Latest / Thanks For Visiting / 213. Hosting Hotline: Pricing Your Property For Mid-Term Stays

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213. Hosting Hotline: Pricing Your Property For Mid-Term Stays · Thanks For Visiting

• 0:10
  Sarah Karakaian: [00:00:05] You are listening to the Thanks for Visiting Podcast. We believe hosting with heart is at the core of every short-term rental. With Annette's background in business operation—
• 0:17
  Annette Grant: [00:00:14] And Sarah's extensive hospitality management and interior design experience, we have welcomed thousands of guests from over 30 countries, earning us over $1,000,000 and garnering us thousands of five-star reviews.
• 0:24
  Sarah Karakaian: [00:00:28] We love sharing creative ways for your listing to stand out, serve your guests and be profitable. Each episode, we will have knowledgeable guests who bring value to the short-term rental industry--
• 0:31
  Annette Grant: [00:00:39] Or we will share our stories of our own experiences so you can implement actual improvements to your rentals. Whether you're experienced, new or nervous to start your own short-term rental, we promise you'll feel right at home.
• 0:38
  Sarah Karakaian: [00:01:03] Welcome back. My name is Sarah Karakaian.
• 0:45
  Annette Grant: [00:01:06] I am Annette Grant. And together we are--
• 0:52
  Both Sarah & Annette: [00:01:07] Thanks for Visiting.
• 0:59
  Sarah Karakaian: [00:01:08] And this is an AMA episode. It's Ask Me Anything. If you head to thanksforvisiting.me, F-O-R, in the upper right-hand corner is a red button that says Ask TFV. You can ask a question for us to consider to answer on air like we're going to do right now.
• 1:06
  Question: [00:01:27] Hi, Sarah and Annette. My name is Sharon Huckle and my Instagram handle is @WindroseDestinations. I have four short-term rental properties, and this is a slow season for me because I'm in Canada. And just wondering if you had any insight on how best to price your services for mid-term stays. I already do dynamic pricing with PriceLabs as per your suggestion, but midterm pricing strategies stumped me a little bit, and I would appreciate any insight you have. Thank you.
• 1:13
  Sarah Karakaian: [00:02:00] Awesome. We've got some insight.
• 1:20
  Annette Grant: [00:02:02] Hi, Sharon.
• 1:27
  Sarah Karakaian: [00:02:04] Sharon, the kind I was.
• 1:34
  Annette Grant: [00:02:05] I like hearing people's voices and crushing it with your four short-term rentals. Congrats. Well, let's talk about it. Let's figure out the numbers for you. I mean, we're not going to figure them out for you, but we're going to give you some insight.
• 1:41
  Sarah Karakaian: [00:02:17] Some ideas.
• 1:48
  Annette Grant: [00:02:17] Yes. Yeah, exactly.
• 1:55
  Sarah Karakaian: [00:02:19] I just want to congratulate Sharon on using PriceLabs with her dynamic pricing. But when you move into a midterm stay, which if you haven't heard of that term, it really is anything over 30 days. It moves into a midterm stay and dynamic pricing really isn't helpful then, because dynamic is really answering to the market as it is today. Like, is there a show in town? What's going on in your area that might affect pricing? Just like with an Uber their surge pricing because everyone wants a car during rush hour. So the same thing with short-term rentals, but it's not helpful with midterm. So let's help her out with midterm. So we've got some friends in the industry who only do midterm rentals and they've got some rules. Now rules are meant to be broken. And these rules, I don't know why they set these rules. For them, it makes sense. They're business, Sharon. So you want to make sure that what we're about to say would make sense for you. But a lot of them say they need to make at least $1,000 a month after all their expenses for it to make sense for them. If they don't make $1,000--
• 2:02
  Annette Grant: [00:03:22] You mean above and beyond?
• 2:09
  Sarah Karakaian: [00:03:23] Yes.
• 2:16
  Annette Grant: [00:03:24] That's actually pretty high, honestly.
• 2:23
  Sarah Karakaian: [00:03:25] I do, too.
• 2:30
  Annette Grant: [00:03:26] Because we're not going to be making that on our midterm stay.
• 2:37
  Sarah Karakaian: [00:03:27] Well, and that was my next question or my next statement was going to be for us-- so, listeners, we are recording this in December right now, heading into January, February, March. I know our historical here in Columbus and it is a scary, bleak place to be at this time of year. And so for us, I told Annette as a cam, looking at our numbers, I'm looking at our circles, I want to at least be able to pay our expenses plus we make sure that our cleaner gets in there. I want to make sure that our numbers are covered.
• 2:44
  Annette Grant: [00:03:57] Yeah, so it's more of a break-even scenario.
• 2:51
  Sarah Karakaian: [00:04:00] Well, we will cash flow $600.
• 2:58
  Annette Grant: [00:04:02] Right. But that's the baseline of like, hey, can we break even? So our biggest suggestion here is knowing your whole entire year's worth of numbers and then backing into it that way and not just taking it like month to month because who knows, maybe you want to-- again, Sharon has four properties, so does she just want to cover the expenses on all of them or can she get 50% of that? It's really understanding your financial situation, what the whole year revenue is going to look like for the year. I know inside of our membership, we have our Numbers Hub. And at the bottom of every month, there might be a month or two or three or four that are in the red, but you have others that are so profitable that pales in comparison. It doesn't matter. You're prepared for that.
• 3:05
  Sarah Karakaian: [00:04:50] Sure.
• 3:12
  Annette Grant: [00:04:51] So, Sharon, I think the key is understanding what you can handle. I would never go underneath long-term unfurnished market rent prices. I think that's a great place to start, is like, what's a unfurnished rental 30 days plus look like in your area? Because you're giving at least that and plus so much more because you're giving them flexibility. So I think you can add on for the flexibility and then you're also giving them fully furnished. So that's another add-on that you can make. And then you're most likely covering all of the utilities. So I would start baseline there too looking at your competition in the long term, the long term unfurnished and then stepping up from there.
• 3:19
  Sarah Karakaian: [00:05:36] Well, and we'll give you a little extra here on this episode. So Annette mentioned in our membership we have something that is very coveted by our members. It's called our Numbers Hub, and it is a really great way for you to nail down your pricing no matter how long a guest is staying-- one night, two nights, three nights, a year, who knows? Whatever it is for you. And how we do that is we figure out the cost of the reservation. And that's going to change depending on how long a guest could potentially stay. So here are some things that you want to consider when figuring out what your expenses truly are. You want to know per stay how much are you spending on the wear and tear of your linens in your property? So is this guest bringing their own linens or are you providing them? Are you providing them enough to change every couple of weeks? So figure that out for yourself. Laundry. So are you going to be doing any laundry for them while they're there? Maybe not, but I'm going to dial that in. You could put a zero there. Cleaning. We like to get our cleaner in there for several reasons. Number one, what this midterm guest might consider clean might not be what you consider clean. And if you want to hop back into the short-term game after they leave, you want to make sure that stuff is on point during their stay.
• 3:26
  Annette Grant: [00:06:45] So one of the surprises.
• 3:33
  Sarah Karakaian: [00:06:47] No. And what does that price look like for the cleaner to do that? Consumables. Are you offering any home consumables at time at all? Are you stripping them of anything that's consumable? That's a question. Your time. So we always like to consider your time. And then, of course, your fixed home expenses and your business expenses. So figure out what all those are and then that's how much your property is. It's not just your mortgage, it's not just your insurance. It's that plus all those other things that are going to be like the utilities, the water, the Wi-Fi, all those things that you're going to have to pay for.
• 3:40
  Annette Grant: [00:07:20] And here's a deal. Don't beat yourself up if you don't have the correct number right out of the gate. I've had long-term guests and I totally screwed up the numbers. That's why we have our Numbers Hub now. I've actually paid for people to stay. But again, at least trying it, trial and error. I'm always for that. Success is reached on a pile of failures. So at least start working on the numbers, see what the market can command. You might be able to find some amazing mid-term guests that help you cover it all.
• 3:47
  Sarah Karakaian: [00:07:52] And one more time. It's worth repeating like Annette said. Annette may have paid for a guest to stay. But I know she was crushing it during our high season. So if you look at your property holistically, even though it cost you, let's say, $2,000 in your expenses for that month, if you can bring in 1,800 for a well-qualified guest and you know, holistically, you're still going to crush it throughout the year, I would take that 1,800 dollars and pay for $200 for the guest to stay.
• 3:54
  Sarah Karakaian: [00:08:21] So there's a lot of talk out there about like if I don't make this much money, then it's not worth it. But what are your goals? What do you need? What does it look like holistically?
• 4:01
  Annette Grant: [00:08:32] And is it worth it to you too also having people in your home and not having a vacant home sitting there? There's a lot of intangibles too. This is the one thing I wholeheartedly believe is that a spreadsheet does not always tell the full story and doesn't. But especially is a good place to start. It's a really great place to start.
• 4:08
  Sarah Karakaian: [00:08:48] So I hope that was helpful.
• 4:11
  Annette Grant: [00:08:50] Sharon, Let's do this.
• 4:15
  Sarah Karakaian: [00:08:51] Let us know how it goes. And listeners, if you have any thoughts about midterm stays, if you've cracked any certain codes or just want to like, say, heck yeah, or you girls are Crazytown, feel free to DM us on Instagram.
• 4:22
  Annette Grant: [00:09:01] No, don't DM that. I'm crazy. I don't need that. I don't need that in my life.
• 4:29
  Sarah Karakaian: [00:09:04] Okay, with that, I am Sarah Karakaian.
• 4:36
  Annette Grant: [00:09:06] I am Annette Grant, and together we are--
• 4:43
  Both Sarah & Annette: [00:09:08] Thanks for Visiting.
• 4:50
  Sarah Karakaian: [00:09:09] We'll talk to you next time. Thanks for listening to the Thanks for Visiting Podcast. Head on over to the show notes for additional information about today's episode. And please hit that subscribe button and leave us a review. Awesome reviews help us bring you awesome content. Thanks for tuning in and we look forward to hanging out with you next week.