How do people react to your STR pricing?

Question

I've got a 14 unit residential apartment complex with a billboard out front.  "Furnished apartments, all bills paid, weekly rate".  I get calls from people that are looking for a LTR, and that's what they think these are.  I tell them $500 a week.

Sometimes the line goes dead.

Sometimes they ask me if I'm high or what I'm smoking.

Sometimes they say "You are rolling in the dough, now I understand what your places are for."

Today someone called me with their phone on speaker.  I said $500.  I heard someone in the background say "Oh my God!"

Dan Thomas · Answer

@Carolyn Fuller

Same thing happened to me. I allowed airbnb to adjust my rates closer to the stay to get last minute bookings. I let a lady and her 3 dogs stay for half the nightly rate and she gave me a 4.....for value.... she got a lake house for $99 a night. I have been consistently a 5 star stay at full price. I think we need to remember our target audience and if someone is shopping a bargain they won't be as happy as the guest who is willing to pay market rate for a great place. Honestly this guest would have been happier at a 3 star motel for the same money.

Lisa Graesser · Answer

I got a message through zillow today....."that is way to high" ..well then, please continue scrolling

Bruce Woodruff · Answer

@Paul Sandhu They're just not paying attention then...$500/7 = $71 per day. You're not going to find a hotel for that anywhere, with a kitchen and all...? Maybe emphasize the WEEKLY theme in large, bold letters.....

We are after a more touristy clientele than you are, so no one ever complains about pricing, they either book it or they don't... we raised prices by 10% for this year and no one seems to care...

Carolyn Fuller · Answer

I slashed my rates this winter and got my first 3 star rating on, of all things, value! I get straight 5 star ratings when I charge significantly more per night. Folks are nuts.

John Teachout · Answer

I've gotten all sorts of snarky responses from rental ads on Facebook. One commenter said he could tell from my ad that I was a slumlord (3/2 advertised for $1580.00) Most were guffawing the ridiculously high price I was asking but they're either clueless re the market or more likely can't afford the property. I just delete the comments and carry on. By the way the property rented for asking price and the tenants met all the criteria are grateful for the opportunity. There's all types of jealous, hateful and dumb people out there that need to seem important on social media. It's just part of what has to be dealt with nowadays...

Paul Sandhu · Answer

When I first started doing STRs to refinery contractors, there were probably 4-5 other people that were already doing the same thing.  I offered cable, wifi, linens, furniture, pots & pans, towels, soap, washer/dryer, etc all in a clean house.  The other people offered much much less and charged the same or more than me.  Example, you'd get a house with a fridge and stove but you'd have to buy inflatable matresses and wash your clothes at a laundromat.

Those 4-5 other people are out of the STR business now.  I'm the only one left.

Carolyn Fuller · Answer

YIKES!!! You have made me realize that I really should avoid lowering my rates in the future. I actually remember that this is a problem with LTRs, as well. Before we did a gut remodel we rented on the LTR market for a monthly rate that had never increased even when rent control was rescinded. Our monthly rent was probably one of the lowest in the city. The reason we switched to STR and extended stay after the remodeling was because we were unwilling to deal with tenants who HATED our unit but would not move. Even after the remodeling, we let someone stay in our guest room for FREE for 2 months. Before she had even moved in she began to complain about what we were not providing!

Much easier and more fulfilling to offer top quality for top price and be happy with the gratitude our guests and extended stay tenants express.

Carolyn Fuller · Answer

I suspect the problem is that those of us whose choices are restricted are more likely to complain no matter what. The fact is that choice is far more desirable than no choice even if we are handed the moon & the stars. When someone is paying top dollar for our units, they are very definitely not restricted in their choices. That translates into their being far more appreciative than those who are getting a bargain price.

Nick Rutkowski · Answer

@Paul Sandhu

When people react to my price I kindly tell them they are more than welcome to stay at the local “crack” hotel or motel 8. Then I proceed to tell them there was a police standoffs, drug addicts, fly by nighters, and people looking to hassle you at both of these places. For 20 dollars more you have your own place and no one bothering you. That normally works.

Tom Wagner · Answer

To me it comes down to supply and demand. How many other properties are available like yours, which is always changing for a specific date or weekend on the calendar, and how much demand is there for a property like yours?

In Denver where I'm helping operate an STR, the supply exceeds demand in the winter (thus causing prices to fall) but in the summer demand greatly exceeds supply (resulting in some nights where we can get $225/night for a studio).