Asking for the right rental price for your holiday home will be central to your property’s success. Thanks to the internet, prospective guests can compare rental prices with just a few clicks, making it even more important for a stay in your property to look financially attractive when placed side by side with other venues. But how do you know what to charge? Should you change the price depending on the time of year? Here’s a quick overview of pricing strategies to help you get a clearer picture of what can work.
Firstly, it is not advisable to set your rental price based on a percentage return of the purchase price you paid. You need to take a step back and judge a reasonable rental price for the property itself, based on similar property types. This is because the rental price of a holiday home will not be subject to the same peaks and troughs as the purchase price. People staying in your property are not going to judge it on its purchase price, they are going to be looking for a competitive rental rate. When thinking about how much you want for your property, you could use the internet in the same way your guests will; search for similar properties and see what everyone else is charging.
Area and time of year can be important influential factors when it comes to setting a price. If your home is close to a beach, for example, holidays may be most popular in the summer months. If the property is in prime position for all-weather activities, you may find it is still popular in the colder months. It is likely that you will need to increase your weekly rental prices to reflect different occasions, such as half term and the Easter holidays.
When considering your asking price, remember that the amount guests pay needs to outweigh how much it costs you to run a rented property. Factor in heating, cleaning and general maintenance, with special consideration of the colder months when fuel costs may be higher and guests may spend more time inside the property. Even though it may mean you will achieve fewer bookings, in the long run charging more at certain times could prove more beneficial after your running costs have been accounted for.
Of course, it is not the best strategy to charge for extras. This can often be a barrier to a sale due to budgets being set, while many people staying in a cottage with such terms will be worried about using the full extent of facilities, as they may think certain complimentary items will be added to a final bill.
The best way to get a clear idea of your most popular times of year and of any losses during certain months is to weigh up profit and running costs at the end of the year. This will allow you to adjust your prices and ensure a profit in the following years. Also, keep an eye on the market and see what similar properties are charging throughout the year.
Naturally, the easiest way to agree a pricing strategy is with an expert agency by your side. Wyndham Vacation Rentals (UK) Ltd, for example, constantly scans the market to ensure that you will not lose out if wider circumstances change. Wyndham Vacation Rentals (UK) Ltd is also investing in pricing systems that can react daily to respond with demand for rentals, ensuring you can stay one step ahead of the competition.