Pricing Your Vacation Rental Property
One of the first steps in launching your vacation rental business is to know how to price them. You can’t be too low – you’ll just lose out on some income. You can’t be too high either as that will just have potential customers opt for other properties instead. So how do you know the right balance between the two? How do you price your vacation rental property?
If you are just getting started, we suggest that you come in on the lower end. That doesn’t necessarily mean simply giving your unit away. Rather, it’s knowing your competition and taking it from there. For instance, you have a property of three bedrooms by the beach. What we suggest is you look for a property that’s similar (which should be very easy online). Browse through a few. You may have to contact the hosts to make sure the prices online are updated. On the first year of your unit, it’s right to price yours about 5-10% cheaper than theirs. Most prospects will be interested in your unit as it lets them save more money, and you will be on your way to building up your client list.
For starters, of course, it’s also a good idea to invest in advertising. You need to be able to compete against those who are at par with you. You can use vacation rental software online that will give you the advantage of being able to take payments through different portals (credit card, PayPal, etc) and at this point, you will have something over others. Booking with you, therefore, will pose as a faster and easier option. Basically, no one really wants to wait a week to wait for hotels’ responses. People these days want everything right away, which is why you should give them the option of booking a vacation with you ASAP. Do you want to respond to your guests in under an hour – 24 hours a day – 7 days a week? Give our Virtual Airbnb Homeaway Management Service a Try now for FREE for 7 days.
Another good idea is to add other options like slideshows of your condo plus a map of its exact location, that may also boost your rental’s chances. When you’ve already booked about 10-15 guests and have successfully taken care of them, received your hopefully 5 star reviews, make sure to keep in touch with them. Emailing them during new seasons and inviting them to come back and stay with you should be easy, especially if you have made them love your place during their stay. At this point, you can afford to raise your price – at par or at this point, 5-10% higher than the market.
What you have to understand is pricing works very much hand in hand with doing the right things with your vacation rental. As long as you are able to maintain it and are able to keep your customers happy, you can do the formula of entering below the market, working your way at it, all the way to raising it in the next season. Always remember that being booked all year at reasonable prices beats being booked for only a few times at higher prices.
Competitive reviews of other rentals are always of great help. Try to use as many tools as you can and make your company as available and as accessible to the public as you can! Offer online booking. Add slideshows of your place online. Take different forms of payments. If you do all of this, you can work your way up to maximizing your income through pricing.
The truth is, the little things really do make a difference. It is best not to attempt to cut the chase and instead, work on this step by step. Because we assure you, with that, you’ll end up a winner.