Whether you are the manager of a sole income-generating Airbnb property, or you have hundreds of Airbnb properties under your rental portfolio, there is a common question that plagues all Airbnb rental property managers: “How much should I charge for my Airbnb rental property?”
The answer to this question will depend heavily on your specific rental property. The size of your property, local market, amenities, number of guests it accommodates, and plenty of other factors come into consideration when choosing the right nightly rate for your specific property. However, there are a few ways you can price your rental property to ensure you are staying competitive within the market, all while ensuring the costs of owning your property are covered and maximizing your potential for direct bookings.
A cozy studio in a popular city draws a different crowd than a sprawling five-bedroom lakehouse, so each property demands its own pricing plan.
If your entire home sleeps eight, you might set a higher base rate, then add per-person surcharges that reflect the added upkeep. Single-room rentals, on the other hand, can lean on smaller margins but enjoy steadier occupancy since solo travelers and couples typically book them.
Hosts who tailor rates to their property’s capacity often see more consistent bookings across all seasons. Combine these occupancy-based strategies with cost-based pricing to ensure you’re covering monthly expenses while appealing to the specific guest profiles your listing attracts.
The easiest way to price your Airbnb property is to find similar properties in your area and base your pricing model off these properties. This ensures you're offering a fair price for your property type in your location, so long as you've assessed your property correctly.
A couple of things to take into consideration when it comes to your property and using a market-based pricing model:
For example, if you list a full apartment in Manhattan that sleeps 4 people, with amenities like a washer, TV, and kitchen, you'll find the general price range for comparable properties is around $500 per night, give or take $100 (with some outliers on both ends). When comparing property types, smaller units typically command higher per-person rates—a small Airbnb that fits 2 adults might average $125 per person, while larger properties that accommodate 6 adults might only charge $60 per person.
The apartments listed on the high-end of this range will have a few extra amenities, and quality furniture to supplement. The low end properties may have more outdated versions of these amenities, and the general appearance may leave a lot to be desired. If your property features a few extra amenities or the latest version of those amenities plus quality furniture, you could assume that a fair price for your property is $450-$500.
While market-based pricing is a great model to ensure you're staying competitive, it fails to address a critical question: "How can I be sure my costs are covered?" Enter the cost-based pricing model for your Airbnb rental property. This approach is particularly important when implementing seasonal pricing strategies, as your base costs tend t remain constant even when market rates fluctuate.
Cost based pricing ensures that the price you are listing your property at is at minimum equal to the total costs of your rental property. This is calculated by adding up the total monthly cost of your rental property and dividing that sum by 30 (the average days in a month).
Costs you should include in your total are:
Remember that these fixed costs continue regardless of occupancy rates or seasonal pricing adjustments. Certain costs, like outdoor landscaping or maintenance, might go up during certain seasons. Keep annual cost fluctuations in mind when you're doing the math.
Let’s say you have a monthly mortgage payment of $900, an average gas bill of $140, electric bill of $170, and water bill of $70, and your cable/internet bill is a fixed monthly rate of $130. You pay $500 per month for short-term rental insurance and $250 per month on supplies like toilet paper and items for a welcome basket. You've kept track of your maintenance costs, like seasonal cleaning of the gutters and one-off fixes like fixing the dishwasher, and determined that it averages out to approximately $100 per month.
For this example, we will say our cleaning fees are added on as a separate cost, and are not included in the total cost. Here is how we calculate our minimum nightly rate:
Formula: Total Monthly Costs/30
$900 mortgage payment
+$140 gas bill
+$170 electric bill
+$70 water bill
+$130 cable/internet bill
+$500 for short-term rental insurance
+$250 for monthly supplies
+$100 average maintenance costs
= $2,260 Total Monthly Cost
Divided by 30 days, that comes out to a minimum nightly rate of $75.30
Remember, this is just to breakeven on your total costs, assuming you're booked all 30 days in a month. You may need to charge double per booked night if you only have a 50% occupancy rate, for example.
To turn a profit, you'll need to charge more than the breakeven price! This base rate calculation is essential for any dynamic pricing strategy, as it establishes the absolute minimum you should charge, even during low-demand periods.
Seasonal demand swings can make or break your Airbnb’s bottom line, so adjusting your rates throughout the year is crucial. Peak travel months typically see higher occupancy, but raising rates too high might deter bargain hunters. Tools like AirDNA lets you see how your competitors are adjusting rates over the course of the year and provides recommended rates for each night, keeping you both competitive and profitable.
Monitoring local events, weather patterns, and holiday schedules also helps you identify potential surges in demand. Finally, track performance indicators like RevPAR (Revenue per Available Room) to spot trends early and fine-tune your seasonal pricing so your occupancy stays solid, no matter the time of year.
If you are a vacation/short term rental property manager with hundreds of rental properties under your supervision, keeping track of your listing prices and changing them manually can be a next to impossible task. Luckily, several options provide automated pricing based on seasonality, market demand, local events, and other factors that affect your listing prices. These dynamic pricing tools can save you significant time while optimizing revenue.
Airbnb offers their own automated pricing tool, which they call smart pricing . This tool uses the current market conditions and compares them to listings that are similar to yours, generating an automated price for your Airbnb listing.
There are mixed reviews on Airbnb's smart pricing tool, but the general consensus among hosts is that the tool prices your Airbnb listings too low. Many hosts report that Smart Pricing typically undervalues properties by 15-25% compared to market rates. There is wide speculation that the reasoning behind the low pricing is to remain competitive with hotels, who Airbnb shares the short-term rental market with.
There are a wide variety of third-party automated Airbnb pricing tools available, each with their own pricing algorithms and features. Many of these pricing tools integrate seamlessly with your vacation rental management software , allowing you to view all of your essential property management metrics in one place.The best tools analyze factors like seasonality, lead time, local events, and real-time demand to recommend optimal rates.
These third party pricing tools take hours of work off the plate for rental property managers, and most consider them essential for efficient channel management. Explore Uplisting integrations to learn about your options.
If you want to price your Airbnb property manually, you should use a healthy mixture of both the market-based and cost-based pricing models. First, use the cost-based pricing model to figure out the bare minimum you can charge per night and not lose money. Now you have a number in your head that you know you should never dip below (unless for discounts or last-minute offerings).This establishes your price floor and ensures you're not operating at a loss even during off-peak seasons.
Then, you can use the market-based pricing model to assess your property based on location, property type, amenities and quality, to determine an accurate price range for your Airbnb rental property. This range gives you an idea of how much profit you can make per month off your property, assuming you are booked every night of the month. Using both models allows you to look at the whole picture of your property, and adjust the price accordingly.
Remember that pricing varies significantly by location—properties in North America typically command higher rates than the global average, with premium destinations like Manhattan or Miami Beach often doubling the regional averages.
If you are a property manager supervising many Airbnb properties at once, a third-party automated pricing tool may be your best option. Automating your pricing can save you a significant amount of time, allowing you more free time to manage your properties. New hosts might start with manual pricing to understand market dynamics, while experienced hosts managing multiple properties typically benefit more from automated tools. Scan the features associated with each pricing tool, read reviews, and determine the right pricing tool for your rental property needs. Based on the reviews from Airbnb's smart pricing users, this pricing tool is not recommended for hosts seeking to maximize revenue.
One straightforward approach is cost-based pricing, which covers your monthly expenses before factoring in profit. To find this baseline, add your mortgage or rent, utilities, and other fixed costs, then divide by 30. Dynamic pricing tools also help you layer in seasonal and market factors to boost revenue. Once you know your minimum, compare it with similar listings in your neighborhood for a reality check. Aim to stay profitable without pricing yourself out of the market.
Airbnb’s 25 rule restricts younger guests—specifically those under 25 years old—from booking entire homes in certain areas if they lack a solid track record of positive reviews. The goal is to reduce unauthorized parties and protect hosts from potential property damage. Hosts should review Airbnb’s guidelines to see if this policy applies to their market.
You can manually set nightly rates in your Airbnb account, or rely on third-party solutions. Dynamic pricing tools automatically adjust your price based on demand patterns and seasonality. If you prefer more control, you can log into your Airbnb dashboard, navigate to Pricing, and adjust each day’s rate on the calendar view. Whichever approach you choose, be sure your base rate aligns with your monthly costs so you’re never operating at a loss. For added flexibility, consider tweaking your prices for weekends, last-minute bookings, or longer stays to stay competitive.
Airbnb typically charges hosts around 3% per booking under its split-fee structure, but this can climb to 14% or more if you use a ‘simplified pricing’ model. The exact percentage varies based on factors like cancellation policies, host location, or additional services you offer. Some hosts roll these fees into their nightly price for transparency. It’s always wise to confirm your exact fee structure in your Airbnb account.
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