smart pricing for vacation rentals

8 Replies

Hello Everyone,

My husband and I just bought a vacation rental property and we are going to list is on the major sites (airbnb, VRBO, booking, homeaway, etc). From your experience, can you tell me which website you get the most rentals from or if there are any additional websites that you would recommend?

Also, I heard about 3rd party pricing tools like Airdna, Wheelhouse, and Beyond pricing. Has anyone used these and are they worth the 1%? Which one would you recommend to start with?

Thanks!

@Brigitte Keene depends on your market. In mine it’s all Airbnb and VRBO and then it depends on the host. Old hosts get more VRBO and young get more Airbnb. Why? The guests match the hosts. Just price things yourself. Study your competition and go lower than them until you have 50+ reviews. You can change your prices 20 times a day from the app on your phone if you like. Good luck!

I use Wheelhouse and Beyond pricing and Air DNA. All are great. I have 9 listings in three markets. I don’t have time to change prices several times a day. That takes a lot of research and doesn’t fit the passive income model. Totally worth the 1% not to mention the stats they provide on local trends and the competition. Air DNA is not a pricing tool. It’s a market evaluation tool that only has Air Bnb data in it so it’s a little skewed. 

Bottom line: use automated pricing tools to maintain your listings. Use Aur DNA to evaluate before you buy. 

Good luck

Thank you both so much for your responses. For only 1% it seems like a great way to take some of the daily hassels out of renting. 

Karen, For now we just have 1 property so would you recommend Beyond Pricing or Wheelhouse to get started? Also, do you find that you maximize your occupancy and income with these tools or do you still have to make manual price adjustments if you think it is too low or high? 

Hi Brigette,

I have used all of them and have now gone back to managing the pricing myself.  It doesn't take much effort, 5 minutes every morning to adjust accordingly, and about 2-hours the beginning of every month to compare against my data set.  VRBO/Homeaway recently launch a product called MarketMaker. It helps you determine the competitors in your local market and how they have priced their properties.  Take a look at it.  For Airbnb, I have a handful of properties that I watch and compare pricing against, so I know that I am competitive.  I am also beta testing a product called RentyBump.  This tool is a bit different than the others in that @Alan Da Costa has designed it to capture data for your use prior and post stay and provides a recommendation on what % to price your property in comparison to the competition.  He's a new player in the pricing market and his product has a lot of promise.  He only has a few markets in test right now, but worth watching.

As for occupancy, no matter what the OTA's tell you, it's all about pricing.  The right pricing will give you higher occupancy.  Adjust your pricing often and you'll improve your Airbnb rankings.  Price it competitively on VRBO and you'll improve your rankings (but I have not seen a change in rankings based on frequency).

Final comment - I don't, and will not use Booking unless they change their interface and process.  Be careful, my experience was that they were very restrictive and have a "don't care" mentality about the business and the hosts.

Best of luck in your new venture!

Mike

@Brigitte Keene I base my pricing off of local motels.  There are 3 cheap motels in this town, a room with 2 beds is $400/week.  They were all built prior to 1985.  There are 3 nice hotels in this town, a room with 2 beds, breakfast, swimming pool, exercise room, etc is about $700/week.  They were all built this decade.

I provide the hotel experience and comfort at the motel price.  2 BRs are $400/week.  3 and 4 BR's and $600 & $800.  I have a really big 3 story house with 4 baths, jacuzzi on the 3rd floor, and a kegorator.  Sleeps 8+.  I charge $1200/week for that.

@Michael Greenberg makes a good point about booking.com.  I would like to say how I feel about them, but that would probably get me banned again by the moderators.

24 STRs is what I have.  5 houses are currently available.  The rest are rented out.

In many markets there is a leader that you simply have to go with because they dominate the area. In mine, that's VRBO. I list on VRBO and AirBNB and I'm fully booked except for those occasional 1-2 day midweek gaps that are hard to avoid. Statistically, I find that VRBO guests pay more, stay longer, and book further in advance than AirBNB guests. But I'm happy to take both. Cost to me is similar. I feel like I should get on TripAdvisor, Booking.com, and FlipKey, but I just haven't found the time because I'm too busy counting the money I'm making (and dealing with the d*mn maintenance problems that never seem to end). 

@Brigitte Keene I’d check out Evolve if you are looking for 3rd party management. They’ve been blowing me up but the property in question was by that time in a 12-month lease. Vacation rentals have tax issues regardIng personal usage, so talk with a tax professional. But I’d generally advise going with anyone but a local property management company if it’s in a tourist area. They will eat you with fees.