13 Mar 2019by Admin

How to determine the price for your short-term rental

How to determine the price for your short-term rental

In short or long-term rental we always end up with the same question: what is the price to charge for my accommodation?

There are several factors that will influence the price of your short-term rental. Let’s start by determining if you want to rent a room or an entire space.


Finding the right price for a short-term rental is not an easy task and so there are several software tools that analyze the typology and location of each space by combining these factors with the seasonality and data accumulated over several years as well as with the prices of others accommodation in the same area. However these software tools have a cost that for those who have one or even ten short-term rentals becomes little compensatory. Nevertheless this will be the easiest and closest way to get the right price.

For those who can’t or want to invest in these software products we indicate some steps and ways that you can use, to get an idea of ​​the base price with which you can work.

1 – Search the market

Start by using one of the online rental platforms you usually use to advertise your space or plan to use it. For example Airbnb or HomeAway. Put yourself in the place of guest and look for accommodations in the same area as yours. Be sure to look for features similar to yours, number of rooms and guest capacity. If you have not set dates, the listing will show the accommodations that are in your area and surroundings. On one hand you get an idea of ​​the number of competitors for another will be more difficult to find a price that works according to the time of year.

Record the prices that your competitors practice, at least the 2 to 3 pages of results.

If you are on the Airbnb platform, you will notice that ads with Super Host status are more relevant and the prices shown will be on average higher than those that do not have this rating.

You now have a perspective on the prices practiced in the market and therefore with more information to decide the price to be charged. However, seasonality should be taken into account, ie there is usually a low season where there is less demand for rental and a high season where demand is more intense and therefore the price should adjust, being lower in the season of lower demand. The area where your accommodation is located will define whether or not this seasonality applies, for example if your space is in an area near beaches, you will certainly find a greater demand in the summer season in detriment of the other seasons.

On the other hand, if your short-term rental is in a cosmopolitan area with several easy accesses and that serves several types of guests, whether they are business travelers or tourists, this seasonality probably does not make sense and therefore the price variation is not directly linked to the time of year.

2 – Check prices on different days

The price to be charged must be correlated with the occupancy rate of your accommodation so that its profitability is maximized and you are not losing opportunities to make more money.

Hotels are experts in this field, and you should have noticed that prices vary according to the day of the week,

if you book on Friday and Saturday you get a higher rate than if you preferred other days of the week.

This is related to the occupancy rate, because they know that in those days there is a greater demand and therefore they can apply a higher price.

Check if your area is the same, look for the hotels that exist and see what rates you get on different dates. Try to avoid festive dates as they tend to have higher prices. If these vary, you already know that you can apply the same effect to the price of your accommodation.

3 – The factor occupancy rate

Now that you have one more data to decide on the prices to apply to your accommodation, we add the factor occupancy rate. The time that your accommodation is occupied will determine this rate. The ideal should be 85% in the first 15 days. The following table indicates the ideal rates according to the time horizon of your calendar in order to obtain an optimization of yield:

Days to
90-180 10%
60-90 20%
30-60 30%
15-30 60%
1-14 80 +%

This means that if you have more than 25% of days booked in more than 3 months then you should increase your prices.

However, if you only recently entered this activity, you probably do not have enough history or reserves to enter this factor into the price decision. Refer to the analysis of your competition pointed out at the beginning of this e-manual. As your space is recent on the platforms and you want to have the highest occupancy rate possible, it is advisable to charge a price lower than similar accommodation in your area. This way you will be able to quickly fill in the vacant days and simultaneously get more reviews about your space. It is an advantage in these online platforms as these give preference in search results to properties with greater number of opinions and potential guests as well.

On the Airbnb platform, when you acquire super-host status, your ad will appear in the first places of search and on the other hand it will tell you that you can charge a premium price, as guests prefer spaces that they know will always have a 5 star service.

If you do not have the competition to analyze, then you are to be congratulated because you have the opportunity to earn money. Post a price and see if you get reservations. Look at the amount of searches in which your ad was presented to a potential guest, most of these online platforms have a page inside your account where you can find this information. If there is demand then you are on the right track.

Now that we have given you the various exogenous factors that can influence the fair price decision to practice for the rental of your accommodation, you should analyze the part related to the costs associated with the lodging, to the part that depends on you.

4 – Identify all costs

Point out all the expenses you will incur with each stay, from the monthly fee of the internet to the cleaning and hygiene products for the guests, as well as the ones you will have to use to clean your space. Remember the other costs that do not occur with the stay but that should take into account, namely, insurance for the activity of local lodging and property,

Your time, dedicated to the promotion of your listing, in giving answers and information to  potential and future guests, in the reception and departure of the guest, in the cleaning and maintenance of the space, in the reporting to the official entities about stay and guests (SEF and tourist fees).

If you work for others and do not do the short-term rental your main activity, it is important to have someone who assures this service and therefore you have to consider it in your list of costs. Your price will have to be the one that can pay these costs and still leave a profit margin for you.


To get the price to practice for the rental of your accommodation in the form of a room, you can follow the indicated steps for the entire space. What you will have to consider is whether the room will be shared or not, if the guest can have access to the kitchen, bathroom and living room or other common areas, as they are decisive factors for a correct evaluation when comparing with the competition.

5 – Long Term Rentals

Often the owners of this type of accommodation use the long-term lease as it ensures a steady income and avoids having multiple guests over time, drastically reducing the costs of hosting.

Is your accommodation close to any university or hospital? Students, teachers or nurses who are relocated to work or studying are the guests who should look for this type of lease.

So look for your competitors and see the price you can afford. There are those who share their own housing, others offer a whole space and consider renting all the rooms, what is called an apartment / shared space. In the first option, the price you can afford per room will be slightly lower than the second, but you will probably have less cleaning and maintenance costs. There are also those who rent a shared room, that is, a room for more than one guest, being able to offer several rooms in this situation, the designated Hostel. As a rule number of guests determines the price charged for these situations.

Another factor to take into account when renting a room,

are the expenses with the consumption of electricity, water and gas. You must decide whether to include in the price to be presented or will be charged later and separately to guest.

From the point of view of the guest, he prefers a price that includes these consumptions. From the owner’s point of view, if it is included in the price and the consumption is higher than estimated, its profit margin will be lower. On the other hand, if you prefer to separate the consumption and present it to the guest, at the end of each month, prepare to justify it with the corresponding invoices and remember to update the meter readings in each monthly cycle so that you do not have surprises with the difference between estimated and actual consumption on each invoice.

Short-term rental management companies are professionals who can help you determine the best price for each situation and indicate the type of lease according to the location. Hostbelieve is present in Cascais, Lisbon and Costa da Caparica.

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