How to Price your Vacation Rental by Owner
Posted: February 4, 2008, 9:55 PM ET
Pricing yourvacation rental by owneris one of the first steps you need to take to be successful. If you are too low, you will be full but lose out on some income. Too high and you could miss out on bookings and have a vacant unit. So what are you to do?
If you are new to this market or your unit is just being listed for rent and you have no repeat business, we suggest you come into the market on the lower end. That does not mean you are giving your unit away. You have to do some research of your competition.
Let's go through this as an example. Say you have a 3 bedroom condo by the beach. There will be plenty of your neighbors' listings to view. So finding a unit that is similar online should not be a problem. So let's assume you find plenty of comps, they are priced at about $1500 to $1700 during the peak season. They seem to be doing pretty well. You can view the online calendars to see how they are booked up. But do not rely on those 100%. Many owners do not keep them up to date.
So this is the first year for your unit. You have a few months till summer and you have no repeat business as this is a new purchase for you. I would price your unit at $1495 for the peak weeks. This will look like a deal to most prospects, you can start taking bookings now and build up a client list.
If you are doing the proper amount of advertising, you should have no trouble getting some business. Here are some other things you need to consider to get a competitive advantage on your competition. By using theivacationonline.comonline vacation rental software,you already have an advantage in the vacation rental by owner world. You are takingonline reservationswith credit card processing and your competition is not. So you will be able to take bookings faster and easier than the other condos listed online.
This means you are the path of least resistance. More people will be attracted to book with you since it is easy, fast and convenient. Who wants to want 7-10 days to mail documents back and forth? They want to book a vacation now!
Add this to a greatslide show of your condo,a map showing the exact locationand now you are out working the competition in your complex. So now you go into your next season with a list of past guest, you email them about the new season and they want to come back to stay with you since it was easy, they loved your condo and you stayed in touch. Now you can raise your prices to at or above the market. Now I would be at $1695 per week in the prime time.
This is a concept that you have to understand. Doing all the right things can really lead to more bookings at better prices. But I would enter the market at or below the market, and then work your way up the nest season. Being booked all year at reasonable prices is better than being half full at higher prices.
Using all the tools that you need can make a huge difference. If your competition does not put the time in that you do, you will win. Does your competition offeronline booking?Does your competition have a slide show with 100 pictures? Does your competitiontake credit cards online?If you do all of these things, you will get more booking than they will and then you can start to raise your prices to maximize your income.
The little things do make a difference. The faster you can "cut to the chase" and show the prospect what they want to see in your slide show, and youtake credit cards onlineforyour vacation rental by owner,you will just win! Here are a few sites that are doing a great job in pricing, slide shows and takingonline reservationsfor theirvacation rental by owner:
This is a nice duplex in Gulf Shores AL. He has online booking, a slide show and a map. It is easy to book and he does a great job.
This is a pet friendly cabin in Gatlinburg. With more tools than the competition, he stays booked year round.
This is my vacation rental house in Destin Florida. I use online bookings, slides show, maps and I email my guest from previous years to stay about 95% booked all year.
So put your complete business plan together, make sure to advertise properly, have a slide show, take credit cards online with yourivacationonline.comonline reservation systemand watch the business pour in. Then look to raise your prices for maximum vacation rental income.
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