Secrets to Maximizing Profit with Vacation Rental Pricing Strategies
The vacation rental market has seen considerable growth in the last few years and shows no signs of slowing. In fact, it is expected to expand by another $57 billion between 2023 and 2028.
Managing vacation rentals requires a lot of work and some basic knowledge of pricing. Listing it too low means you are losing out on potential income; too high and you run the risk of it going vacant, which earns you nothing.
This article covers some basic vacation rental pricing strategies. It will help you strike the right balance, so you can remain competitive while maximizing profits.
Start With Your Overhead
Before jumping into rental property pricing, a good place to start is a tally of your anticipated expenses. This will give you an idea of the least amount you need to make to cover costs, as well as potential income.
Your budget should include everything from maintenance and upkeep to taxes, insurance, utilities, landscaping, and housekeeping. It should also consider funds for regular repairs. Also, estimate marketing expenses for advertising the property.
Compare Rentals in the Area
The next step is to investigate what comparable properties charge in your area. Look at square footage but also amenities, like swimming pools and gyms.
Also, consider proximity to attractions. These include dining, shopping, nightlife, and recreation. A property located on or near the ocean or a golf course should reflect this in the pricing.
Consider Seasonal Markets
One of the most important vacation rental pricing strategies is to assess the seasonal attractiveness of a property. When demand is highest in your area, adjust your pricing accordingly.
The reverse is also true. In slower seasons, drop your price to attract prospective vacationers.
Beyond times of year when people typically vacation--such as summer, spring, or winter breaks--look at local event calendars. If there are major festivals, concerts, athletic events, or other activities going on during a particular weekend, then capitalize on the likely spike in demand for rentals.
Give Discounts for Longer Stays
Especially during high-demand times of the year, a lot of property owners will require a minimum night's stay. This can help cut down on overhead related to cleaning, and it is better for filling the dates.
However, you can also do the opposite: incentivize longer stays by giving discounts. This can be particularly effective during slower seasons. For instance, someone coming from out of town for an event may turn a short stay into a long weekend if they get lower vacation rental rates.
Leverage Professional Expertise
One of the easiest yet most effective things you can do to set appropriate vacation rental pricing is to hire a professional. Vacation property management experts will have their finger on the pulse of local rental market trends. They will also have experience formulating long- and short-term rental pricing plans.
Learn More About Vacation Rental Pricing Strategies
Now that you know some vacation rental pricing strategies for maximizing profit, you can proceed with confidence. At the right price point, your property will stay rented while maximizing profit.
PMI Gulf Coast is a full-service real estate asset management company. We offer a range of services, including marketing, property management, and more. Contact us today to learn more.
