How to Price Your Vacation Rental to Maximize Income Without Driving Away Guests


You own a vacation home, and you’ve decided to rent it out to earn some extra income.

How much money do you want to earn per year?

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Just Enough to Pay the Bills

The average person who rents out their vacation home earns about $26,000 per year (so reports — which enables them to pay the mortgage on the home if they haven’t purchased it outright, as well as the property taxes, insurance and so on. And when they decide to book themselves into their vacation rental, they in essence get to stay there for free.

To earn an average of $26,000 per year, you would need to make about $2,166 a month, or $433 a week. (But that’s not counting the two weeks you’ll set aside for your own enjoyment of your vacation home, sometime during the summer or winter months!)

If you set $26,000 as the minimum goal you’d like to make each year, you need to decide how to do it. Will you focus on quantity, renting out to guests at a lower rate so that you will always have a waiting list of people — or do you want to focus on quality, renting out to guests at a high rate a few times a month?

Those are the two main ways of planning your income strategy.

A third way is to use dynamic pricing. You price your vacation rental home affordably during most of the year, but during peak seasons, or even during peak events, you raise the prices accordingly.

Most hotels and motels follow a version of this pricing plan. They know when their peak seasons are, and they raise their prices by $10 or even $20 a night or more. During the “off season” or the “shoulder season,” they lower their rates by $10 or $20. The only hotels and motels that don’t follow that model are those that are situated in areas that have tremendous traffic all the time — winter, spring, summer or fall!


Related: 7 Questions You MUST Answer Before Investing in a Vacation Rental

Raise and Lower Your Prices as Needed

With dynamic pricing, you may raise or lower the cost of your home’s rental per night or week every single week to take advantage of what’s happening in your city at any given time.

For example, spring break for college students is typically a week later than spring break for high school students. But spring break in general occurs in some institutions the last week of February and runs through the middle of March.

That’s spring break for students in the United States.

If your city frequently gets visitors from Japan, England, and Germany (and you can do market research to find this out), then you need to know when their school holidays are. Schools in Europe typically go year round, with short breaks for summer and for holidays such as Christmas.

To find out when school holidays take place in Europe, you can check out this site.

There are other times of the year where you can raise your rates. Does your city have a week-long festival to bring tourists into town, for example? If so, raise your rates for that week.

To cite just a couple of examples, Cheyenne, Wyoming holds Frontier Days during the last full week of July. People come from all over the country to attend Frontier Days — and some folks come from around the world.

In Albuquerque during the first week of October, there’s the International Balloon Fiesta, which brings hot air balloon enthusiasts from every state in the Union and plenty of foreign countries, too.

St. Paul, Minnesota has a winter carnival that begins in late January and runs to early February. Fans of winter sports and art pour into the city during this time.

Then, of course, there’s the two-week festival of Mardi Gras in New Orleans!

There’s bound to be similar festivals in the town or city where you have your vacation home, and you can take advantage of them by raising your rates.

Of course, sensible people book their holiday lodgings months in advance, but what you are aiming for are those individuals who wait until the last second to book their vacation home. There’s always a percentage of these individuals!

Never Raise Your Prices

One way to ensure that you will always have renters is to charge the same rate year-round, regardless of the season or the tourist draw that is occurring. This might be a good idea when you are first renting out your property, if you are having trouble getting renters. Break that “logjam” of your first renter by charging less than your competitors during the holiday season, and after you’ve gotten several five-star reviews on your listing, you can start pricing your property more appropriately.

More Than Enough to Pay the Bills

If your vacation home is in a prime tourist destination such as Orlando, Florida  — surrounded by amusement parks such as Disney Word, Sea World and Universal Studios — you can pretty much charge “tourist season” all year round.

But if your vacation property is in a prime location in Orlando, you can charge even more year round and raise the rates appropriately when festivals are in town or during Christmas and spring break.


Related: 9 Amenities That Will Make Your Vacation Rental Guests Return Customers

Comparison Shopping

When you set the rent on your home, you will have checked out the prices charged by your competitors — people in your neighborhood, if any, who also rent out their vacation homes.

Prices are typically determined by the location of the home (a beachfront property is more desirable than a two blocks off the beach property and can be priced accordingly), the number of bedrooms (a 5-bedroom would go for more than a 1-bedroom), and the type of property (condo or house).

Then there are amenities that make a vacation home particularly desirable — a private swimming pool, a private tennis court, and so on.

All these will enable you to charge much more for your property. (Having said that, mortgage, insurance and taxes will be correspondingly high!)

But by judicious pricing of your vacation rental home during the various seasons of the year, you will be able to increase your rental income.

Investors: How did you ensure your vacation rental was at the right price point?

Leave your comments below!

About Author

Trey Duling

Trey Duling has been managing and marketing vacation homes in the Orlando and Disney World area since 2001. His passion is helping investors make their vacation homes more profitable. Please visit his website at


  1. Be aware that using it yourself may have a high opportunity cost if you could have rented it out at that time.

    And, once you arrive there you will probably spend a lot of time and money repairing and upgrading it, as even the best management companies would not do things the way you might want them done.

    And the management expense is high under the best of conditions. I once had a well regarded management company manager who often used the unit himself, for his friends and for his new hires, without telling me or paying for it.

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