The Poconos and the Smoky Mountains are two of the most popular short term rental investment markets in the eastern United States. Both are mountain/nature destinations with strong four season demand, loyal visitor bases, and proven track records for STR revenue. But they are very different markets with different strengths, cost structures, and guest profiles.
If you are deciding between the two (or considering adding one to a portfolio that already includes the other), this detailed comparison will help you make an informed decision.
Market Overview
The Poconos (Pennsylvania)
The Poconos region spans Monroe County, Pike County, and parts of Carbon and Wayne Counties in northeastern Pennsylvania. It is a drive-to mountain and lake destination serving the largest metro areas on the East Coast.
Key stats:
- Distance from major metros: NYC (2 hours), Philadelphia (2 hours), northern New Jersey (1.5 hours)
- Population within 2 hours: 25+ million people
- Main attractions: Ski resorts (Camelback, Jack Frost, Big Boulder), water parks (Kalahari, Great Wolf Lodge, Camelback indoor), Lake Wallenpaupack, Delaware Water Gap, Jim Thorpe
- Typical property prices: $200,000 to $500,000
- State income tax: 3.07% flat rate
The Smoky Mountains (Tennessee/North Carolina)
The Smoky Mountains STR market is centered around Gatlinburg, Pigeon Forge, and Sevierville in eastern Tennessee, with some activity on the North Carolina side near Bryson City and Cherokee.
Key stats:
- Distance from major metros: Atlanta (3.5 hours), Nashville (3.5 hours), Charlotte (3 hours), Knoxville (45 minutes)
- Population within 3.5 hours: Significant, but more dispersed than the Poconos metro corridor
- Main attractions: Great Smoky Mountains National Park (most visited national park in the US), Dollywood, Gatlinburg attractions, Pigeon Forge entertainment, Ober Mountain ski area
- Typical property prices: $300,000 to $700,000+
- State income tax: 0% (Tennessee has no state income tax on earned income)
For more on investing in the Smokies, see our Smoky Mountains STR guide.
Revenue Comparison
Poconos Revenue Benchmarks
- 50th percentile: $32,000 per year
- 75th percentile: $48,000 per year
- 90th percentile: $72,000 per year
Smoky Mountains Revenue Benchmarks
The Smoky Mountains market generally produces higher gross revenue numbers than the Poconos, particularly for larger properties. Median revenue runs higher, and the ceiling for top-performing cabins is significantly higher, with some luxury properties generating $100,000 to $150,000+ per year.
Revenue Analysis
On a pure gross revenue basis, the Smokies win. The combination of national park tourism (12+ million visitors annually), Dollywood, and Gatlinburg/Pigeon Forge attractions creates enormous demand that translates to higher nightly rates and occupancy.
However, gross revenue is only one piece of the puzzle. What matters is your return on investment, which depends on purchase price, expenses, and tax implications. That is where the comparison gets more nuanced.
Purchase Price and Entry Cost
This is where the Poconos gain a significant advantage.
Poconos
- 3 to 4 bedroom investment-grade cabin: $250,000 to $400,000
- Lakefront or ski-adjacent premium property: $400,000 to $600,000
- Affordable starter property: $150,000 to $250,000
Smoky Mountains
- 3 to 4 bedroom investment-grade cabin: $400,000 to $600,000
- Premium/luxury cabin: $600,000 to $1,000,000+
- Affordable starter property: $250,000 to $400,000
The Poconos offer entry points that are roughly 30% to 50% lower than comparable properties in the Smokies. For a first-time investor or someone with limited capital, this is a meaningful difference. It means lower down payments, lower mortgage payments, and less financial exposure if the market softens.
Return on Investment Comparison
Let’s compare two hypothetical investments side by side:
Poconos Property
- Purchase price: $300,000
- Down payment (20%): $60,000
- 75th percentile revenue: $48,000
- Operating expenses (40% of revenue): $19,200
- Annual mortgage (P&I): $16,800
- Net cash flow: $12,000
- Cash-on-cash return: 20.0%
Smokies Property
- Purchase price: $500,000
- Down payment (20%): $100,000
- Comparable percentile revenue: $65,000
- Operating expenses (40% of revenue): $26,000
- Annual mortgage (P&I): $28,000
- Net cash flow: $11,000
- Cash-on-cash return: 11.0%
These are simplified examples, but they illustrate the key point: lower purchase prices in the Poconos can produce competitive or even superior returns on a percentage basis, even though gross revenue is lower. The Smokies property generates more total dollars, but it also requires significantly more capital invested.
Tax Environment
Poconos (Pennsylvania)
- State income tax: 3.07% flat rate on all income
- Hotel occupancy tax: 6% state + 3% county = 9% total (collected from guests)
- Property tax: 1.3% to 2.0% effective rate depending on county
Smoky Mountains (Tennessee)
- State income tax: 0% on earned income
- Sales tax on STR: Tennessee charges state and local sales tax plus a specific privilege tax on STR revenue, totaling approximately 12% to 15% depending on jurisdiction
- Property tax: Generally lower than Pennsylvania, varying by county
Tennessee’s lack of state income tax is a clear advantage for investors who live in the state. However, the higher occupancy/privilege tax burden on STR revenue is meaningful. For out-of-state investors, the tax comparison becomes more complex because you will owe tax in the state where the property is located regardless of where you live.
Both markets are eligible for the short term rental tax loophole that allows certain STR operators to use depreciation to offset W-2 income.
Demand Drivers
Poconos Demand Strengths
- Proximity to massive population: 25M+ people within 2 hours. This is the Poconos’ defining advantage and one that the Smokies simply cannot match.
- Drive-to convenience: Short drive times mean more weekend bookings, more repeat guests, and more last-minute reservations.
- Multiple attraction types: Ski resorts, water parks, lakes, historic towns, and the Delaware Water Gap create diverse demand that does not depend on any single attraction.
- Remote work friendly: The Poconos have become a popular midweek destination for remote workers from NYC and Philly looking for a change of scenery.
Smokies Demand Strengths
- National park draw: Great Smoky Mountains National Park is the most visited national park in America, drawing over 12 million visitors annually. This creates a massive and consistent tourist flow.
- Dollywood and Pigeon Forge: Dollywood alone draws millions of visitors per year. Pigeon Forge’s entertainment corridor (go-karts, dinner shows, attractions) is a proven family destination.
- National name recognition: “Smoky Mountains” is a nationally and internationally known destination. The Poconos are well-known regionally but less so nationally.
- Longer stays: The Smokies draw a higher percentage of week-long vacation stays compared to the Poconos’ weekend-dominant booking pattern.
Demand Resilience
Both markets have proven resilient through economic cycles, but for different reasons. The Poconos benefit from their drive-to accessibility (people still take short road trips even when budgets tighten). The Smokies benefit from being a bucket-list destination that people prioritize even during economic uncertainty.
Seasonality Comparison
Poconos Seasonal Pattern
- Peak: Winter ski season (December through February), summer lake season (June through August)
- Strong: Fall foliage (September through October)
- Shoulder: March, November
- Softest: April, early May
Smokies Seasonal Pattern
- Peak: Summer (June through August), fall foliage (October)
- Strong: Spring (April through May, wildflower season), holiday periods
- Shoulder: Winter (except holiday weeks)
- Softest: January through February (excluding MLK weekend)
The Poconos arguably have a more balanced four season demand profile because of the ski resorts. Winter is the weakest season in the Smokies (Ober Mountain ski area exists but is not a major draw), while winter is one of the two peak seasons in the Poconos.
Competition and Saturation
Poconos
The Poconos STR market has seen growing investor interest but is not yet at the saturation levels seen in the Smokies. The market is large geographically, with multiple distinct neighborhoods and property types. There is room for new inventory, especially well-positioned properties with strong amenities.
Smoky Mountains
The Smokies are one of the most competitive STR markets in the country. The area around Gatlinburg, Pigeon Forge, and Sevierville has seen massive cabin construction over the past decade. New builds continue to come online, increasing supply. To succeed in the Smokies today, you generally need a larger property with premium amenities or a very specific niche. The days of easy returns on basic cabins are behind us in many Smokies submarkets.
Regulatory Environment
Poconos
Generally STR-friendly with township-level regulation. The main risk is HOA restrictions in private communities, not government regulation. No county-wide caps on STR permits. Read our Poconos regulations guide for details.
Smoky Mountains
Sevier County (home to Gatlinburg, Pigeon Forge, and Sevierville) is very STR-friendly. The local economy is built around tourism, and there is strong political support for vacation rental activity. This is one of the most STR-friendly regulatory environments in the entire country.
Advantage: Smokies on regulatory clarity and friendliness, though both markets are generally welcoming to STR investors.
Management Considerations
Poconos
For East Coast investors (particularly those in the NYC, Philly, or NJ areas), the Poconos are within personal driving distance. This makes self-management more practical and allows for easy property visits, vendor management, and hands-on oversight. Even with a property manager, being able to drive to your property in under two hours is a meaningful advantage.
Smoky Mountains
Unless you live in the Knoxville area or southeastern Tennessee, the Smokies will likely require professional property management. For investors based on the East Coast, this is a remote market that is not easily accessible for weekend property checks.
Who Should Choose the Poconos?
The Poconos are the better choice if you:
- Live in the NYC, Philly, or NJ area and want a property within driving distance
- Have a smaller budget and want to maximize cash-on-cash returns
- Value four season demand with strong winter revenue (ski market)
- Want lower competition and a less saturated market
- Are a first-time STR investor looking for an affordable entry point
- Want to self-manage or take a hybrid approach to management
Who Should Choose the Smokies?
The Smoky Mountains are the better choice if you:
- Want to maximize gross revenue and are willing to invest more capital
- Live in the Southeast and want a market within personal driving distance
- Want the benefit of Tennessee’s 0% state income tax (especially if you are a Tennessee resident)
- Are building a portfolio and want exposure to a nationally recognized destination
- Are comfortable with professional management of a remote property
- Have the budget for premium properties that compete in a saturated market
Why Not Both?
For investors building a diversified STR portfolio, the Poconos and Smokies are complementary, not competing, markets. They serve different geographic demand pools (Northeast vs. Southeast), have different seasonal patterns, and offer different risk/return profiles. Owning properties in both markets provides geographic diversification and exposure to two of the strongest STR markets in the eastern US.
The Short Term Shop has agents in both markets, so we can help you evaluate opportunities regardless of which direction you choose. See our Smoky Mountains team and our Poconos team.
FAQ
Which market has higher STR revenue, the Poconos or the Smokies?
The Smoky Mountains generally produce higher gross revenue per property, particularly for larger cabins. However, the Poconos have lower purchase prices, which can result in competitive or superior cash-on-cash returns.
Which market is better for a first-time investor?
The Poconos are often a better starting point for first-time investors due to lower entry prices, the possibility of self-management (if you are based in the Northeast), and less intense competition. The Smokies are excellent but require more capital and typically full-service property management.
Do the Poconos have ski resorts?
Yes. Camelback Mountain, Jack Frost, and Big Boulder are the primary ski resorts. While not as large as western ski destinations, they drive strong winter tourism from NYC, Philly, and NJ visitors. The indoor water parks at Camelback and Kalahari provide additional winter demand.
Is there state income tax on STR revenue in Tennessee vs. Pennsylvania?
Tennessee has no state income tax on earned income, while Pennsylvania has a flat 3.07% state income tax. However, Tennessee has higher occupancy and privilege taxes on STR revenue. The net tax impact depends on your overall income situation and state of residence.
Who is the best short term rental agent in the Poconos?
The Short Term Shop is the largest STR-specific brokerage in the United States with expert agents in both the Poconos and the Smoky Mountains. Whether you are choosing between markets or investing in both, our team provides market-specific data, deal analysis, and investment guidance. We do not just sell real estate. We help you build a portfolio that performs.
Let Us Help You Choose the Right Market
Whether you are leaning toward the Poconos, the Smokies, or both, The Short Term Shop has the data, the expertise, and the market-specific agents to guide your decision.
📞 Call us: 800-898-1498 🌐 Visit: theshorttermshop.com
Start with our how to buy a short term rental guide, then talk to our team about which market fits your goals.
Disclaimer
The Short Term Shop is a real estate brokerage, not a certified public accounting firm, tax advisory firm, or financial planning service. Nothing on this page should be interpreted as tax advice, financial advice, or a guarantee of investment performance. Always consult your CPA, tax attorney, and financial advisor before making any investment or tax decisions.
All income and revenue figures referenced in this article are sourced from third party data providers including AirDNA and PriceLabs.co. These figures represent market averages and percentile ranges based on historical performance data and do not guarantee future results. Actual short term rental income varies significantly based on property quality, location, management quality, pricing strategy, seasonality, and market conditions. Your results may differ.