3. competitive pricing
Figuring out the best nightly price for your rental is not easy in the beginning, but competitive pricing is key to a listing that attracts reservations.
Pricing is important, as it affects your volume as well as the perceived value of your property. Research short-term rentals with similar characteristics in your area (number of bedrooms, bathrooms, condition, size, location, floor, furnishings, amenities, access to outdoors or parking, etc.) to determine an average nightly price in your neighborhood.
Many short-term rental sites like Airbnb provide an average price per night. Keep in mind that prices may change seasonally and adjust accordingly. Be realistic and honest.
Smart pricing
Smart pricing is pricing that matches demand according to each site. Airbnb offers its own smart pricing, but free sites like EliotAndMe, BeyondPricing, and paid sites like AirDNA also offer this service. We look at suggestions from Airbnb and several other sites and manually set our prices accordingly. Smart pricing will usually let you set a high and low price. Start with what you feel comfortable and re-evaluate weekly until you have your own pricing method.
Charging for extras
Many sites allow hosts to charge separately for cleaning, extra guests, parking, etc. See what hosts around you are charging for and what they provide for free.
A note on charging for cleaning: cleanliness is key to building your Airbnb business. It takes a leap of faith for someone new to short-term rentals to stay in a stranger’s house and trust that it will be as clean as a hotel room. At the same time, repeat short-term guests are coming to expect a high level of cleanliness from hosts.
The bottom line is that cleanliness can make or break your business. You can have a gorgeous home, be an amazing host, provide all the amenities, but if your space is not clean, you will never succeed as a host.
Guests have come to expect a reasonable cleaning fee. However, if you are charging a fee to clean, no matter how small and even if you are doing the cleaning yourself, you must make sure your space is spotless.
Length of stay discounts
Most short-term rental sites allow you to offer discounts for longer stays. You may or may not want to offer a discount.
In summary, longer stays require less work, but take a heavier toll on your property and furniture, and guests tend to be more demanding because they’ve spent more time to find things to complain about. They may also need more equipment than a guest on a shorter stay. Additionally, we like to give them a free weekly cleaning and linen change in order to ensure that our units are kept clean and well maintained.
Busy months may not be self-evident. We live in Washington D.C. and knew that March and April would be busy months because of the Cherry Blossom Festival, and assumed that winter months would be slow. However, we had no idea that July was a pretty slow month, and that October would consistently be our busiest month of the year.
Make sure you research when tourists and business travelers visit your area and adjust your pricing accordingly.
We have found that each season has a distinct “sweet spot” in terms of pricing.
Checking out the competition
Before you list your rental, check out the competition. Run a search as a potential guest and see what comes up in your city and neighborhood. Pick the units that are most like yours, taking into account
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Location
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Size
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Number of bedrooms
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Number of bathrooms
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General condition
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Proximity to transportation
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Parking
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Outdoor area
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Amenities
Find five to 10 comparable listings and look at their photos, their listing details, and their reviews. Do they charge separately for cleaning? Do they require a security deposit?
There is a lot you can learn from reviews of other hosts. What little extras do they offer that guests appreciate enough to mention in a review? How can you go a little further?
To attract more guests and start building up good reviews, charge 10% less than your target price for the first 10-15 guests. You may also want to waive the cleaning charge for the first few guests.