How to Maximise Your Airbnb Property Rental Income
Setting a price for your airbnb property can be a very tricky area for hosts to decide, but it’s also one of the most important factors when it comes to airbnb property management. Getting it right will determine whether or not renting out your property, whether on a short or long term basis, is right for you. The best approach to take is to think of your property pricing strategy as you would if you were running your own business.
And to be fair, there’s a lot to think about when you take into account the bigger picture. You’ll want an appropriately worded listing to get noticed in the first place. Not only that, but you’ll need some professional photos to reveal your property in its full glory, and you’ll also need your own profile to be the best it can be too!
Work Out Your Expenditure
There are many reasons why you might want to become an Airbnb property host, but even if you’re more concerned with meeting new people, and being part of a vibrant scene, you’ll still want it to be worth your while financially, particularly as it can be time consuming. One way to ensure you make an appropriate profit is to estimate how much you need to earn to cover your costs. To do this, you’ll need to work out how much you typically spend on things like:
your rent or mortgage
bills – council tax, gas, electricity, WiFi etc
property management - maintenance, cleaning, supplies, furniture etc.
Once you’ve established these outgoings and how much you’re spending on your property every month, divide it by thirty to get a rough idea of what you need to charge per night to cover your costs.
Research the competition
Pricing matters. Get it wrong, and you risk deterring potential guests, either because they can’t afford your high prices, or they’re wondering if there’s a reason why you’re rates are so much cheaper than everyone else. It’s not an easy decision. Where you’re property is located, the extent of local amenities nearby and the time of year you’re looking to let your property are all key factors. So, how do you go about it?
Assessing direct competition is a good place to start. Make a comparison of similar properties in your area and the prices being quoted. It’s sensible to look at those competing properties advertised on the same property management site as travellers will typically compare a few places before deciding. This will give you a relevant price range. A wider search, if needed, would include researching similar airbnb sites or alternative local accommodation such as hotels, bed & breakfasts, hostels, etc. It’s also useful to keep researching, as new properties appear all the time and prices will change seasonally.
Occupancy Rates and Rental Yields
It’s best to price your property slightly lower to begin with and build up some history and positive reviews before thinking of increasing your prices. If you’re finding success in letting your property at the required times, particularly if general availability is an issue, then you can test a small increase in pricing to see if this has any impact on your future occupancy rate. Finding the right balance between supply and demand will determine if variable pricing works for you.
Take advantage of high season and special events
Unsurprisingly, airbnb holiday let bookings in Edinburgh are considerably higher in the summer than during the winter period. Edinburgh, like most major cities does have many year long attractions, but it’s the popularity of the Edinburgh International Festival and it’s sister, The Fringe, that brings tourists flocking in high season to the city. Add concerts, shows, hen and stag parties and there’s clearly an opportunity to look at adjusting your letting prices, perhaps considering premium rates at weekends.
Review and adjust your pricing regularly
It’s worth periodically review your pricing as competitor prices regularly change, the number and type of places available in your area change. You could also consider adding cleaning fees and guest fees, if there are space restrictions.
Talk to Elite
Elite Property Management, fully understand the opportunities and challenges of Airbnb property management and have considerable experience managing properties in the Edinburgh area. If you need advice about costing or anything else to do with managing your property, give us a call; as property management specialists, we’re always happy to help.