There are several important Airbnb pricing strategies and ideas that you must not overlook if you want to be successful in the new share economy with an Airbnb listing. You want your pricing to be competitive but also lucrative. It does no good to price your listing at the market rate if your upkeep costs are higher. Before you can properly strategize your ultimate price, consider several factors that affect your investment’s price.
The Home Itself
If you own a home or apartment, you are familiar with paying rent or mortgage, along with taxes. These are crucial factors to consider at the beginning of any pricing strategy. Your goal is to make a profit off your investment, not lose money each month. By analyzing the base-level costs for either renting or paying your mortgage, you can begin to form a foundation of how much to charge per night. Over months and years, you will start to see patterns, learning which months require lower charges to meet your minimum and which months allow for higher charges due to an influx of travelers.
Don’t Forget The Bills!
Mortgage payments and rental costs are not the only fees involved with owning an investment property – there are also the bills. Light bills, water bills, sewage fees, trash pickup – all of these must ultimately be paid by your Airbnb guests; otherwise, they fall on you. You do not want to lose out on a rental month because you forgot to factor in heating or air-conditioning charges. Part of your pricing strategy should include looking ahead at the weather to estimate electrical or water fees. Charging for high likelihood usage is common among Airbnb owners as it ensures that their utility bills are covered each month without losing revenue during renters’ stays.
Your Time Is Money
Many Airbnb hosts forget that their time is also valuable. It takes time to book, confirm reservations, process payments, prepare rooms, particular requirements like business travelers, and clean up after guests leave. Including booking and cleaning fees is essential for a successful Airbnb investment. Remember to value your time! Typically, these fees range from 2-4% and are considered booking fees. Always pay yourself to avoid losing time that could be spent on more productive purposes.
With these three tips as a foundation, you can start to formulate a winning pricing strategy for your Airbnb listing and make your home the place of choice for savvy travelers. If you are still confused, come talk to us. We are Kozyguru, a professional Airbnb property management company.