Short Term Rental Pricing

[Steve Nafziger]

Hey everyone! I need some insights on how you price your vacation rentals. I am looking in the Blue Ridge Georgia area and for my formulas I find my average nightly prices based on other similar airbnbs in the vicinity figured at about 60% occupancy to be conservative, but can't seem to figure out how to price each week or month accordingly. Any tips for a rookie?

[Alex S.]

What formulas are you using?

I'm not sure I understand the question.  Are you asking about length of stay discounts?  Like, how much to discount for week-long or month-long stays?

[Steve Nafziger]

Originally posted by @Alex S.:

What formulas are you using?

I'm not sure I understand the question.  Are you asking about length of stay discounts?  Like, how much to discount for week-long or month-long stays?

 Not necessarily, I'm trying to figure out if people just use the average nightly price for every day of the year or if the nightly rate fluctuates in different parts of the year, which I think is the case, and if so how you determine the nightly price for each time of year..hopefully that makes more sense. 

[Alex S.]

Oh ok.  Like most of what I type on here..."it depends."

My STRs have all been in suburban metro markets (i.e. not vacation hotspot rentals).  I have to price Fri/Sat nights 25% higher than other nights.  If I don't, all my weekends will book immediately and I'll struggle to fill the Sun-Thurs nights in between.  If I jack up the Fri/Sat night prices, it slows down the "weekenders" and other people will book 4-5 night stays.  I maintain ~82% occupancy in the winter and ~94% in summer.

With that said, I don't know if the philosophy is exactly the same in the vacation markets...especially in places where the minimum stay is 5 nights or more.

In any case, you definitely should not price all nights the same all year.

[Joao Antonio]

Hi, you could use Airdna to see what others are pricing their properties in the area or you could use a spricing tool like PriceLabs which adjusts the price according to demand as well as any events, special holiday dates etc

[Bruce Woodruff]

Originally posted by @Steve Nafziger:

Hey everyone! I need some insights on how you price your vacation rentals. I am looking in the Blue Ridge Georgia area and for my formulas I find my average nightly prices based on other similar airbnbs in the vicinity figured at about 60% occupancy to be conservative, but can't seem to figure out how to price each week or month accordingly. Any tips for a rookie?

Hi Steve - When I started up about a year ago, I went to AIRBnB and VRBO and searched my arse off to find similar houses in similar parts of town. Then searched different months to see how they set their prices.....of course it varied, but gave me a good solid look at the reality of my market. As I've said before, I don't trust a program/algorithm to decide my business pricing....never have done that with any of the many businesses I've owned and never will.

As @Alex S said, I vary my pricing depending on the season and which events are going on. Obviously when it's going to be packed in town, I can raise rates easily. This part is kind of a guess on your part....but you can always change it.

[John Underwood]

Use the enemy method.

[Bob Wilson]

Originally posted by @John Underwood:

Use the enemy method.

What’s that? 

[John Underwood]

Originally posted by @Bob Wilson:

Originally posted by @John Underwood:

Use the enemy method.

What’s that? 

Manually check your competition to see prevailing rates.

[Tony Gunter]

@Steve Nafziger

Old fashion market research can go a long way.

AirDNA is supposed to be very helpful on this regard as well.

[Paul Sandhu]

I'm the only STR in my market. A motel room with 2 beds is $400/week. I charge $600 for a 3 bedroom house. My tenants get a per diem which covers their food and lodging expenses.

[Bruce Woodruff]

Originally posted by @John Underwood:

Originally posted by @Bob Wilson:

Originally posted by @John Underwood:

Use the enemy method.

What’s that? 

Manually check your competition to see prevailing rates.

Thank you, John...! Will they never learn?

[Karl McGarvey]

@Steve Nafziger use pricelabs or beyondpricing. Each have free trials to get you started that allow you to see other rentals in your area and recommend pricing for you based off of settings you input.

[Jimmy Woodard]

@Steve Nafziger pre-acquisition, cross-reference tools like Airdna and Rabbu for a good idea of pricing. Post-acquisition, look into Wheelhouse, Price Labs, and Beyond Pricing instead of trying to update pricing on your own. You're leaving money on the table by not utilizing a pricing tool.

[Victor Baquero]

Originally posted by @Jimmy Woodard:

@Steve Nafziger pre-acquisition, cross-reference tools like Airdna and Rabbu for a good idea of pricing. Post-acquisition, look into Wheelhouse, Price Labs, and Beyond Pricing instead of trying to update pricing on your own. You're leaving money on the table by not utilizing a pricing tool.

Do you have a preference among the 3 pricing sites? WH, PL and BP?

[Stan Santini]

Quote from @Victor Baquero:

Originally posted by @Jimmy Woodard:

@Steve Nafziger pre-acquisition, cross-reference tools like Airdna and Rabbu for a good idea of pricing. Post-acquisition, look into Wheelhouse, Price Labs, and Beyond Pricing instead of trying to update pricing on your own. You're leaving money on the table by not utilizing a pricing tool.

Do you have a preference among the 3 pricing sites? WH, PL and BP?

Did you ever get the answer? I am starting my 1st STR this month.

[Victor Baquero]

Quote from @Stan Santini:

Quote from @Victor Baquero:

Originally posted by @Jimmy Woodard:

@Steve Nafziger pre-acquisition, cross-reference tools like Airdna and Rabbu for a good idea of pricing. Post-acquisition, look into Wheelhouse, Price Labs, and Beyond Pricing instead of trying to update pricing on your own. You're leaving money on the table by not utilizing a pricing tool.

Do you have a preference among the 3 pricing sites? WH, PL and BP?

Did you ever get the answer? I am starting my 1st STR this month.

 No answer. However, I currently use PriceLabs and have 3 STRs. It's been invaluable.

[Stan Santini]

Quote from @Victor Baquero:

Quote from @Stan Santini:

Quote from @Victor Baquero:

Originally posted by @Jimmy Woodard:

@Steve Nafziger pre-acquisition, cross-reference tools like Airdna and Rabbu for a good idea of pricing. Post-acquisition, look into Wheelhouse, Price Labs, and Beyond Pricing instead of trying to update pricing on your own. You're leaving money on the table by not utilizing a pricing tool.

Do you have a preference among the 3 pricing sites? WH, PL and BP?

Did you ever get the answer? I am starting my 1st STR this month.

 No answer. However, I currently use PriceLabs and have 3 STRs. It's been invaluable.

 Is at easier or harder than you thought? You get calls or messages on middle of the night you have to reply to right away? 

[Victor Baquero]

Quote from @Stan Santini:

Quote from @Victor Baquero:

Quote from @Stan Santini:

Quote from @Victor Baquero:

Originally posted by @Jimmy Woodard:

@Steve Nafziger pre-acquisition, cross-reference tools like Airdna and Rabbu for a good idea of pricing. Post-acquisition, look into Wheelhouse, Price Labs, and Beyond Pricing instead of trying to update pricing on your own. You're leaving money on the table by not utilizing a pricing tool.

Do you have a preference among the 3 pricing sites? WH, PL and BP?

Did you ever get the answer? I am starting my 1st STR this month.

 No answer. However, I currently use PriceLabs and have 3 STRs. It's been invaluable.

 Is at easier or harder than you thought? You get calls or messages on middle of the night you have to reply to right away? 

 Easier. We use Hospitable to automate a number of the messages. We do our own hosting and we are both full time processionals in busy careers - teaching and medicine. Also, having a well put together check in guide with videos on how to use the hot tub or shower, etc that guests receive ahead of time helps answer most of their questions. 

[Eliott Elias]

I analyze my airbnb's with 50% occupancy and lower than airdna nightly projections. If it still cash flows i'll buy it