Tips on Setting Rental Rates for Holiday Home Owners
The self-catered market is a competitive place, and price is one of the main factors that potential guests use to decide which property that they are going to book, and which they aren’t. Setting rental rates can be a tricky proposition for everyone from seasoned property veterans to first time owners. How you price yourself competitively but also ensure that your property is making a return on investment for your business?
Here at TS Property Services we know how important it is to set rental rates that reflect the sector, areas and properties that our owners work with. In light of this, we offer advice and support to owners on all levels of our service packages when it comes to pricing their property. With decades of combined experience in the tourism sector, our staff have a keen eye for pricing properties within the self-catering market, and to help share this knowledge we’ve devised a list of our top tips for setting effective rental rates.
Do Your Research
One of the best places to start is doing some research into similar properties in your local area. Having a browse of your area on letting sites such as Owners Direct and Tripadvisor, or even just undertaking a simple google search, can give you a lot of information on the competition in your area and which properties are most successful within certain price brackets. This knowledge can help you price your own property competitively based on what you offer in comparison to the competition.
Consider Turnaround Costs
When considering your minimum ROI, it is important to take into account the extra costs that come with running a property; costs which can easily eat into profit if not properly accounted for. For example, you’ll need to factor in the costs of cleaning, heating, welcome packs and maintenance when deciding on your pricing structure. All of these costs will help you to deduce what you need to be achieving as a minimum per stay, and then you can start considering how to make a profit.
Include Short Breaks
The trend for short breaks is set to continue in the UK tourism market, and this should be reflected in your pricing structure. Show clear pricing for short breaks in all of your literature and consider offering discounts or incentives to encourage shorter stays. By restricting your property to weekly lets, you’ll be slashing the amount of bookings that you could receive quite drastically, so it is certainly worth considering allowing short breaks. Consider also that allowing shorter stays will encourage more last minute bookings, and can be used to fill up gaps in your booking calendar.
Keep Up To Date
No guest is going to book a property that has out of date prices or doesn’t clearly show the price structure for the upcoming period. Why should they when so many other properties are there to accommodate them? Ideally, your property should be cleared priced for 12 months ahead, so that people can plan breaks far in advance.
This is one of the most important points that we continually reiterate to our owners. You must be realistic about what your property offers and therefore what it is worth. Don’t be tempted to overprice because potential guests are savvy, and will quickly work out if your offering does not match your asking price, especially in terms of what else is on offer. Equally, do not be tempted to underprice your property, or you risk attracting the wrong type of customer as well as making a loss and not a profit from your property. Do your research and be realistic about what your property offers and where it sits in the sector in terms of pricing.
Keep It Simple
Potential guests want to be able to see at a glance how your pricing structure works. So keep it simple both in content and in layout and don’t be tempted to add in complicated text or explanations.
Those are our top tips for setting competitive rental rates that will give you the best ROI. We would love to hear what you think, and if you have any more tips.Back to all news