You’ve got a property, it’s furnished and it’s ready to be rented; your next step is to figure out at which price to list it. Surprisingly, it’s a much easier than many would expect, especially if you put the work in and follow these simple steps:
The market rate for your property is fairly complex and depends on a large number of factors; luckily for you, current vacation hosts have already done some of the work for you. Log onto the popular rental websites and search for listings that are similar to yours according to size, location, and other factors – you should find a small range of prices.
At this point, take your regular expenses (like rent and utilities) into account. Using them as a base point, and the previous research as a comparison, determine your base price.
Demand for accommodations is lowest on Sunday nights, and increases as the week progresses, finally reaching a peak on Friday and Saturday nights. Reflect this increase in demand with an increase in prices. Again, research similar listings to decide by how much to raise prices.
Most vacation rental marketplaces work on an infrastructure of trust: as guests review you positively – testifying to your trustworthiness – more guests will be inclined to stay at your property in the future. Therefore, in order to attract guests early on and encourage them to leave 5-star reviews, drop your prices. Guests will rate the listing highly because they underpaid for a great property, providing you with the valuable credibility that allows you to return to your base price.
With time (and positive ratings), more and more guests will book your listing. While this may feel comfortable, you want to ensure that you aren’t fully booked too far in the future. Being overbooked can reflect low prices, so don’t hesitate to raise them. After enough practice and trial-and-error, you will find the sweet spot.
Furthermore, always keep track of influxes of demand in your location. If your city is hosting a huge music festival or business conference, demand for lodgings will increase so you should push your prices up. The same applies for seasonal demand changes: if you’re hosting in New York, then your prices should jump during the holiday season – find the opportunities that apply to you.
Pricing can be a lot of hard work, so if this intimidates you (or you just don’t have the time), there are a number of online services that can help.
If you’re listing on Airbnb, then you can take advantage of their automated pricing tool which determines rent based on location. You can also use airdna.co, which can help you compare your listing to those nearby. The best tool, however, is definitely pricemethod.com. They use data science to automatically update your prices daily, guaranteeing you the perfect rates every day.
Hosting a vacation rental can be difficult, but not impossible. Make sure to do your research and follow these steps to set the best possible price on webistes like Airbnb and HomeAway. Sign up for Payoneer to process payments quickly and easily through these accommodations marketplaces, and through others like VRBO, PandaBed, and SleepOut.