2 Oct 2019
You put a lot of work into your vacation rental, so it’s imperative you also figure out the right pricing for it so that you actually make money. The right rates can increase your vacation rental’s success, and they can make or break whether your property consistently gets booked. If you need help figuring out how to price your vacation rental property, check out these different tips and steps you should take.
Figure out the fixed and variable costs
Before you think about the other factors that come into play in order to determine property prices, you need to know your fixed costs. What does it cost to run your rental? The foundation to calculate any rate starts with covering your expenses. Make a list of the fixed costs, such as the mortgage, taxes, homeowners insurance, and salaries for any services or managers. Then, make a list of the different variable costs such as the different utilities, guests supplies, and property repairs.
Research your competition
Once you’ve sorted out the fixed prices, you have to take the time to research your competition and see what prices they offer. Your nearby competition has a big influence on the different vacation rental prices you should have. Look at how expensive hotels are nearby, and then, look at sites like AirBnB and VRBO to see what properties similar to yours offer. Pay attention to what others do with their pricing—it can help you figure out your own, and it’s one of the easiest ways to get a good estimate for what your nightly pricing should be.
Know your goals
It’s probably the same across the board—make some extra money. That can become difficult if you decide to be the most expensive place in the area just to out-price your competitors. If there aren’t many properties in the area and comparable properties go for $150 a night, however, your chances of getting booked diminish quickly. To really make money, you need to think about your pricing less as a competition and more as a marathon. Lower rates will generate more revenue overtime than higher rates.
Decide on extra fees
Another aspect you should think about is whether or not you plan to charge extra fees. It’s a heavy debate among rental owners, and for some it can work out in their favor. These fees can include things such as cleaning, parking, checking/booking fees, and laundry fees. If you set your booking rate low, then you can justify these extra costs, but if you already have a highly priced rental, then extra fees may hurt your property’s success.
Try out an automated pricing engine
One of our top tips on how to price your vacation rental property is to use automated pricing engines. These are incredibly beneficial for rental owners—especially first-timers. Options like Everbooked, Beyond Pricing, and Smart Host can show different listing, market data, and more to help you figure out how to price out your rental.
Know your worth
Finally, know your potential! Understand everything your property can offer to guests and showcase that. If you think your beautiful backyard patio warrants a higher price, do that—just make sure to keep it reasonable. If you’ve gotten enough bookings and positive reviews, then you could take the opportunity to raise your prices. You’ll still get bookings if you raise your prices a bit after plenty of positive reviews and solid bookings.
If you require any help running your vacation property, look to Exceptional Stays. As one of the top property management companies in Telluride and around the world, you’re sure to get a lot out of working with us. Reach out to us now!