Setting a Price for Your Vacation RentalPosted by: Admin
Picking the right price for a vacation rental is a difficult task for many rental property owners. While you want to make money off of your rental, you also don’t want to make the rental price so high that it will discourage renters from even looking into your property. Establishing the value of your rental home in its market and setting the right price takes some research and planning.
Before pricing your rental, determine what your “break-even” point for the property will be. This means that you need to figure out how many weeks you need to rent your property per year to cover all of the expenses of owning the property. This number will be different for everyone, but is a great starting point. You can try to make this break-even figure during the peak weeks, and then start turning a profit by renting out the property during non-peak weeks.
The price you set for your vacation rental property should be competitive and fair within your market. Look at other rental properties located near yours to get a good idea of what rates are acceptable. Compare amenities, location, property size and features of other rental properties to your property to determine what a good rental price would be. If you end up pricing your property above what others in the area are asking, be sure to thoroughly describe what makes your property so valuable in the description so that renters can understand the pricing.
You will also most likely have different prices for peak and non-peak weeks. In general, you can charge more for peak weeks than you do for non-peak weeks. A common strategy is to make the price for 2 non-peak weeks equal to the price of one peak week, giving your renters a 50% discount during non-peak travel weeks. Price breakdowns also allow renters to see the value in staying at your property longer. Advertise the nightly rate at your property at 1/5th or 1/6th of the weekly rate, offering an incentive for travelers to book the whole week in order to get a better price.