Setting rental rates for owner bookings
One of the most stressful things for any vacation rental owner is what to charge when he/she decides to rent out their home. With these difficult economic times more vacation home owners are deciding to rent out their vacation homes. In many very competitive rental markets, like the Walt Disney World area, deciding how to correctly price the property as a rental can be a very difficult and time consuming task.
Most everyone takes the first step by going online and researching the competition. In the World of Package deals and Special promotions, Orlando Florida, rental homes can range from $50 -$500 per night. If you are considering to list your vacation rental on popular websites such as VRBO® or HomeAway™, you may find them extremely helpful in price comparison, yet be prepared to be very frustrated- Guaranteed!
The key to remember is, when you find a really low rental price, not every home renter has the same immediate expenses. Many owners have paid off the home mortgage, or the home maybe much older and therefore cost less at the time of the purchase. The important thing to consider is that you maintain YOUR financial needs. There is always some risk in renting out a vacation home to a stranger and you need to make sure you are properly compensated for your time, energies and investment capital. The fact is some rental income is NOT always better than nothing, especially if the guest damages your home.
Avoid Price Wars
I have seen many Price Wars, where property owners keep dropping rates in order to be the cheapest home “for rent” in town. You should steer clear of doing this, by all means possible. Vacation rentals are like hotels! There’re really cheap motels and higher priced quality hotels in that market – everyone knows what they are paying for! You need to be competitive with equal quality homes, in similar locations and have comparable amenities. More than ever people want good value for their hard earned money and not just the cheapest thing, they can get. You need to help them understand the value you are offering!
Highlight Quality & Value
In these economic times I think we all want the best value when investing in vacation travel. Dollar for Dollar, more and more people are finding out that renting a home while vacationing is a better investment and a very pleasurable experience for the entire family, cat and dog included. Fortunately all rentals are unique and people are willing to invest the time needed researching a vacation rental to understand what the property offers in quality and value.
Items that show Quality & Value:
1. 24 hours, 7 day a week guest services to the property. This way guests can feel safe knowing if they have any problems they will be taken care of immediately. If you don’t have a property manager that offers this level of service- FIND ONE! The number one reason people do not choose a vacation rental over a hotel is FEAR! “What if something goes wrong? Who will help me? What will I do?”
2. Testimonials from recent and past guest showing the home is being upheld and maintained to a condition that guest are able to have the best possible vacation while enjoying all the amenities offered by the property.
3. Compare the cost of good quality hotels and resorts in the area, for the number of people that can stay in your property.
4. Provide FREE amenities like wireless internet, long distance phone calls or discounts on local restaurants. Offer: “For a fee services”, like an in-home Chef, in-home masseuse, and local golf lessons. Your current property manager should be able to assist you with these services.
5. Always highlight the quality of your homes maintenance staff and property manager. In most instances the home owner is residing in a different state or continent than the vacation properties location. Brag in you homes description, telling your interested prospective renters how pleased you are with the people you hired to look after your investment! They need to know everything is and will be good for their stay at your home. If your property is not cleaned and maintained immaculately by your property manager FIRE them, they are losing YOU money!
Always be wary of the last minute booking’s looking for a killer deal. Many owners get last minute request wanting huge discounts since the property is likely going to be empty anyway. These people know what they are doing and over the years I have learned- These are the last people you may want to consider renting your investment home out to.
You worked very hard to have your Vacation rental property. You have invested endless hours and money to make sure it is a place that people want to stay. Don’t give into other property owners panicking and giving their places away. Practice good rental rate yield management! During peak seasons and Holiday periods do not discount the property. Let the other cheap rentals book up, and make the better profit margin during these times.
We would be more than happy to answer any questions or comments someone may have. Please post them to this blog.