Setting the rates for your vacation rental can be tricky. Set your rates too high and you may lose travelers to your competition. Set them too low and travelers may abuse your home as a cheap rental. In this post I’ve included some helpful tips to help you set your rates just right so that you can get the most out of your listing.
Check out the competition
A great place to start when setting your rates is to check out your competition. Compare your property to similar rentals in the area making note of their size, amenities and proximity to attractions such as the beach or an amusement park. Take a look at what these owners are charging for nightly, weekly and monthly rates as well as taxes, fees and security deposits. You may also want to note which dates these owners mark as the high and low seasons; and take a look at their availability calendars to get an idea of how many days they book and how far out they book.
Know your expenses
You will also need to estimate your expenses so that you can calculate what you will need to charge and how many days you will need to be booked in order to make a profit. Expenses include your mortgage, taxes, the cost of routine repairs and renovations as well as emergency repairs, utilities, landscaping and insurance. Your expenses may also include permits or licenses, legal and/or accounting expenses, cleaning services, management services, supplies for amenities (such as a pool), advertising and transaction costs and of course, your time.
What will you charge for extra fees?
It is common for owners to pass along some of these expenses such as taxes, cleaning fees, and sometimes utilities directly to renters. FlipKey has specific fields where you can enter your rates for taxes and cleaning fees. You are also able to add custom fees if you would like to charge for other costs. For example, you may want to include a fee for air conditioning or pool heating because these will add to the cost of your utilities. Additionally, FlipKey has fields where you can enter an additional guest fees and a pet fee if you would like to do so to cover the additional utilities and wear and tear on your home.
Once you have entered all of your rates and fees under the, “Rates,” section of your listing, you are able to set your damage coverage under the, “Policies,” section. You may choose to collect a refundable damage deposit, which typically ranges from $200-$500. If you are renting a more high-end property you may want to consider selecting damage insurance instead. This allows you to insure your home for up to $1000, $3000 or $5000 worth of damage and only requires the renter to pay a small fee.
Give a weekly discount
When setting your rates, it is common to set the weekly rate as the nightly rate multiplied by 5 or 6. This encourages travelers to book a full week because they will receive a slight discount. It is also common to charge slightly more for weekend nights. FlipKey allows you to specify a weekend night rate and you can also select exactly which nights you would like this rate to apply. It is wise to enter nightly, weekly and monthly rate as well as seasonal rates for the upcoming year. Travelers can search for homes on FlipKey a variety of different ways, and having all of these filled in will best allow travelers to compare the value of your home to others.