How To Price Your Airbnb

In this video, I’m going to be talking to you about Airbnb pricing strategy and how you can price your short term rental property to maximise your overall returns. So whether you’re thinking about buying a short term rental property, or you already have one and you want to get better returns on it, get more bookings at better rates, you’re gonna want to check out this video
I’m going to share with you all of that, and I’m also going to talk about whether or not you should have cleaning fees, whether or not you should have extra pet fees, all that stuff. So let’s jump right into it. And let’s get started with the fundamentals of pricing your property on Airbnb, so that you can maximise your overall returns and make more money without having to change your property or do a bunch of extra work. So this all comes down to the simple basics of supply and demand. Don’t click off this video just yet, I swear, I’m not gonna bore you to death with an economics class. All I mean to say is that when there are more people that want to book a property in your area, such as yours, then you can have a higher price. And when there’s less people that want to book that property, your price needs to be lower, that’s really all there is to know at a fundamental level. And so all you need to do is number one, know how many people are looking to book your property for a specific date. And then number two, adjust your price accordingly. So as a rule of thumb, if a date is further out in the future, that means that you have more overall demand for that date than if it’s really, really close really soon right now. And what I mean by that is really simple. It’s it, if you have a date six months out in your calendar, then there’s a whole bunch of demand for that specific date, there’s going to be people that want the property right now they want to book it right now six months in advance, there’s going to be another jungle people that are going to want to book at five months out, because that’s when they’re planning their vacation, all the way up to people that want to book it two or three days out. And so you can afford afford to be more aggressive with your pricing strategy. Generally, when you’re six months out, because you can afford to have a higher price. As you get closer and closer to that date. If it was supposed to get booked and it isn’t getting booked, you’re going to want to gradually decrease your price overall, because there are going to be fewer and fewer people booking. Now that being said, you also need to factor in exactly what your goals are for the particular month. So if in a given month, you have let’s say 30 days available, and you know that in this market, in this particular month, month, you should be expecting just for easy numbers 100% occupancy, then you need to know what metric you should be at like what portion of that show you booked up six months, five months, four months, three months out into the future. So you know, if you’re on track to your goal or not, for most months, it’s not going to be this simple for most months. In most areas with most properties, that goal is not going to be 100% occupancy rate, the goal might be closer to 50% occupancy in a low season, and maybe in the 90s for high season. And so if you’re getting your property overbooked, meaning you’re constantly hitting 100% occupancy, it probably means that your pricing is too low. On the other hand, if your property is getting under booked, meaning you’re aiming for 90% occupancy boy you’re hitting is closer to 20 or 30, it means your property is more than likely overpriced. And so you just need to know what those targets are for your area. And we’ve got tools that we’re going to give you as well and description are linked down below that are going to help you to establish those goals and then track whether or not you’re on track for those goals overall, then all you need to do is on a weekly basis takes 10, maybe 15 minutes, go into your listing and increase some prices decrease other prices based on what the data is showing you. Now this is going to far far exceed the numbers that you’re going to get if you use the kind of set it and forget it or best guests pricing strategy that most hosts use, you don’t want to rely on a flat fee. Now a slight improvement on just a flat nightly rate right across the board is to have a Weekday and Weekend setting. But you really really want to have your pricing be custom based on the exact day. And based on the demand and the supply of listings for that particular day. How far is out in advance all that stuff that sounds super complicated to you Don’t worry, again, there are tools, you can grab them by checking out the free trainings, LinkedIn description down below that are going to help you to make this process a lot easier. So you don’t need to be some kind of data scientist to figure all this stuff out. Now I also want to touch on extra fees. And I also want to touch on launching your listing. Let’s start with talking about launching your listing because that’s something that I think a lot of people overlook. Now I’m going to keep this really simple and keep this short for you. When you’re first launching your listing, the most important thing you can do is not maximise your overall revenue, but maximise the total number the quantity of bookings that you get. Guys just want to take a quick break here to say that for those of you watching, who want to build cashflow, and long term wealth by purchasing Airbnb and short term rental properties, there’s a link in the description Write down below for a free training that will walk you through my exact strategy for investing successfully in Airbnb. Now, if you’re not ready to actually buy properties, and you want to get started managing other people’s properties on Airbnb the same way I got started and build a full time income managing other people’s properties, there’s actually another free training linked in the description down below as well, there’ll be a really great fit for you. So whether you want to invest in short term rental properties and actually build amazing cash flow and long term wealth by acquiring the assets, buying the properties themselves, or you’re looking to earn a full time income, managing other people’s properties on Airbnb, we’ve got some awesome trainings that are linked in the description down below, it’ll definitely help you out. When you sign up for the trainings, we’re also going to send you a few other tools and resources completely for free just to help you get started. Again, the links to sign up are in the description down below. And both trainings and all the tools are completely free. So make sure to register for the trainings, links in the description down below. So when you first launch your listing, it’s actually going to be to your advantage to your benefit to decrease the price of your listing. So it’s actually booking out for lower than what you would optimally have the property price stock. In other words, discount, discount your listing early on when you first launch it. So that way you launch that listing, it gets a whole bunch of initial bookings, and you’re going to show Airbnb in their algorithm. Hey, people love this property, and they want to book it, that’s going to tell their algorithm to show it to more people because Airbnb makes money when their guests actually book your place. So they want to show it to more people. As long as you’re getting booking, what it’s also going to do is give you a whole bunch of traction from getting initial reviews from those first part of guests that come and stay at your place if you launch your listing, and it’s just crickets, because you’re trying to price yourself at the absolute optimal rate, well, you’re not going to get as many bookings because you don’t have the track record that other listings do with a whole bunch of positive reviews. And number two, you’re not going to get promoted as high in the search rankings overall. And number three, you’re also not going to get initial guests coming in there to give you those phenomenal reviews that are going to help to improve the performance of your listing even more. So you really really lose out by trying to optimise your pricing early on, my recommendation is take what your optimal price should be and discount it by anywhere from 10 to 30%. Depending on the listing depending on what’s going on the market what time of year it is, you really want to discount it anywhere from 10 to 30%, generally, so you can get that initial traction, that’s going to help you a lot more in the long run. That’s what I call stepping over the pennies to pick up the dollars. Now last let’s talk about extra fees. This is a question I get asked really often. James, should I have a cleaning fee? Should I have an extra guest fee? Should I have a pet fee all these different fees? Now what I recommend is that you have fees for things that bear an extra hard cost. What I mean by that is that when you have a cleaner go in and professionally clean your listing, there is an actual real cost associated with that. So yes, you should have a fee for it. Because otherwise, it’s just gonna be really complicated and convoluted to try to price your listing properly. For example, if it costs you $250, let’s say to have someone go in and clean your property, well now you can’t allow lower than two night bookings if your price drops below $250 or 125, depending on how much money you want to make. If you have a one night booking, it’s got to be at least $250 just to break even, but really want to be more not. If you have a longer length of stay, it could be a lower Nivea rate, it gets really, really complicated really, really quickly. So the easy solution to that is just add in a cleaning fee. I’ve heard other people out there saying Oh, you’re less don’t get booked up way more if you don’t have a cleaning fee. And I just haven’t found that to be true, certainly not enough to merit all the extra complexity and complication of having to try to figure out what your nightly rate should be and have it adjusted. So it’s higher for shorter length through stays and lower for longer lengths essays. So then the next question is Will James does that mean that I shouldn’t have a pet fee or an additional guest fee? And to that?
My answer is yes, you absolutely should not have an extra guest fee or a pet fee in most situations, because let’s face it, if someone has a pet or not, you should still be vacuuming your listing, you should still be sweeping up. Yeah, there might be a little bit of extra work for the cleaner to do. But as long as the guests was respectful and they had their pet well trained, they weren’t jumping off on the couch with dirty paws. And there really isn’t any additional cost to them having a pet that they’re bringing by listing if your property is pet friendly to begin with, that shouldn’t be a really big deal. That being said, if someone does actually come and have a pet that does jump up on the on your white couch with their dirty paws, then yes, you would absolutely choose a charge a one off fee to that guest for the additional cleaning. But don’t penalise every single guest that has a pet just because one pet owner once in a blue moon might be irresponsible. Same thing with after extra guests. You should realistically be cleaning your linens on every sink. no bed on every single turnover for regardless of whether or not it looks like someone actually slept in that bed. And so I don’t recommend charging extra gas fees. The only exception to this is if you’re going to be having your cleaning team roll in like a cot, or some other kind of auxilary bed that normally wouldn’t be set up. But generally speaking, what’s going to happen is if you add an extra guest fee or a pet fee, all you’re going to accomplish is having a bunch of guests lie to you, they’re just not going to be honest in an attempt to avoid the additional fees. And then suddenly, you’re gonna have a whole bunch of more issues where you’re not actually making the money you thought you would make for charging this additional fee. And you have guests that are being dishonest. So I just personally don’t recommend it, guests are going to find me nickel and dime me, they’re not going to like it, it’s going to lead to a worse experience, you’re probably not going to make any more money, you’re probably going to end up getting lied to, and it’s just really all for nothing. So I would recommend avoiding those extra fees wherever possible. So you really want to keep it to just adding that cleaning fee and then your nightly rate. So give any other questions about pricing or you want help with it, let us know check out the links in the description. They’ve got a bunch of trainings that will help you to optimise whether you want to buy, manage or host your own place on Airbnb, we’ve got all kinds of different trainings linked in the description. If you have other questions about pricing or anything I talked about in this video specifically, let me know in the comment section down below. If you liked this video, make sure you hit that thumbs up button make sure you give the video like it helps us tremendously with growing this channel. So really, really appreciate if you do take a minute to hit that like button. And last but not least, make sure you subscribe, hit the subscribe button so you can stay up to date we post two new videos on this channel every single week. So if you want to keep up to date with those, make sure you subscribe. All that said thanks so much for watching. I’ll see you in the next video.