Updated: Jun 14, 2019
There are lots of questions around Poconos Pricing and host charges. We would like to shed more light on why there are so many differences. We would like to be as transparent as possible and give some insight on how we determine our rental pricing.
There are many factors that create the rental costs. Breakdowns are below. Keep in mind a few major factors:
Mortgage - is is paid or brand new?
Investment Property vs. Vacation home - Is the owner using it as an investment property? - All operating costs are to billed to company. Is the owner using it as a vacation home? - rentals are just used to help pay for costs when they are not using the home.
Staff - some owners do all or part of the work if they live nearby (purchase supplies, clean, repair, vendor relations, property management, bookkeeping and filings) and some have different staff members for each of these jobs.
HOA or Resort - is it in a Home Owner’s Association or Resort with regulations and associated fees or is it a private home with no amenities?
Cleaners (paid by renter) - Costs vary depending on what the cleaners do. It is often a basic, light clean (not an 8+ hour deep clean) assuming the guests did not leave spills, messes and stains. Costs are usually by square footage, how many bedrooms and/or how many kitchens (that aways takes the longest) & bedrooms.
House Management (5-10%) - Some owners employ a house management to assist with supplies, pre/post rental check out, damage reports, and lives in the area for emergencies.
Handy Man (2-5%) - A handy person is needed to be on call for every rental, things need to be fixed in only a few hours for the next renter. (Our handy man is also in charge of emptying, cleaning, refilling, reheating the hot tubs as well as regular seasonal / weekly maintenance of property).
Property Management (20-30%) - Some owners have a property management company to take care of bookings, setup the guests, answer questions, sign leases, make sure HOA guidelines are followed, be on call during the stay as the main point of contact, deal with issues as they arise, give guidance to the owner, upgrade over seeing and often take care of bookkeeping.
Linens (many options; either paid by renter or incorporated in price. Mt. Maplewood Lodge it is optional to help reducing pricing for those groups that bring their own)
Many home use a linen rental service. Depending on the size of the home and number of beds, linens, towels and people. 2 br and 4 people and 2 loads of laundry - easy to do onsite in 3 hrs (if not on septic) vs. 15-20 people 5-6 BR and 8-10+ loads of laundry - can’t be done in 3-4 hours.
Can it be done in between rentals? (approx. 3 hrs)?
Does it have to be sent away for cleaning - septic systems can not take that amount of weekly laundry?
Do they provide old linens or keep new fresh stocked quality linens? How often do the linens need replacing because of wear and tear and how often are guests staining / accidentally making linens unusable (this happens often).
Operating Costs (Total 50-75%)
Mortgage (20-30%) - In this scenario, lets assume owner is only getting paid in equity or the mortgage being paid off as all other costs will go to staff & operating costs. The only other way for an owner to “make” disposal vs. passive income is to take on a staff position or if mortgage is completely paid off (usually in 15-30 years).
Insurance (2-3%) - Please make sure your home owners have BUSINESS Insurance and not just secondary home owners insurance. * A claim may be denied if the renter is not a family member of the owner or friend if they only have regular home owner’s insurance.
Damage & Repairs (2-5%) - A huge factor is if the owner rents to under 30 year olds, under 25 or 18 and up. Across the board the younger the group and the larger the group the more damage and repairs are needed. These costs get passed into the budget if it gets by the cleaners/owners and/or if the renter gets insurance.
Channel Partner & Service Fees (3-20% of booking) - Different Channel Partners charge different rates to host on their site for the owner and the renter.+ credit card fees. * We find Vrbo to have the best rates for owners and guests as well as service.
HOA Dues & Fees (3-5%) - There are fees associated to allow renters and owners have to be fully paid to allow them on property.
Legal (varies) - In order to make sure the home owner is protected they will need legal services to protect everyone involved.
Taxes - State & Local (5-15%) - Property and land tax. In addition, State taxes are required and many counties also have a municipal hotel tax required.
Electric (1-10%) - Big factor is baseboard heating vs central (propane gas). Winter can be as high as $900+/month depending on the usage by the renter and how they manage doors and fireplaces.
Propane - Heating & Cooling (1-10%) - A balance between electric if heating and cooling are not baseboard. Again, based on usage.
Sewer / Septic (1-2%)
You are our partner. We continue to take suggestions from our guests and discuss with the management team who has worked in the industry for he past 12 years. As our partner, the biggest area is damage / repairs. We offer insurance from CSA Travel to offset accidents and in turn we need to know of any issues that occur. All the rest we will take care of to keep pricing as low as possible, while providing a living wage for our staff. We hope this sheds light on how we determine pricing & look forward to your business!
If you have any questions or comments, please contact our GM:
Mt. Maplewood Lodge