Hi, new to hosting in Melbourne, but not new to hosting. My suggested pricing is consistently below long-term market rental rates. I cannot seem to make it work when accounting for tax, labour, etc. Why would anyone do it?
Do not use the suggested pricing. It is fundamentally flawed if you want to more than break even. There are other pricing tools out there, or you can do you own research and experience to set a fair price that allows you to see some income.
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Thanks Susan, I have seen in be a bit off in the past but here I am seeing it regularly suggest 30% of what is promised as a reasonable expected return elsewhere on the site. Still, it’s possible I am used to much more lucrative markets with more tourists, more demand. Thanks for your help!
smtucker<https://airhostsforum.com/u/smtucker>
October 28
Ggeez:
My suggested pricing
Do not use the suggested pricing. It is fundamentally flawed if you want to more than break even. There are other pricing tools out there, or you can do you own research and experience to set a fair price that allows you to see some income.
My suggested pricing is 2/3rds of what I am getting for days that were booked on non Airbnb sites - the days are blocked and booked but they want lower pricing, makes no sense in my market.
Ignore Suggested Pricing. Spend an hour acting like you want to stay in your area and check out the “competition”. Price yourself according to what others are charging. Same neighborhood but you offer more – charge more…
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Thanks Deb, good advice. I have never seen it been so off kilter. It’s closer to 1/3 of surrounding properties and at a peak time of year in Melbourne Cup, which obviously challenges the algorithms.
Thanks Ken, I have done that now but I also try to introduce a personal overlay: what woukd I be happy to pay? I have I should have gotten suspicious when I started getting suggestions that are less than one entrance fee to the Melbourne Cup, one of the events where you would expect peak demand and for which we are ideally placed, or even less than the average taxi ride there and back. Even doing comparisons, the nightly fees are underwhelming and many top performers in the area seem to have availability.
Melbourne is a VERY big city with very varied areas. Oh and the real estate is VERY overpriced vs VERY under priced Airbnb markets compared to several international comparisons I have done. Accordingly there are areas very popular with tourists where you can charge a reasonable price but others where it is much more sensible financially to rent a property on the long term rental market.
I’m confidant the only way to get the market price is to see what the rest of the market is doing. If you have a better property, add a bit, if they have extras that you don’t, drop your price accordingly.
I’m not sure about your personal overlay, and “what would I want to pay”…you’d want to pay the right price, i.e., the market rate. Not doing anyone any favours by being cheap or expensive compared to your Airb neighbours
Hi Emily, too true. I would have thought my place was in one of the sought-after zones, especially in this season. With rentals returning better and utilities through the roof, medium-term rental might just be an option. Perhaps it’s hello gumtree and bye airby for the forseeable. Thanks!
Yes I think medium term re real might be a better option, the Airbnb rates here are just too low to make a return, unless you’re in flash CBD apartment which we know are not valued highly for resale but give tourists the hotel-like experience.
Where my sister lives in US, not as big as Melbourne but still a very happening city (arguably more), My apartment would cost 25% of the cost here. Airbnb rates are the same- but in $USD so actually 20% more. There you could turn a big profit, here not so at all.
Hi Emily,
I hear you on that! My experience in Europe reflects those sorts of numbers but at least 50% higher rates. Sydney and Melbourne average Airby nightly rates (and yes, what is that and how would you recognize it if you saw it?) are lower in some aggregators than the international average. They are clearly top value real estate markets. Those factors, combined with low tourism numbers favour the medium-to-long rental option. As Airby not particularly good option for this sort of rental, it could be time to change track. Ta!
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