Whether you're a seasoned rental property owner, or just starting out, finding the right pricing strategy for your property is paramount to any kind of return on investment you make. It's also one of the toughest things to get right.
For first-time rental property owners, finding your pricing sweet spot takes a bit of trial and error. The reality is that it might take some time before you start attracting guests to your vacation rental. But with these three pricing strategies, you're off to a good start.
Read on for more.
1. Research, Research, Research
Before you begin pricing your vacation rental, research is your friend. Make sure to do a thorough comb of the internet to get a feel for the rental listings and their price ranges in your area. Make sure you take seasonality into account when comparing price ranges.
Always try to compare similar listings to yours, i.e. compare oranges with oranges -- properties in a similar location, the same amenities, number of rooms, etc. The more comparable vacation rentals you can find in your area, the better you can understand the local market, market trends, and where your vacation rental fits in.
2. Define Your Competitive Advantage
The vacation rental market is thriving in the Las Vegas region. Competition is rife and this makes for the perfect learning opportunity. Always keep a close eye on what your competition is doing in terms of pricing, discounts, deals, and the services they offer.
Once you have a good understanding of where your competitors stand, it's important to establish your own competitive advantage. This is what will set you apart from them. While it's a good idea to learn from your competitors, you have to differentiate yourself from them, too.
There are two key strategies you can use:
- A price differentiation -- here you offer a product at a lower price. This is a good way to increase your booking percentages, even if the profit margin is lower
- A premium pricing strategy -- this means you offer your guests a better product and higher quality service that they don't mind paying extra for. For example, offer them a concierge service, complimentary breakfast, or late check-in/out options
Either way, you'll have to keep close tabs on your competition and decide which strategy could set you apart.
3. Take Advantage of Peak Seasons
Peak season is when you can really make a good return on investment if your price your rental right. It goes without saying that you can price your rental home much higher in peak season versus the rest of the year. In some cases, this might be as much as one month's mortgage for one week's rental.
Make sure your pricing is competitive during the high season in order to make up for low/shoulder seasons. A good way to build up and continue your profits is to offer a reduced rate for the month prior to peak season, and the month after peak season.
This is a great way to create a competitive advantage and continue your earnings into the shoulder seasons.
Need Help With Attracting Guests to Your Vacation Rental?
Attracting guests to your vacation rental as a newbie property owner might seem challenging at first. With so much competition in the Las Vegas area, how do you stand out?
This is where expert property management can really change the game for you. PMI Property Management can help you determine the best pricing strategy according to the local rental market. Want to learn more about how we can help you make the most of your vacation rental as a business? Get in touch today.