's close by, they end up going further away. Now, getting back to that three-bedroom inventory situation, right? There's tons of three-bedroom houses and there's not very many people looking for a three-bedroom house. So if somebody types in Camelback, then what you're gonna have to understand about the Camelback region is that there is a ton. Of three-bedroom inventory right there next to camelback. So I would say like 90% of the units in the camelback region in the center of the dartboard are three bedrooms. Whereas maybe 8% are four-bedroom. And then the rest is fives, and there's like one six-bedroom house. So there's almost no large house inventory next to Camelback to accept those reservations. Except those renters that are looking for a house that can accommodate 16 people. So they're not really finding anything in the Camelback region, which means that if somebody's looking for three bedrooms and you've got a three-bedroom in Toby Hannah, they're going to skip over all of those options next to Camelback, which is a ton of options. They're going to skip past everything in Pocono Summit and Long Pond, and they're going to find your house somehow. In a sea of other houses that are in Poconor Country Place that are also three bedrooms. Are you getting it? Are you starting to see like how complicated this gets and how there's other factors at play? Right. it's like if you're trying to stay at the beach and right next to the water, There's like 15 waterfront properties that are three bedrooms. And then the next block over, there's another 15 three bedrooms. And then you end up being the third block, and there's another 15. And the demand. Goes up and it goes down. But where people want to stay is right next to the water. Now the prices are highest right next to the water, right? But why would they stay three blocks away when they can find some place that's a better price closer? So you end up being a gorgeous property. However, because of your location, you're not as in demand as you would be if you were closer. That kind of traveler trend, like that dartboard analogy, I think really holds up in the real world because when people are looking for Lake Harmony, they end up in Blakesley and Albrightsville. Sometimes they end up further out in Pocono Lake or Jim Thorpe. But nevertheless, they're trying to get to Lake Harmony because of what's there. or they're trying to get to Camelback, or they're trying to get to Kalahari or Great Wolf Lodge because of what's there. And Toby Hanna is never the first choice because there's nothing in Toby Hannah. Except for the army depot and a couple of distribution centers. So there's no reason why your guests are coming to Toby Hannah. And don't say the lakes, because the lakes aren't particularly great either. Poconut Farms Country Club has one tiny lake Pocono Country Place has two decent-sized lakes with a lot of lake houses around it. So that it's got, but Tomihan doesn't really have any other attractions. There's no waterfalls, there's nothing really bringing people to this region other than the houses and the lakes. There's which, again, there's not that many great lakes. Back to the point. to understand why this area has a bit of a stigma and why these dynamics are taking effect. You need to understand that, like just about seven years ago, this was a paradise for landlords. So gated communities across the Poconos have always had lower values. And they've always had lower values, even though they're gated, it doesn't bring up the value. The number of amenities doesn't bring up the value. In fact, it makes people who live here want to not live there when they have to deal with the gate. So what ends up happening. Is the values go down, but renters need a place to live. people will buy vacation homes and then they stop using the vacation home, so then they turn it into a long-term rental. the Poconos was kind of hit hard by this. Now, when the properties up here were being developed, it was all being advertised to people in New York. So after 9 11, like we were talking about, there was a ton of cheap homes up here. And commuters decided to move in because the homes were cheap, the taxes were low and everything else, and they could now own a property rather than paying rent for an apartment. So it seemed like a winning like strategy. But that was also during the time of the subprime mortgage crisis, right? So in 2008, a lot of those people who never qualified for a mortgage in the first place still got a mortgage and now they couldn't pay for it anymore because they decided it takes too much of my time to commute. I don't want to keep doing that. So they moved back to New York and some of them became landlord by default, which is where, you know, if the rent doesn't get paid this month, the mortgage isn't getting paid. So by default, I'm a landlord. I have to get rent in order to make the mortgage payment in order for me to pay my rent in New York City. So I'm just gonna move back because the property is underwater, right? So you get it. A landlord by default is like, I have to move and I can't stay here. So I'm gonna have to find a renter. Now that presents a ton of different challenges, which as you can imagine, would affect the values in the Poconot Country place. when gas prices went up, values went down, the real estate bubble burst, that caused a foreclosure crisis because well, a lot of these homes were just completely underwater. They had been bought during that upswing of value from 2000 until 2008, when values were going up so fast, they had been bought then. But then once the values plummeted, they were underwater. So what do people do when their properties are underwater? Sometimes they will let it foreclose, sometimes they do a short sale, sometimes they just rent out their property. But at the time, these properties were only renting for $600 to $1,000 a month. So sometimes that wasn't enough to cover their mortgage, and that caused other issues, right? So this area, Poconna Country Place, was specifically very hard hit by this foreclosure crisis. And there were foreclosures that were selling for $20,000 to $40,000. And you see this over and over and over again in the records that homes up here were being sold for these really, really low dollar values. And then they weren't even like in bad shape necessarily. They were being turned over and turned into long-term rentals. So landlords had this fabulous opportunity to invest like $25,000 and to start making $600 a month on it. That's incredible. Usually to get $600 a month, you to pay $60,000. So, like real estate was on sale in Pocono Country Place. In other neighborhoods, they just weren't selling for $20,000 to $40,000. They were selling for $40,000 to $80,000 or $80 to $120. The foreclosure prices were closer to the actual prices, but because of so many foreclosures here, the banks were just kind of competing with each other and it's a race to the bottom. So That helps you understand like why this area became such a landlord paradise. It's because like people who were underwater with their mortgage because of recent purchases when subprime mortgages and all this other fun stuff, they just became landlords. Instead of selling the property because nobody would buy it, they just rented it out. And they were making 600, 800, whatever, and they were looking for an opportunity to sell once the value came back up. But from 2009 until 2020, nothing really happened in our marketplace. The average value went from $104,000 up to $114,000. That's not necessarily enough to get out of your mortgage. Not when you bought it at $120. COVID literally doubled the value. And that caused a whole bunch of people to be like, all right, now's the time to sell. Finally, I can stop being a landlord. So they would, you know, get their renters to move out. Sometimes they would put some new carpet in, or they would fix the roof, or, you know, whatever to make it sellable. But they were selling their properties finally because they were no longer underwater with their mortgage. And that had to do with inflation, right? But also, hey. They've had 12 years go by now where they had the opportunity to pay down their mortgage to the point where now they've got some equity. So because the values spiked, they said, all right, it's finally time to get rid of my house in the Poconos, and they put it up for sale. They sold it, and people who bought these houses were short-term rental investors. And in the 2020 to 2023 timeline, they were making money hand over fist. It didn't matter how nice the house was, you were getting rentals because the demand was that high. And then Things kind of slowed down. So since 2023 to now, a lot of those STR owners that never improved their properties or they didn't have good operating standards, a lot of those properties just aren't performing. They're making $1,000 to $2,500 a month after expenses and utilities. So those property owners are turning around to property managers like myself and saying, can you put a long term renter in there? And that's why I manage so many places in here. Because they were a short-term rental that was making money and they're no longer making money. So now we put long-term renters in there, and now somebody else has to pay the electric bill with the electric baseboard heat. And they're still making $1,500 to $2,000 a month in long-term rentals. So they're either doing that or they're selling. And that, Raj, is what you're seeing on the market today: you're seeing homes that were sold and then were fixed up by flippers. Or you're seeing homes that were improved and can be improved some more, and they were short term rentals, and the person's just, you know, isn't interested in renting it out anymore. You're seeing stuff like that. there's also some slum lords who own property in here that are looking to liquidate. And what they're doing is they're, you know, finally just getting around to the tax strategy of selling. They're getting tired, they want to retire, whatever. So those slum lords, their properties are not in great shape, but they're selling it off nonetheless. And so a lot of them are just selling to flippers or you know something else like that. So that explains why you're seeing what looks like such fantastic opportunities out here. So let's talk about the STR market again. There is an oversupply of three-bedroom homes, but there's also all these other challenges. When you're operating a short-term anal in Poconot Country Place. And the big one, getting back to it, is the gate. It's how strict they are and how inconvenient it is for you to get through the main gate. Now the same thing does happen at the other two sections. So don't tell me I'm in J section. So it doesn't matter. it still matters. I was turned away from the J section gate because I didn't have a printout. of a listing that was for sale. I guess they just didn't believe that I was a real estate agent that was going to a house that was for sale and that I was just making up an address. That I had to have a printed copy of the for sale listing for them to believe that I should be allowed through. I really I can understand the registration to a point, but for you to not let me get in just because I can't show you it, they had me go 10 minutes down the road, five minutes, I guess it's five minutes, back to the main gate section. And they were willing to look at the for sale listing on my phone. But J section, nope. Anyway, back to it. So you wonder why the community has a stigma with the locals and why some contractors aren't willing to work here and why some cleaners aren't willing to clean here. It's because they have to deal with this gate. So getting back to some other things, the registration fees and the pool passes, like I was telling you, it's higher than normal. There's other gated communities out here. And for a three-bedroom home that's renting to 10 guests from a Friday to a Sunday in Poconoke Country Place, if it's late, you're paying $245. Where in another community that has quarter acre lots and a lot of amenities, you're paying $350. So it's not the most, but it's not the lowest either. And so two other communities, one would be 110, the other one would be 75. So again, not steering you, not trying to tell you where to buy. just giving you some comparisons by prices. So it goes from 75, 110, 245, 350. Okay. And that's if your guests want to go to the pool, they want to go to the lake, they want to do things. It's $12 per day per guest. And that's just if they want to rent your house for three nights and go to the pool on the middle night. That's like Saturday. Longer stays, obviously it gets much more expensive to come to Pokona Country Place because it's twelve dollars per person per day versus the other variable rates, which are five dollars and eight fifty. Now, Raj, I I can already hear you saying, but what if the guests are looking for a pool? Aren't they willing to pay more for a house that has access to a pool? And their answer, like, yes, I think that's true, but there's still a ton of inventory that has access to a pool. So that's not an area that's underserved. Like in marketing strategies, it's supply and demand, right? So there's much more supply than there is demand. So I think that the value of getting a house that has access to a pool is kind of low relative to the cost that you're paying in your HOA fees or the cost that you're paying in the pool passes. But nonetheless, in this STR market, I still feel like a niche property can still do really well in short-term rentals. So my recommendations go all in with your theme. So I saw a property over on Fairhaven that was for sale. I think it's closed now, but they went all in with their theme. They also had a decent amount of privacy because of the geography and the the geology that you'll see the rocks in the video that's around it. And if you are listening to this on Apple Podcasts, thank you. If you're listening to it on another, audio only version, thank you for listening. on YouTube, you're gonna see a bunch of video for this because I've got a lot of video of this neighborhood, of the community, of some of these houses that I'm talking about. And so that's going to be on there, by the way. You might want to check it out on YouTube. Anyway, if you can get similar to this property on Fairhaven, I think you'll do really well. And it had gone really in on its theme. It was a gorgeous property. They did a really nice job with it. another thing that you can do to offset the whole quarter acre vibe is you can add privacy. Now that could be like curtains, the outdoor curtains, or you can do like a privacy fence, a hedge, things like that. so just think through how to do that stuff. you can also buy property that's lakefront. that's a niche, and there's always going to be a demand for lakefront property. And out here you can get a lakefront for like 350, sometimes $400,000. And now it is a fixer upper at that price. But like usually lakefront out here starts at 600. So the fact that you can buy in Pocono Country Place a lakefront property for like you know 40% off is like incredible. So that's an area of really strong opportunity. if your house is like the one on Classic Drive, which again I'm gonna show you some videos now of that, it has an indoor pool, that will also do really well. Now There's indoor pools other places in the Poconos, but in Toby Hanna, I'm pretty sure this is the only one. So if you want an indoor pool, you're paying a premium if you're looking in Toby Hanna. That's the idea. Now, I think there's also an opportunity if you're buying in this community. I think there's an opportunity if you are right next to. The pool. the pool is a really nice amenity, you know, and I I talk about how expensive it seems like it is for the pool passes, but if your house is like backs up to the pool. And you get the pool passes, which are like $500 a person for the whole season, then you can advertise that for your renters, that there's no additional fees and it'll be really awesome. And you know, that sort of thing. I feel like there's a really good opportunity for that as well, especially if it's walking distance, because a lot of people are just coming from New York and they don't need an Uber to get to your house because they can just take a bus line. So there's benefits, you know, to this location as well It sounds like I'm complaining a lot and it I'm not. I'm just talking I'm telling you like it is. Like the the the challenge of the gate, how close the homes are, the number of long-term rentals here, those are the downsides. But here's one huge upside, and here's what I'd really like to see you do, Raj. I'd really like to see you buy a property in Poconut Country Place and then run for the board of the homeowners association. Because you don't have to live here to be on the board. It's not like the township supervisors. Once you are on the board, be instrumental in hiring a fantastic general manager. If you could find somebody that doesn't sanction incompetence and has some, you know, some motivation and some some power and some some authority, like you could put somebody in this general manager position that's going to really raise values. So right now, You're basically getting these properties at like a 20 to 30% discount. But if you could turn that community around, you don't have to fix up the properties at all. And you're going to get a value that's 20 to 30% higher when you sell, just because you were instrumental in helping fix the problem. So that's what I'm getting at. So what would a great general manager do? Well, they'd hire some more staff because there never seems to be enough people to get the Be the most basic amount of work done. People pay the fine instead of wasting their time talking to the office. That should not be the reason they pay the fine. They should not be known for being that bad at getting back to people, but they are. Anyway, they'd hire more staff in order to improve customer service. Now, the next thing that they would do. Is stop sanctioning incompetence and they would fire the bad workers, the ones who don't know what they're doing, the ones who never got full training, the ones who are causing the problems. Fire them. And you might say, Well, Jeremiah, that sounds like you're going to make everything much more expensive. You're going raise in order to hire more people, you have to raise salaries and benefits and things like that. Yeah, but it's marginal compared to the value that you get from that. Now, Jeremiah, don't raise our HOA fees. It's not going to happen. Or maybe it will. I don't know. I'm not on the board. But just hear out the whole plan because I'm not done yet. What we need to see is it become more difficult or or dare I say, impossible to be a slumlord. Because if we could stop people from being slumlords, then we would actually be opening up those properties for purchase by other people that are not slumlords. And then the whole neighborhood's gonna be taken care of. Now, the community requires inspections, but only for short-term rentals and only by the township. Well, they don't have anything for long-term rentals except for a registration form and an annual fee. But that fee doesn't do anything except for register your renters. So if they had a permit and if they had inspections, then they could say, you're not fit to rent. We're going to be reporting this to the township and you're going to fix these issues. Now, if it's a halfway painted house, if it's an unsightly property, like you can actually revoke somebody's permit. Like so get these long-term rental landlords under control. That's something that a good general manager would do. Yes. Seems like it's so obvious, right? If most of your properties are long term rentals, then why, why can you not force your long term rental slumlords to take care of their properties? It's just it's it's the majority of the issue. Okay, with making this community look like a slum and you can handle it with good management. Getting back to it. a huge opportunity for savings. Huge. All right. This is where you're gonna get all the money for these other things is put your registrations online. Stop doing PDFs, stop making this in a manual task. You can have software take over this whole process. Registrations going online, getting accepted last minute without additional fees. it would be wonderful if you could make this something that guests can do, like a self-service, so that after the reservation is confirmed, I can send the guest a link where they can fill out their information. That way it stays private. Instead of having to put it onto some weird PDF, they can fill it out, it stays private. And whether the payment is taken there by credit card. Or the payment is taken from the property owner, I don't care. But make it something that's done electronically, because currently it's not done that way. And it again is super annoying. And whenever there's an issue with the payment or the late fees or whatever, it's impossible to get a hold of somebody in a timely manner to get that issue resolved. Getting back to it. So if registrations were able to go online with a little software, especially if it was self-service, that would be amazing. Now. Stop using the gate strategy that you're using. It's lowering your values. Just fix the gate issue. So, well, that's easier said than done, Jeremiah. Do QR codes. What Arrowhead Lakes did was they had basically the same issue where people had to get out of their cars and walk into the office in order to get registered. Well, What you can easily do is what they did. And now it wasn't necessarily easy, but it's so much better now. And you can look at what they paid for this software program, but it's much better. Imagine how easy it would be as a contractor for me to just tell a property owner send me the QR code and then I will leave. I'll leave my current location and I'll deploy people to your location. Send me the QR code. The property owner can send a QR code because they go to their Portal, they go to their app, they put in the contractor's information, what kind of truck they're driving, what year, color, and license plate number. And then they send the contractor a QR code. Contractor opens that up on their phone, scans it at the gate, goes right through, doesn't have to talk to anybody, doesn't have to print out their registration, nothing. That sounds amazing for Pokena Country Place. And it would solve the problem. And you've got sometimes I've seen as few as three at any one moment, which represents nine salaries, or as many as seven people registering people at that welcome center. Seven people. So we're talking probably 10 to 15 salaries are tied up in the way that you're doing registration and your gate currently. You can eliminate all of those or train them to do other things. Poconut country place. absolutely needs a new position called public relations manager to eliminate the stigma to put out the positive things that the community is doing to advertise to do things like this which will actually improve the values there needs to be somebody that that reporters can call and speak to in order to get a statement from Pocono Country Place as a community there's not the general manager is not calling anybody back. Nothing is happening. Which means that reporters are left to tell the news without any positive side to this news, which again just further enhances the stigma that locals don't want to live here. So, do the QR code. It's going to save you so much money in the long run. You can redeploy those human resources, the personnel, to things like public relations and keeping the staff that's not incompetent. How about that? Now, what else? it would be cool if short-term model owners in the community worked together and they pooled their marketing resources instead of like competing with one another. Just want to put that out there. another thing I highly recommend and that I think a good general manager would do. Is it would revise their COVID limitations. So I've been told that based on the six foot distance for social distancing, that the number of people allowed in the pool or the beach area is limited. So maybe it's 100 people. Well, what happens on the 4th of July when it's 95 degrees out is they have a line of people waiting to go to the pool that paid $12 for their pass and they can't go to the pool. So now when something becomes limited, people don't want to lose it. So once they get in the gate. Don't want to leave. So they pack lunches and bags and all kinds of things because they know they might not be allowed to come back in if they leave, which means that the line is even longer. So people paid $12 for a pass to go to a pool that they can't get into because of social distancing. And this is 2026. I think a very common sense thing to do would be to revise that number. If your current maximum is 100, because People have to be able to be six feet apart, then how about you make it three feet apart? Maybe we can fit 200 people in here. Hmm. I don't know. That seems like common sense to me. I'd think a good general manager would do that. maybe instead of turning people away at the pool because you've reached your occupancy limit, maybe just stop selling passes. Maybe just have a limited number of pool passes that you can sell for that date. And once you hit that limit, you stop selling them instead of putting a maximum occupancy on the beach. Hmm, maybe that would work better. I don't know. But what's the result of all of this? What's the result of better management? The values. I'm telling you as a real estate broker, the values would increase here by 20 to 30 percent. Yes, more sales would occur because when pressure, like what I'm talking about, is put on slumlords, they're gonna put their properties up for sale. But that's a win for the community, and it's bringing to bring in a lot of money to the community. Because when slumlords decide to sell, all your fines get paid. Because they only sell the property when it's free and clear. No one's going to buy the property and inherit all the fines. The fines have to get paid. So that's going to bring in a ton of new revenue for this whole gate project. So follow me here. Values would go up, even though there's more sales going on. It would increase tourism to the town of Toe Hannah. Which is in Kuba Township. Kuba Township as a whole would see restaurants grow, stores growing. there's a couple of strip malls nearby, they would be full because entrepreneurs want to take advantage of new opportunities when there's more activity, when there's more tourism going on. When the values go up, people have money to reinvest into the community. When the values go up, people take their equity and they purchase another one. Like this would be a ripple effect that's going to cause. Way more solutions than it would cause problems. Nevertheless, that comes from good management. So why don't more people talk about this? It's a good question. It's not because it's impossible, but I don't fully know the answer. And maybe they are talking about this. Maybe within that HOA the property owners are talking about, man, what if we could just get a better general manager? And they've switched general managers a few times, but nothing has changed. So Raj, if you buy a property there and you've got these ideas and you've got the motivation to make it happen, you can get wealthy. But you need to make it happen. I don't know the full answer, but on this show, we talk about this stuff anyway, because this is the show where we discuss the challenges as well as the stuff that no one talks about when they sell the dream of easy passive income. If you're a property manager, an owner operator, a co-host, or just an investor, I'd love to help. Have you got questions? Email me at infogalvanizemanagement.com. Your question might be the next one that we break down, and chances are you'll help a lot of other hosts in the process too. We win or we lose together. If this episode helped you, great. Share it with another host who's in the trenches. Also rate and subscribe so we can organically reach some more people. That's how we make this industry better. I'd also love to see you follow on TikTok at Galvanized Investments and Facebook and YouTube at Galvanize Management. Until next time, stay steady, keep learning, and keep building something real. This is short-term mental problems and solutions.