Airbnb pricing – How to set the best price & maximise your rental income on sites like Airbnb

Price setting is one of the trickiest areas for hosts to decide and one of the most commonly asked questions – is the price too high? is it too low? what’s the right price level?

Its also one of the most important factors to consider to get the most from your rental income so its worth taking the time to review it. Once you have added your listing, taken super photos and created a fantastic profile then pricing becomes one of the most important considerations guests will be making in choosing your place.

Although there is no perfect price level this article includes some tips and ideas on how to optimise your pricing & maximise your rental income:

  1. Competitive context — make a comparison of similar properties in your area and the prices they are asking. Firstly check other properties advertised on the same site as travellers will typically compare a few places before deciding, so this will be your direct competition and should provide you with the most relevant price range. If there are not enough comparable places on the site you are advertising on then do a wider search to include other sites or alternative accommodation options such as hotels, bed & breakfasts, hostels, etc.
  2. Occupancy rates & rental yields — if you are starting out its better to start with a lower rental price to get some bookings and build up some positive reviews. Once you have been renting for a while if you have no problem renting out your place most of the time then its worth testing if a small increase in pricing has any impact on your occupancy rate and visa versa if a decrease in rent will increase your occupancy rate. The goal is to find the right balance between the occupancy rate & rental yield to optimise your rental income.
  3. Seasonality & Special Events — on average summer bookings to London are 15% higher in the summer than during the winter period in addition to several seasonal peaks in demand, for example during Xmas, Easter, School Holidays & Bank Holiday weekends. There may also be special events in your area such as concerts, shows, matches, exhibitions, etc where it could be worth adjusting your pricing depending on the level of demand. Airbnb offers the option to add weekend pricing and manage different pricing levels in advance through the calendar.
  4. Availability — if there are only a few places available in your area and they are fully booked then you could reasonably increase pricing due to the shortages in availability. Managing variable pricing on this level is a bit more time consuming but could be worth it as a simple way to boost your rental income.
  5. Add a cleaning fee to your bookings — this Airbnb option is often overlooked but cleaning is one of the most time consuming or if you use a cleaning service costly elements for each booking, it’s becoming increasingly common and reasonable to add a cleaning fee.
  6. Additional guest fee — there is a feature on Airbnb that allows you to add an additional guest fee, so if you have the possibility to add additional sleeping arrangements even if a room or place is normally only large enough for a certain number of guests, this could be very useful for guests that don’t mind sharing the space or have an additional person staying for only part of the period.
  7. Review and adjust your pricing regularly — periodically review your pricing as competitor prices regularly change, the number & type of places available in your area change in addition to the reasons given above such as seasonality & availability.

Price setting can significantly improve your rental income if you are able to actively manage it. As part of our Airbnb management service London we will optimise your pricing and occupancy rates, we also offer individual as well full property management services with no hidden fees or contract commitment required — if you are interested in finding out more about our services then don’t hesitate to contact us (email: hello@helloguest.co.uk) or visit our website (helloguest.co.uk)

Please comment if you found this article useful or have some additional thoughts that could help hosts with pricing.

Should I rent my property on sites like Airbnb?

Short stay rental sites such as Airbnb, Housetrip, Wimdu & others offer travellers an alternative to staying in hotels. They are online market places connecting private landlords with people looking for a place to stay typically for short periods or weekend visits. This includes a wide range of places to stay from just a room, studio, apartment or even a entire house. But this isn’t exclusively for tourists as many regular business travellers have also been attracted by the benefits over staying in hotels.

So what are the advantages for travellers vs hotels?

  • Much more space for less money, typically you can get an apartment for the same price as a hotel room
  • Staying in a place with more character & personality than the impersonal ‘vanilla’ hotel experience
  • Having access to amenities such as a kitchen so you don’t have to eat out all the time
  • Meeting local people and getting local tips on what’s on & where to go

And what are the advantages for those renting?

  • Flexibility when to let out your place or not if you need to stay there for a while
  • Higher potential rental income vs longer term flat rental or a way to earn extra money if you are renting just a room or part of your property
  • Great chance to meet people from around the world, open your home and share experiences

Since Airbnb launched in 2008 there has already been a huge increase in the number of places on offer with currently over 25000 places in Britain. It has become an established alternative to hotels with more and more people using this option, demand is growing.

So what are the main issues with listing on sites like Airbnb?

  1. Once you have listed your property it takes some time and effort to manage the listing, the main on-going activities include guest communication, screening & booking, cleaning/preparing the place for the next guest, check-in & check-out, property maintenance & admin.
  2. Part of the above ongoing activities but worth highlighting is the importance of guest screening to avoid problems. Airbnb gives guests and hosts the chance to review each other providing a helpful safeguard for both sides.
  3. Even though the overwhelming number of experiences have been positive there have been some bad experiences with guests damaging things. As a result Airbnb has put in place some insurance cover under their Host Guarantee up to £600000 but some things are not covered. Also not all sites offer this and it’s worth checking your home insurance for additional cover. Finally you can ask that guests give a deposit to cover against minor issues.
  4. There may be some legal aspects to consider especially if you are renting your place and intend to sublet, you would need to check your lease or rental agreement. You may also need to take care of tax payments especially if you are generating a significant income from rental.

Overall we would recommend giving Airbnb a go as a great way to earn some extra cash and still have the flexibility to use your space when you need it. If you are letting out your place or thinking about it but want some help managing it we can provide either individual or a full property Airbnb management service London — don’t hesitate to contact us (email: hello@helloguest.co.uk) or visit our website (helloguest.co.uk)