As in any business, setting the rates for renting a property can be a challenge.
If you set a price too high, you may not receive any requests or cause your potential customers to have higher expectations regarding the property you make available.
If you set a price too low, you may not make a profit or you will only attract people who will not carefully treat the property you make available.
How do you find the balance? Here’s a four-step guide to setting the right price for your property.
Step 1: Analyze your costs
External factors matter in determining the right price, but the most important thing is to think about yourself. What is the minimum you can accept to go to zero?
Even if you have regular customers, you may not have the weekly occupied property.
Calculate all the costs involved in renting your property, then calculate how many weeks you can rent it.
If you are not in a particularly popular area, you may face losses in the first two years.
Step 2: Know your competition
Once you have done all the calculations, you need to realize what the price is that you can ask considering the typical rates for the area you are in.
To make it easier for you, we leave below your average nightly rates in a few areas.
Step 3: Identify strengths and weaknesses
As you gather information about your competitors, consider the following details:
Which are the peak of the season and the off-season for them
What are their rates depending on the time of year
What offers do you promote and how do you change the rates according to them?
It is possible that the peak season and the local extra-season can significantly influence you – although you want to attract a certain audience, it is still worth considering these periods.
Step 4: Be objective
You have set different rates depending on the season and the length of the rental period. How do they compare to the prices of your competition?
If your rates are higher than those of your competitors, would you say that the facilities you provide justify the price difference?
If the value is lower than that of your competitors, do you underestimate your property? What steps can you take to reduce the gap?
Often, when you compare your property, you happen to think you have more to offer or, on the contrary, you are tempted to believe that you are not below the market level. Before you inflate or underestimate the price of your property, ask for your opinion.