If you're the proud owner of a vacation rental but can't seem to attract enough guests, have you considered your pricing? This is probably the most important influencing factor on whether prospective clients will book with your rental or not.
But, maybe you already know that.
So how do you go about building vacation rental pricing strategies that not only work but pay real dividends? Learn more about the three foundational building blocks of a good pricing strategy, here.
1. Calculate Your Expenses
How do you know what to charge your guests if you're unsure of what it costs to run and maintain your vacation rental? Calculating your expenses is integral to vacation home pricing and whether it will cover your overheads (and more).
Make a comprehensive list of all your expenses, and don't forget to include a buffer for those unexpected costs included in maintaining a property (i.e. roof leaks, broken windows, etc.).
It's important to consider two main categories when it comes to your expenses. This includes your fixed costs (overheads that are the same every month), and variable costs (costs that change depending on usage, i.e. an electric or water bill).
It's also important to factor in maintenance tasks - whether that's a monthly, quarterly, or bi-annual cost. Once you have an in-depth overview of all your expenses, you can calculate the right type of pricing strategy.
2. Study the Local Rental Market
Next, it's super important to get a feel for the local rental market in your region. You must ensure your pricing is in tune with what other rentals charge in your area. Price too high, and this could drive away your clientele. Price too low, and your customers might wonder why it's so cheap.
Having an understanding of what your local competition charges for their rental will make it easier to price yours. It's vital that you know your location and know it well.
Take a look at how your rental compares to others, and the quality of the area/street/location it's in. Do some research on the number of rentals in your area and consider rental income strategies that are fair but competitive.
3. Adjust Your Pricing to Seasonality and Holidays
Don't pass up on the opportunity to adjust your pricing strategy according to seasonality and holidays. In fact, it's vital to your success. It's important to know your occupancy rates at different times throughout the year and price your rental accordingly.
As a general rule of thumb, remember that prices go up as the season becomes busier. They also tend to increase around specific holiday periods or big events, i.e. a popular band playing in your city/town. Prices then drop off as the season slows down.
One of the most important seasonal pricing techniques is to understand your busy and quiet periods and set your rates to match.
Vacation Rental Pricing Strategies Made Easy
Owning a vacation rental is a great way to make a passive stream of income that can really become profitable over time. But if you're stumped on mastering vacation rental pricing strategies, this is where a good property management team can help.
With PMI Property Management, based in Windham, we offer expertise on all things vacation rental management. We can assist with pricing, marketing, accounting, guest services, and so much more. Get in touch with us today and get your pricing strategy in tip-top shape!
