How to Price Your Airbnb to Make BANK

Hey what’s up guys, in today’s video, we’re going to be talking about how you can price your Airbnb or short term rental property to generate as much return as possible, get as many bookings at the highest dollar amount you possibly can, so that you’re not leaving any money on the table. In this video, I’m going to share with you some of the things that you need to consider when pricing your property. And I’m also going to share with you some different tools you can use to price your property effectively factoring in all the proper data that you need to factor in in order to have a truly optimal pricing strategy. So let’s dive in and start by talking about the different areas or factors to consider when pricing your property. Ultimately, pricing comes down to understanding supply and demand above and beyond all else that’s really at its core, what you’re trying to do when you’re pricing a property is understand where the balance is between supply and demand. And where that point of equilibrium is. Anyone that took first year second year, econ is going to know exactly what I’m talking about that beautiful point where the supply and demand graphs intersect. So what we’re really looking to do is understand demand, first and foremost, then we can also understand supply, and we can figure out how we should be pricing our property. So naturally, there’s going to be a few different factors that influence the demand for a property. Number one, you’re going to have the day of the week, for example, there are going to be more people booking a property for a Saturday night, then for Tuesday night, in most markets. For other markets, it’s actually gonna be the opposite. So I’ll give you an example. If you have a vacation destination where people are typically going on holiday well, more people tend to holiday on a Saturday than on a Wednesday because they have to take time off work on a Wednesday to do so. Whereas if you have a property that caters a lot more to business travellers, many more people are going to be doing business and booking a place for business on a Wednesday than on a Saturday when they’re typically off spending time with their family or travelling going on holiday. And so you have to be aware of who you’re trying to attract to your listing in order to better understand which days of the week are going to be in higher demand. Now, the next thing is going to be the time of the year, you got to wonder Are there specific times of the year in your area where there’s more or less demand. Now this tends to be really impactful with more vacation focus listings, because typically there’s going to be a high season and low season for that area. For example, if you go in Colorado, a lot of those kind of winter markets, then you’re gonna see a lot of travel happening because people are going skiing snowboarding during their winter activities. Similarly, if it’s near a really great hiking, you might also get a lot of traffic in the summer. If you’re in a beachfront location for a cottage market, typically those areas are going to do really, really well during the summertime and not going to have as much demand during the wintertime. So there’s things you can do to optimise during both. But just understand that there is going to be more demand at certain times of the year in some markets is going to also factor in now some markets like for example, San Diego have very steady seasonality all throughout the year, there’s not a really big uptick or a downtick in demand, given the different months of the year, because the weather is beautiful there, there’s always something going on. And so for various different reasons, that demand stays relatively constant throughout the year. But that’s not the case. For most markets, I’d say the vast majority of markets out there are going to have different fluctuations in demand based on the time of the year, the month of the year that you’re in. Now, the next thing you want to consider is gonna be your booking lead time. That is how far in advance is it that you’re trying to fill those dates. Naturally, if you have a date that you’re trying to fill six months out in the future, you’re gonna have a lot more total demand for that day, then the property that you’re trying to book out for tomorrow. Because if you are trying to book it place for six months from now, well, anyone that’s planning their trip, six months can book it right now. And then in another month, the people that are booking their trip five months in advance, they can book it, and four months and three months, so on so forth. So you get access to the demand from all the earlybird like planner, people that are planning well in advance, you also get access to people that are going to be planning more last minute ish and the real last minute Booker’s. But if you have a vacancy that’s open tomorrow at your property, and you haven’t filled it up yet, the only people that are going to book that property from you are those last minute travellers that are just making last minute travel plans. And so that’s a significant amount less demand that you have overall try to capture on so you better make sure that you really optimise your price and have it set the right amount because you don’t have an opportunity to make a mistake here if the vacancy you’re just kind of having this one last shot to get it filled. So those are all a few of the things that are going to impact the demand in your area. You also want to look at other factors like events that are happening in the area that are going to spur more demand. So if there’s an event a festival, amuse is a concert, a sporting event that’s going to drive more demand, you want to factor that in as well. Now, the other thing that you want to factor in is supply the other side of this graph. And so supply is generally going to fluctuate a lot less than demand. But it still will fluctuate oftentimes in different markets, largely because of how popular Airbnb is, and how people are now becoming more aware that they can make a lot of money at certain times of the year supply will also increase during those times of the year. So we see, for example, that when the Superbowl comes to town, you see a lot more supply on Airbnb in the area that it’s coming into town. And because people realise, well, you know, if I just get out of dodge get into town for the weekend, I can make a few $1,000 By renting my place out on Airbnb. So naturally, people that weren’t previously adding to the to the supply of the Airbnb pool, they’re now going to list their property because they’re the opportunists that are going to do that. Now, other people are going to list their properties when they’re not there at them. So for example, a lot of cottage destinations will see people listing for maybe a few weeks in the summertime, but listing full time in the winter, because they don’t use the cottage at all during the winter, and they use it quite a bit in summer. And you’re going to see different fluctuations like that. So it’s also important to keep an eye on the supply in the market and see what’s happening there. Now, ultimately, that’s just gonna give you all kinds of data that doesn’t actually tell you what you should price your property. And so I know there’s probably some of you guys watching this video going Well, James, what do I actually set my price at? And the answer is, it depends. It depends on all of these different factors. And that’s why I wanted to put this video together for you guys. So you can understand that it’s not as simple as just setting it and forgetting it. If you truly want to maximise your returns and get as many bookings as possible at the highest rates possible, you need to have a pricing strategy that factors all these different variables in so naturally, the question becomes how do you do that? Well, you need tools in order to do it, because there’s no way easily that you can have all this data floating around your head and actually synthesise it and make the right decisions, you need to trust the data. But in order to do that, you need to have a tool that aggregates all this data. So that allows you to make those data driven decisions. So for beginners, I recommend using a tool that we built called the target occupancy rate tracking spreadsheet, it basically tracks a whole bunch of goals and metrics that we gather from the market from sites like air DNA, to see where your property should be booked at where it actually is booked out for all different months of the year. And then we can allow that to influence our pricing decisions or whether we increase prices, decrease prices, or hold prices where they are. The other thing you can do is start to look at pricing automation or optimization tools like price loud beyond pricing or wheelhouse. Now, the thing I always like to tell people about these is that if you’re not a great driver, then you’re not going to be able to use them properly. What I mean by that is I always like to draw this analogy of putting a horrible driver behind the wheel of a Formula One car, all they’re going to do is crash, they’re not actually going to get a better lap time, because you put them in this fancy sports car, this formula one car, they’re not actually skilled enough as a driver to be able to use the tool to its full capability. And so if you are just starting out, using a tool like price labs, beyond pricing or wheelhouse in my experience is going to get you even worse results than if you use a more simple tool. Because the tool itself can only do so much. It also depends on the person using it, the inputs you’re giving to it. And so I’ve just found that it actually isn’t going to do that much in the way of optimising your rates if you don’t know how to use it effectively. That being said, if you are a more seasoned Pricer or you know optimizer have short term rental listings, if you either manage them invested in them, if you own them, whatever you do, if you have experienced pricing properties on Airbnb, and short term rental, and you know what you’re doing, then having one of these tools, my preference is price labs, one that I currently use, and really, really like having one of these tools allows you to be even more fine tune, then you can buy manually using one of the tools like the one that we created. And it also allows you to do it on autopilot. So you don’t actually have to take the 510 15 minutes per week to do it yourself. So there’s obvious benefits to using it if you have the skill to use it properly. Now, if you want to learn more about working with us using our tools, how to use these tools, how to price your property, there’s links in the description down below for some free training that will walk you through that in great detail and show you how you can united with our team learn more about working with us if it’s something you’re serious about and you want to invest in short term rental properties or you want to manage other people’s properties and do a really, really good job of the pricing and make sure you’re not leaving any money on the table. That is absolutely something we can help you with. So just check out the links in description down below to learn more about all of that. If there’s anything I want you to take away from this, though, is that you absolutely need to have the proper tools in order to price your listing properly. Because I just see too many people making the mistake of not using these tools and trusting their gut or relying on you know, just their brain and keeping it all up here to try to price their property and the end result is that they lose 1000s and 1000s 1000s of dollars by just incorrectly pricing their property. And that’s such an easy thing to fix that it always pains me so much to see it so hopefully that is a takeaway for you from this video is that you absolutely need to use a tool and if you’re not already you need to get your hands on one and if you are currently and make sure you’re actually using it make sure you’re actually applying it so hopefully it’s been helpful for you if it has been if you learn anything in this video if you found insightful valuable at all, please be sure to hit that like button it really does help me out tremendously with growing this channel. So I really really appreciate if you just take a second and hit the like button on this video. Make sure you leaving comments down below if there’s any thoughts, questions, anything you want to share with me at all let me know in the comment section. And last but not least, make sure you hit that subscribe button so you can stay up to date with the two new videos we post every single week on the channel. With all that said, thanks for watching, and I’ll see you the next video