Understanding Gross vs Net ROI for Poconos Short-Term Rentals
- Jeremiah Noll
- Aug 27
- 5 min read
Updated: Sep 14
Updated September 2025
TLDR: Gross ROI is your top-line revenue before expenses. Net ROI is your true profit after township permits, HOA fees, utilities, cleaning, insurance, and management. Poconos STR owners who focus on net ROI make smarter investments, protect profitability, and avoid costly surprises.
Let’s get something straight: just because a property looks like a good investment on paper doesn’t mean it actually is. The difference almost always comes down to one thing. Are you looking at gross ROI or net ROI?
This isn’t just a finance term. It’s the line between making money and thinking you’re making money. I’ve seen it firsthand, both in my own portfolio and in managing over 30 STRs here in the Poconos.
What Is Gross ROI on a Short-Term Rental?
Gross ROI is your top-line return, total revenue before expenses.
Let’s break it down the way I would if we were sitting across from each other at your first property walkthrough.
Example: You buy a chalet in Pocono Lake for $375,000, and it brings in $75,000 in bookings the first year. That’s a 20 percent gross return.
Sounds impressive. But here’s the part no one tells you. Gross ROI doesn’t factor in any of the real-world costs.
It doesn’t include:
Township permit fees (often $250–$500 per year depending on the township)
Airbnb or Vrbo platform fees (up to 14 percent)
Cleaning costs ($150–$450 per turnover depending on property size and location)
Emergency repairs or regular maintenance
Snow removal and lawn care (especially in Tobyhanna, Coolbaugh, or Tunkhannock)
STR-specific insurance
HOA fees (can be flat, or $100–$700 per reservation in places like Arrowhead Lake)
Utility spikes in winter months
Property management, if you’re not running it yourself
And that’s just the basics.
What Is Net ROI and Why Does It Matter?
Net ROI is your real return, the money you get to keep.
Here’s a real example from a home we manage in Jackson Township (owner personal use impact):
That’s a 2.6 percent net ROI, which is okay for a fully managed, hands-off operation. But it’s a long way from the 14 percent gross number that got attention in the first place.
Why Do Poconos STR Investors Miss the Net ROI Math?
The Poconos is a highly seasonal market. July, August, and the winter holidays are your cash cows. But spring and late fall are often soft.
If you only budget based on summer revenue, you will feel the squeeze in March, April, and November.
Add in:
Permit fees that differ across Coolbaugh, Tobyhanna, or Kidder Township
HOA costs in communities like Arrowhead Lake or Lake Harmony
Amenity badge rules, per-guest charges, and septic inspection requirements
Suddenly, that spreadsheet projection looks a lot thinner. If you’re not local, you might not even know these costs exist until after closing.
Gross ROI Gets You In. Net ROI Decides If You Stay.
Before managing properties, I taught high school math. So here’s the pattern I see.
Gross ROI gets people into STRs. Net ROI tells them whether they stay.
That’s why so many hosts get excited year one and list their homes by year three. They didn’t run the full equation.
How to Improve Net ROI Without Sacrificing Guest Experience
This is where good management makes the difference. At Galvanized Management we focus on net, not just gross.
Smart pricing: We adjust for local school calendars, ski season trends, and weather.
Cleaning quality control: Our in-house cleaners are paid hourly and incentivized to do it right, not fast.
Guest damage inspections: We walk every unit within 24 hours of guest checkout.
Vendor pricing: Local relationships matter. We’ve seen out-of-state owners pay $1,000 more for the same well repair.
You protect your ROI by managing the things you can actually control.
A High Gross Doesn’t Always Mean High Profit
Let me say this plainly. A property that grosses $90,000 and nets $20,000 is not automatically better than one that grosses $65,000 and nets $30,000.
One is a high-stress, high-cost operation. The other is a lean, profitable business. Most investors never see the difference until they are a few thousand dollars, and several gray hairs, in.
Final Thoughts for Poconos STR Owners
If you’re buying or managing a short-term rental in the Poconos, run the net math before you chase a flashy spreadsheet.
Every township is different. Every HOA has quirks. And not every $75K revenue property is a winner.
At Galvanized Management, we offer a real net ROI review before you ever sign a management contract. Whether you’re hosting now or still shopping, we’ll show you the numbers and tell you if it’s actually worth it. No fluff. No pressure. Just the math.
Contact us to start the conversation.
FAQ: Poconos Short Term Rental ROI
What’s the difference between gross ROI and net ROI on a Poconos short-term rental?
Gross ROI is total revenue before expenses. Net ROI is what you keep after cleaning, utilities, permits, insurance, platform fees, and management.
What is a good net ROI for a Poconos vacation rental?
Five to ten percent is considered strong for a managed STR in the Poconos. Self-managed homes may push higher, but only with strong systems and low expenses.
How do I calculate net ROI on a short-term rental in Pennsylvania?
Divide net profit by total investment and multiply by 100. Use real expenses including Airbnb or Vrbo fees, utilities, HOA dues, township permits, and management.
Which Poconos townships have the highest STR expenses?
Coolbaugh, Tobyhanna, and Kidder stand out due to higher permit costs, stricter inspections, and HOA guest charges in communities like Arrowhead Lake or Lake Harmony.
Does hiring a property manager reduce ROI?
Not if it’s the right manager. A good local manager increases net ROI by cutting vendor costs, preventing fines, protecting reviews, and optimizing pricing.
Why is my gross revenue high, but I’m not seeing profit?
Usually because of vendor overcharges, underpriced peak dates, surprise HOA or township deductions, or owner burnout leading to delayed responses.
Can I improve net ROI without raising guest prices?
Yes. Use smarter pricing tools, choose low-maintenance amenities, build in-house teams, invest in preventative upkeep, and plan for winter utilities and snow removal.
How does seasonality affect ROI in the Poconos?
Summer and winter generate 60 to 70 percent of bookings. Spring and late fall are slower. Smart owners set reserves and adjust pricing.
What unexpected costs hurt ROI for Poconos STRs?
Real examples include $1,200 electric bills during freezes, $600 HOA guest registration fees, $2,000 well repairs with out-of-state pricing, and $1,200 guest-driven pest issues.
Should I use gross ROI or net ROI when evaluating a deal?
Use both. Gross ROI shows potential, but net ROI is the number that determines profitability and long-term sustainability.
About the Author
Jeremiah Noll is the founder of Galvanized Management, a fully licensed property management brokerage based in the Poconos. A former math teacher turned real estate investor, he built his company from firsthand experience managing rentals, flips, and township compliance. Today, Galvanized Management oversees more than 175 short-term and long-term rentals with a trusted in-house team.
Reviews & Testimonials
We manage short and long-term rentals across the Poconos and help owners protect ROI, stay compliant, and improve guest experience. Read more client testimonials.
"Great crew and staff . They are local to poconos and knowledgeable in all aspects of Short term and Long term rentals . Highly recommend them for a complete Hands-off operations. Jeremiah & his crew bring a lot of value to the table in making sure the properties are well taken care of!"
-Eclectic Vacation Rentals
"They have been managing my properties for over a year and everything is running smoothly. The team is great."
-Alan Reed
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