hello hello youtube this is richard
founder of short-term rental secrets
.com and Airbnb super host today's video
is arguably the most important video
we've ever made so important in fact
that I want to encourage your feedback
in comments and it will encourage future
videos and new iterations and it's all
about pricing how should you price your
home on Airbnb or Vrba
so before we get into the strategy the
most important thing you can do right
now and like do it because so many
people don't and they think they're
going to come back to it and then they
don't do it you're leaving tons of money
on the table is get signed up for one of
the dynamic pricing tools Airbnb has a
suggested pricing built-in I don't
personally recommend it I actually use
beyond pricing I'm a big fan of it I
have a video where I've interviewed the
founder and I highly recommend it it's
put tons of money in my pocket and
everyone else all of my clients that
I've recommended it to love it so for
ease I've put a link in the description
go ahead and click on it sign up for it
now and let's now start talking about
strategy here's the strategy you want to
price below everybody else when you
first launch so that you get bookings
you want to get bookings in exchange for
five-star reviews and I had no problem
and I suggest to all of my clients that
they go out and tell people listen
you're getting a great deal it's below
market we're well aware of that we want
to make sure that you have a great
experience and you give us a great
five-star review
plant the seed you're exchanging a
discounted price for a five-star review
because you're growing your business now
by giving away the property again on a
relative level by discounting the
property hopefully you get some bookings
immediately and you get started you want
to get at least five five star reviews
and then I want you to raise the price
now this is a little bit subjective and
there's no right or wrong way of doing
it so you need to understand what the
market was and how much you discounted
but I want you to get five five star
reviews and I want you to increase your
price by 25 to 50 percent and
see what sort of activity you get at
that new price point so now you're in
the phase that I considered a testing
mode you're going to need at least five
more five-star reviews ten is even
better but you need at least five more
and you need to figure out what the
demand looks like at this new price
point if you get five hits really really
quickly you know you have room to grow
right you're still priced below market
and you kind of want to start to
incrementally test and keep bumping you
want to try and figure out what the
market will bear and then ultimately you
need to figure out where you sit on the
efficient frontier and that's a economic
theory that basically says there's an
optimal set of solutions based on like
zero rentals to fully rent it and low
price to high price and you want to find
a place on that efficient frontier and
it's a very personal decision as to
whether you would rather have bookings
every single night at a lower price
point and so like that's what you do in
your business or you'd rather have the
holdout really high price and you're
willing to take like total vacancy it's
a totally different perspective and it's
a very individual decision I can't make
that decision for you but personally I'm
cool with about 60 to 70 percent
occupancy rates at a premium price point
I'm okay with the property sitting
vacant for you know 25 to 35 percent of
the time because I'm making more than
that on the nights that I actually rent
I have other clients of mine that say no
I want 30 nights out of the month rented
I'll lower my price I just want it fully
rented always neither one is better than
the other it's a very personal decision
but you need to play with that you need
to see how same-day turnovers work for
you you need to work with your cleaning
crew you'll figure out sort of where you
sit on that spectrum and then I want to
make sure that once you know where you
sit on that spectrum you're getting the
most money you can every single night
that you are booked and that's where
that dynamic pricing tool will help you
as well
once you have enough five-star ratings
and you're approaching super host status
or once they decide that you are a super
host you have the ability now to go for
what I would call premium pricing and
now go ahead and make an experiment and
try and charge another say twenty five
to fifty percent more and see what
happens if it doesn't work out you can
always lower your pricing that's one of
the beautiful things about this is that
it's an experiment no harm no foul
and I just need to say this because this
is really important I learned this the
hard way it's not set it and forget it
once you figure out what that threshold
is that doesn't mean it doesn't change
you can continue to test up and you can
continue to test down because there are
new entrants every single day all right
so to reiterate what I said at the
beginning this is such an important
video there's no way I could possibly
capture all the subtlety in the nuance
and all the questions that I hope you
have this is really just a shot across
the bow it's the opening you know of a
very large conversation it's going to
improve with all of your comments and
your feedback and your questions so
please go ahead and do it if you found
this helpful go ahead and like it
actually scratch that smash the like
button right now and please subscribe
share this with everybody there's so
much to be done here so that we all
improve and we have our pricing proper
and we're making more money and by
subscribing to the channel I really
appreciate your time and interest and
we're doing this for one reason which is
to make you a better host and put more
money in your pocket so thank you very
much have a great day
happy hosting and I'll see you soon
you