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How to price a unique property

I have a converted school bus (40ft) on 2 acres (our house is also on the property) that I am about to Airbnb. I am trying to figure out the best pricing for it but struggling as there is not another unique property in the immediate vicinity. There is another bus about 30-40 minutes away and is located on the same grounds of a motel. Do I consider it for competitive pricing? It is 200 a night. Do I start lower to try to get a following up? In my immediate area the prices go from 90-400 a night. We are just coming off high season ( in Australia) and are getting into wet season which will last for a couple of months. I live in a touristy area so I am not sure how much wet season impacts the area. Smart pricing seems to give it a low price. Around 80 a night. Help, please. I have no idea where to start. Thanks

If smart pricing says $80 a night, you can probably get a lot more. Try smart pricing plus 20-25% to start and see what happens. If you get lots of bookings, increase the rate more.

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Start by doing your sums. Calculate the cost of running your business for a year. Remember to factor in everything. Ask your accountant to help with this if necessary. You might need him / her to calculate for you things like depreciation of your goods used in the rental and how much to allow for wear and tear.

Add in your own time, your local taxes, permits, your STR insurance, vehicle (if used in the business), consumables, office stuff, maintenance, utilities, bank fees, specialist repairs (electricians and so on), professional services, contingencies, advertising, purchases, employee wages and a whole lot more.

Once you’ve got that lot sorted out, work out what you reasonably expect your occupancy per year to be and then divide figure one by figure two to get your nightly rate.

This should get you started. You’ll probably make plenty of adjustments as time goes on but that will give you a good starting point. Don’t worry too much about what others are charging.

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Are you able to get insurance on that style of accommodation?

I would assume Airbnb insurance will cover me? No? The bus itself is insured as it is roadworthy but not insured for renting out.

I am just getting around to reading my VRBO newsletter, this is from the 2020 Travel Trends report.

Good news for us. Thanks

Do not count on Airbnb’s insurance or guarantees unless you have a high risk tolerance. I don’t have separate insurance but I have high risk tolerance and a small room attached to my home.

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Ahh no!
You will now be running a commercial business from your principal place of residence. You need to check what this will do to your capital gains tax exemption, your council ( do you need a DA) and your household insurance policy will NOT cover it!

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Thanks. I will check with my local council. I also have a granny flat that will be airbnb’d in the future so it is best that I get it right.

AND INSURANCE! You may be very surprised

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Looking into that right now

No. The so called Airbnb insurance is pretty much an advertising tool for them. I’m not saying that it doesn’t exist at all and that no-one has ever ever claimed on it but to assume that you’re covered is simply incorrect.

You’ll need to get proper STR insurance and it won’t be cheap.

Don’t be tempted to think that you can get local permits and STR insurance ‘later’ - that is just tempting fate. Truly, don’t ever think ‘it won’t happen to me’.

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We always make sure we are well insured when possible. I am looking into it right now. Many people rent their caravan out so there must be some sort of insurance that covers them. I will find it.

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Just be sure that you get STR (short term rental) insurance. Regular home insurance won’t do the job. It’s a lovely feeling to know that you’ve done everything properly and that everything is insured. :slight_smile:

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We already have home insurance on the bus as we were living in it. I am looking for str. Yes, want to make sure I do everything right as I want to do this with a flat (located on the same property) as well. If they are popular enough. Hoping the renovated school bus is different enough to be an attraction.

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The issues is not only STR, but whether they will insure the bus as an STR.

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That’s correct. That will be my challenge

There is someone in my city, in the US, that rents out a VW van. Part of their deal is that they will park it wherever you’d like (or you can drive it if you have the right car insurance and can drive stick), like a state park campsite or something. They seem to price between $150 and $180 which is similar to a 2-bedroom smaller apartment in the same city for “regular” season (neither high or low). I’m not sure if this helps but it sounds kind of similar. Your school bus sounds cool :slight_smile:

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AirBnB’s so called Host Guarantees are neither insurance nor guaranteed, You need insurance to cover it as a rental, especially if it can be started and driven.

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