Some Mistakes to Avoid When Pricing Your Home

    common vacation rental rates mistakesSetting your rates is definitely a grayer area of vacation renting, but it’s also one of the most important. Set a price that’s too high or too low, and you might be alienating potential renters without even knowing it. The good news is you can alter your price as needed. Use this light-hearted take on common pricing mistakes to help set you right when setting rates.

    1. Too high. 650 Sq. Ft. 1-Bedroom Apartment in Gun Barrel, TX: $9600/week.

    The fact is, we know you love your vacation home, and it probably holds a lot of priceless memories for you and your family. While it might be difficult for you to put a (reasonable) price tag on your little piece of paradise, the travelers coming to your area won't find it difficult once they compare it to other nearby properties. You might be thinking your rates are fair for all the wonderful memories they'll build, but realize your travelers might just move on to the next listing.

    Just like with your text and photos, you should advertise rates that set the tone for your home. High rates could translate into high expectations, and you could be setting yourself up for guest complaints and disappointment, or turning renters away completely. The fix: be sure to consider the size, location and amenities of other rentals in your area to help you set fair rates. Do your research to stay competitive, but don't price yourself out of the market.

    2. Too low. 3-bedroom home with ocean views for $49/night.

    What a steal? Think again. When a home is priced unusually low, a traveler is likely to assume there is something wrong with it. Not every traveler is looking for the deal of a lifetime, especially if he or she thinks it might mean sacrificing their health, safety, or first-born.

    3. Too confusing. 3-night minimum except the 2nd week of every month with 31 days.

    Last names beginning A-M, deposit = your age * number of people in your party. Last names beginning with N-Z, deposit = 12.3489% of total rental rate. The bottom line: keep it simple and straightforward. Set rates for specific dates, outline all fees, and stay organized. It will help streamline your processes (and keep your renters from questioning your sanity).

    4. Too restrictive. 1-Bedroom Condo: Minimum Off-Season Rental 7 nights, $500/night.

    Sure, I love spending my tropical getaway at an empty beach in 40 degree weather just as much as the next guy. But, it doesn't mean I want to do it for 7 days and pay $3500. Consider lowering your minimum stays and rental rates in the off-season for those renters looking for a quick getaway at a reasonable price.

    5. Excessive deposit or fees. Rental Rate: $2000, Security Deposit: $2000, Cleaning Fee: $500.

    What is this, the Taj Mahal? Most owners charge around $500 or 10% of their rental rate for a deposit, and anywhere from $150 to $300 for cleaning fees, depending on the size of the home. If you truly feel your home deserves a higher deposit or cleaning fee, be aware that this could turn away potential guests.

    6. Nickel & Diming. $69/night plus per person fees, utility fees, amenity fees and toilet paper fees.

    When it comes to setting rates, renters appreciate a “no-surprises” approach. If you catch a traveler’s eye with your enticing rate but tack on a bunch of extra fees, chances are your potential guests will continue their search for accommodations elsewhere (and stock up on Charmin before departing). Tip: try bundling some of these fees into your rental rates so as not to scare away fee-averse travelers.

    7. Lowering too quickly. My rate is $2500 for Thanksgiving week, but since it's already March, I'll take $700.

    Don't slash your prices for every Joe Renter that wants an outrageous deal. Before you jump into a booking and practically give your home away, be sure to evaluate the likelihood of receiving another booking for those dates. If it's in the peak season, you should probably try to hold out. If not, try reiterating your home's amenities and overall value before you accept an insulting offer.

    It’s true that setting your rates can be a sensitive process requiring a significant amount of careful calibration. However, if you take a calculated approach and avoid the pitfalls mentioned here you will likely be extremely successful when creating your own.
    *Last Updated April 11, 2018

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