Setting a competitive rate for your vacation rental home requires some research, a lot of objectivity and a good dose of realism…and although it’s a serious exercise, it can be fun too! Overpricing and unrealistic expectations can result in disappointment both for an owner who may then struggle to create occupancy, and for renters who feel they have not been given value for money so getting right from the start is important.
Start right where you are with other properties in your neighborhood that are offered for rent and look at the comparables. This is what realtors do when assessing a price to place on a property for sale. They first check other ones in the same area that have been sold recently, then evaluate the similarities, looking at criteria such as location i.e. proximity to schools & stores and square footage, before moving on to comparing amenities and features.
Location can have a big impact on rental rates. For example, where a large amount of rental properties are on, or near a beach, or a major attraction, rates will be at a premium level and they may drop significantly the further away they are.
Size and occupancy levels matter. If a property can accommodate two families or a larger group, then the rate will be higher than one that is restricted to a smaller number of people.
Amenities include number of bedrooms & bathrooms, quality of the kitchen, amount of living space, screened areas etc.
Features & Facilities can set a property apart from a lot of similarly sized homes in an area where there are a large amount of rentals. These could include a pool, hot tub or sauna and watercraft and interior features such as high-end entertainment systems. In areas where there are fewer properties, it can be more difficult to select the rate the market will stand.
Research listing sites, rental agency sites and classified ads, and check their availability calendars as well. A property may look as though it is priced well, but if there are few bookings that may indicate it is rated too high.