Renting out your property on a short-term basis can be a great way to make extra money. But before you start, it's essential to price it correctly. The price should be high enough to be profitable but low enough that it doesn't turn potential guests away — all while staying competitive with similar properties in the area.
There are two distinct approaches: pricing it yourself, or using software. Here's how to do both.
Pricing Your Short-Term Rental Yourself
1. Add Up Your Monthly Expenses
Do the math first. Factor in mortgage payments, utilities, tax, vacation rental insurance, housekeeping, and maintenance costs. Don't underestimate the value of your time either — this total is your break-even number, and everything above it is profit.
2. Evaluate Your Property Honestly
What benefits do you offer that other rentals don't? A hot tub, BBQ grill, or fenced yard are positives that help you stand out. Lack of parking, worn furniture, or a location far from attractions can lower your value. Know both sides.
3. Research Similar Short-Term Rentals
Research prices of comparable listings in your area — similar size, amenities, and location. Rates vary by vacation season and local events, so find rentals that truly match what you offer before drawing conclusions.
4. Account for Holidays and Peak Seasons
More people travel during holidays, weekends, and peak seasons, which means higher demand and more competition. Price accordingly and consider a higher minimum night stay during these periods.
5. Re-evaluate Frequently
You can't just set rates and forget them. Keep an eye on booking pace, the local competition, and any events that could impact demand. Adjust regularly to maximize occupancy and revenue.
Short-Term Rental Pricing Software
Doing it yourself can be exhausting. Here are the top-rated tools to make smarter pricing decisions faster:
Outswitch
Outswitch is an excellent beginner management tool. It shows occupancy and revenue forecasts and displays nightly average costs for similar STRs in your area up to a year in advance.
PriceLabs
PriceLabs provides analytics for vacation rental managers. A quick, easy-to-use tool that tracks historical data from nearby hotels and listings to help you make revenue decisions and adjust prices accordingly.
Wheelhouse
Wheelhouse specifically helps short-term rental owners find their target price point. Affordable and easy to use, it optimizes pricing based on occupancy rates from comparable vacation rentals nearby.
Beyond Pricing
Beyond Pricing goes a step further — it automatically updates your Vrbo and Airbnb listings to ensure you're charging the optimal amount every night, without manual intervention.
One more cost to factor in: don't forget vacation rental insurance when calculating your expenses. It's a deductible business cost and protects against the kind of unexpected losses — a broken appliance, water damage, or lost income — that can wipe out months of profit overnight.