Of course, the number one reason you are considering renting out your furnished property is to generate some revenue, so it is very important to set appropriate rates for your property. After all, you want to be sure you are covering your expenses, as well the time and effort you have invested. You need to be sure you can generate a return.
It is therefore extremely important to optimize your property’s nightly rate structure.
If your nightly rate is too high, potential guests will quickly move on and your unoccupied periods will rise. If your rates are too low, you may attract lower quality guests who treat your property like a cheap backpackers’ hostel, and you will miss out on potential premium rental income.
The idea is to hit an annual income target with as much revenue as possible. You need to find a happy medium between maximum income versus the highest possible average nightly rates across all seasons.
For benchmarking nightly rates, we have a few rules:
- Study the competition: What type of properties are out there? What size are they? What amenities do they have? How does this affect their pricing?
- Analyse rates in your location and in surrounding suburbs