You don’t need us to tell you that setting rental rates is imperative to get right.
Make your rates too expensive and guests will go elsewhere. Undersell yourself and visitors may well question the quality of your property.
These are the most important aspects to consider when setting rental rates:
- Your running costs – mortgage, cleaning, laundry, utility bills, maintenance and community fees.
- What commands a higher rent – number of rooms, private pool, indoor pool, jacuzzi, sauna, balcony, views, air-con, private parking, distance to city centre or main attraction and tennis court.
- Compare similar-sized properties in your local area. Check out your local competition. Is the market busy? Of course it is up to you whether you want to undercut your competitors but carefully consider your worth. Not everyone is looking for the cheapest option. Never dramatically undercut your competitors as it could have a negative effect and highlight to potential guests that your place may not be worth it. If it’s not working in time, then you can reduce your rates.
- Flight availability – do airlines operate to your nearest airport year-round? Does frequency change out of peak season? Is there a choice of operators?
- Airport location – Are you within 90 minutes of your closest airport? Are there alternatives? Will your guests have to drive far?
- Know when your peak season is. For example, early July to the end of August for beach holidays and December to March for skiing trips.
- Know your lowest price – some people will attempt to haggle. Don’t let this annoy you and engage them in a friendly manner.
- Offer reductions for bookings of over 2 weeks.
- Will you be flexible with changeover dates? I would encourage you to be as you will definitely get the bookings in and not risk waiting for weekends. Bear in mind that many people will want to avail of cheaper mid-week flights.
- Will you have a minimum stay? I would suggest that anything less than 3 or 4 days is not worth it when your cleaning costs are taken away. Catering for mini-breaks is important but you can be stricter in peak seasons.
- If your property is new and it’s early in your rental business consider lowering your prices when setting rental rates butremember to add phrases like ‘Brand new apartment in…’
- Naming your seasons. Don’t use ambiguous terms like ‘Peak Season’ and instead favour terms like ‘Ski Season’ or ‘Summer’. Or why not push the boat out with phrases like ‘Get on the Pistes’ or ‘Beach time’? Be a bit different.
- Events can determine higher rates. See next section.
- Consider your utilities (heating, air-con) in your price. Remember consumption costs vary considerably according to weather and seasons.
- Will your rates be fully-inclusive? Will you include cleaning and any local taxes in your rates? We would recommend so as holiday-makers don’t want to be doing sums when weighing up their short-list.
- Will you include a welcome pack (basic provisions like milk, water, eggs, bread, water, orange juice, butter, jam, cereal)? In my experience most guests prefer to buy their own food so I offer it as an additional extra for €25. Personally I find that there is no significant benefit for this service to you for a lot of extra work (correspondence, shopping, travel and unpacking).
- Year-round appeal? This is possibly more applicable for weekend city break locations.
- Are you going to charge extra for pets and extra cleaning required? I would suggest not.
- Make use of special rates promotions on holiday rental booking portals (‘early bird’ or ‘late deals’). Keep them simple and don’t run a special too early as this may make you look a little bit desperate. A special could also include something free (e.g. wifi or ski lift passes) for a short time only.
- Keep your off-peak rates low. Whereas some owners may not bother chasing out-of-season bookings if there is not much profit to be made, others, myself included, would prefer occupancy for both security and minimising condensation or damp.
- Add shoulder seasons (in-between peak and off-peak) rates – These can really appeal to those not wanting to spend more on peak season flights and accommodation rates but who are flexible with time.
- Do you want to encourage off-peak long-term stays? Think about what you would accept (Half price? One week peak season rate?) and mention it on your website or advert descriptions.
- Keep an annual check on changing rates in your local market.
Summary. Do your homework on your local competitors and take the time to compare your facilities and property size. The less restrictions, the better.