Hello LMH! I've just started renting my tiny property out and although it has been a surprisingly busy few weeks I wonder if I could be doing things better. My friend builds websites for a living so we have a lovely website that comes pretty high in search engines but practically all of my bookings so far have come from OD, HL or Airbnb. I had read somewhere that owners put up their prices on these sites to cover the various charges they make. Is that true? If so how much is the general consensus?
The other question I have is about pricing: I've slashed my prices in the last few weeks and now am generating a fairly healthy interest. It does mean that for a lot of the time I'm running round ironing duvet covers and cleaning the place but I feel happier with my calendar full. Am I making a mistake? Am I underselling myself? Should I keep my prices high and hold out for the big bookings? All opinions gratefully received!
Money Money Money!
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costa-brava
- Posts: 689
- Joined: Mon Sep 20, 2010 11:57 am
- Location: costa brava spain
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Only you can really answer that question. It depends how much you're running round against how much you make. You have to cover the overheads so if you get a few more weeks that do that it can be worth the extra work.
But here are two other points:
NEGATIVE:Bad reviews tend to come from people off season. The weather's rubbish so they have time to pick holes in your place.
POSITIVE: Why not employ a cleaner/helper. You're talking ten quid an hour. Then put your feet up and take the extra bookings, maybe put a minimum number of days.
But here are two other points:
NEGATIVE:Bad reviews tend to come from people off season. The weather's rubbish so they have time to pick holes in your place.
POSITIVE: Why not employ a cleaner/helper. You're talking ten quid an hour. Then put your feet up and take the extra bookings, maybe put a minimum number of days.
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PW in Polemi
- Posts: 1781
- Joined: Sun Oct 21, 2012 5:23 am
- Location: A village in Paphos, Cyprus
Hi hugsarah and welcome.
Have you checked out any local competition? Are there any holiday properties near (ish) to yours that are similar? If so, have a look at their availability charts and prices. How does yours compare?
If you've been reading on here about Ladyaga's tales of woe, you will see a common thread to them. Her property was vastly underpriced (by an agent) and consequently was overused and abused by under-appreciative guests. There is such a thing as being too cheap. Value for money is one thing, and comes in all price ranges, from budget to luxury. You need to know whether you are more budget, or middle of the road, or luxury. Then price accordingly.
If you're too cheap, you won't make any capital to cover those essential replacements. Last year, it was the oven and the washing machine for us. This year, the dishwasher. The bedrooms are scheduled for repainting this winter - so I'm hoping to replace the curtains too. All these costs mount up and if you're not pricing right, you won't have the money to keep your property well maintained.
After all, it gets a lot of use and what minor damage might be overlooked in your own home, cannot be overlooked and left in holiday accommodation.
A full calendar is not always a good thing. If it's full because you've underpriced, then maybe you're not covering costs. Also, if you're doing all the work yourself, you might well "burn out". Fewer weeks sold, at higher prices, to appreciative respectful guests can actually be better financially than more weeks at a lower price to damage-causing stressful guests.
Have you checked out any local competition? Are there any holiday properties near (ish) to yours that are similar? If so, have a look at their availability charts and prices. How does yours compare?
If you've been reading on here about Ladyaga's tales of woe, you will see a common thread to them. Her property was vastly underpriced (by an agent) and consequently was overused and abused by under-appreciative guests. There is such a thing as being too cheap. Value for money is one thing, and comes in all price ranges, from budget to luxury. You need to know whether you are more budget, or middle of the road, or luxury. Then price accordingly.
If you're too cheap, you won't make any capital to cover those essential replacements. Last year, it was the oven and the washing machine for us. This year, the dishwasher. The bedrooms are scheduled for repainting this winter - so I'm hoping to replace the curtains too. All these costs mount up and if you're not pricing right, you won't have the money to keep your property well maintained.
After all, it gets a lot of use and what minor damage might be overlooked in your own home, cannot be overlooked and left in holiday accommodation.
A full calendar is not always a good thing. If it's full because you've underpriced, then maybe you're not covering costs. Also, if you're doing all the work yourself, you might well "burn out". Fewer weeks sold, at higher prices, to appreciative respectful guests can actually be better financially than more weeks at a lower price to damage-causing stressful guests.
Dogs have masters. Cats have slaves!
I'll slightly rephrase that if I may be so bold:PW in Polemi wrote: Fewer weeks sold, at higher prices, to appreciative respectful guests can actually be better financially than more weeks at a lower price to damage-causing stressful guests.
Fewer weeks sold, at higher prices, to appreciative respectful guests is infinitely better, and not just financially, than more weeks at a lower price to damage-causing stressful guests.
It's an absolute no-brainer - once you can see it
Don't be misled by the notion that high occupancy is everything; it's not. Many big agencies will tell you that full occupancy is the Holy Grail of letting, but they just take the commission without the incremental graft.
It's the bottom line that matters, along with what you have to do to achieve it.
Always include your own time at market rate as a hidden cost when making the calculations - you don't work for free.
And never, ever, undervalue your product and service and never sell cheap; all that achieves is to attract a market you're not interested in and sends out all the wrong messages about the true value and quality. (Actually it has knock-on effects that are detrimental to everybody trying to take the letting business seriously, but that's a whole different thread!)
Aim to find the level where your business pays, and where you can still enjoy it - that will take a bit of time and experimentation to sort out, but it'll be worth it.
Oh, and welcome to LMH and to the journey!
The prices you have on your website seem realistic without knowing your area; are you selling them cheaper than this?
I discounted heavily when I first started, as I removed the weeks from my agency who simply weren't filling it. For a few weeks that did the trick to get income in. The prices however were not realistic for a long term viable buinsess.
However, these guests will not become your regulars as if you subsequently raise your prices then they are not your target market. Repeat guests are the holy grail; a known quantity, respectful of it (you won't have them back if not) and they too know what they are getting.
The rest has all been said by the others. Welcome - it looks lovely, so I'm sure you'll do well.
I discounted heavily when I first started, as I removed the weeks from my agency who simply weren't filling it. For a few weeks that did the trick to get income in. The prices however were not realistic for a long term viable buinsess.
However, these guests will not become your regulars as if you subsequently raise your prices then they are not your target market. Repeat guests are the holy grail; a known quantity, respectful of it (you won't have them back if not) and they too know what they are getting.
The rest has all been said by the others. Welcome - it looks lovely, so I'm sure you'll do well.
Wow. Thank you guys for all of the good advice. I think you are all pretty much saying exactly what I was suspecting. I need to check my sums and decide what I want. So far the guests have been very lovely and very appreciative but that may not always be the case.
Perhaps my dilemma is the downside of starting out just when it gets quiet.
Perhaps my dilemma is the downside of starting out just when it gets quiet.