The following video transcript is generated automatically by a computer algorithm that learns and gets better on a daily basis. Please accept our apologies if some content below doesn’t make sense:

Pricing. How do you smartly price your portfolio to maximise your income? Now a lot of the platforms that you’re going to be offering these properties on will offer their own smart pricing tools, LBB, for example. If you let it will set the price of your property dependent upon the competition on the platform for equivalent properties. And the demand that’s available on the platform at that time. But be aware that these platforms don’t necessarily have the same incentive structure as you. They’re interested in maximising occupancy as far as possible, maximising throughput. They make money on the fees. When people use these properties and that’s not necessarily best for you, you want to you want your pricing to maximise the income and profit for you on these properties, not necessarily just to maximise occupancy. So you want to be setting your own price as far as possible. Now, a common way to start setting a price for a property is to take into account your costs and your mark-up. So a typical formula could go something like you look at how much because you rent the property in the first place. What your operations costs are. What the commercial costs are. What the administration costs are on, what your mark-up is. And then take all of those together. Divide it up by the amount of occupancy and availability. And then you’ve got your sort of target price for a property the way you price. And things like deposits are going to vary depending upon what kind of occupancy model that you’re offering. Short term deposits is going to vary by the number of bedrooms. One big property you’re looking at a deposit of around 250 pounds that you want to ask for to bed 350 pounds and three bed five hundred pounds. The strategy here is you’re looking to net 20 to 25 percent greater income than you would if you rented this property out on a long term basis. Now. Obviously, the pricing for short term rental is very volatile, is very dependent upon news and events and competition, so things that are happening in the local area. Cauvin, 19, comes along and decimates the market. New competition opens up in the area or competition goes away or some great local event occurs, which means you can demand more for it. That speaks to the seasonality. Oftentimes, the amount of money that you’ve charge for a property is going to be very seasonal. There are going to be high peaks and low troughs. And your pricing for your short term rentals are going to need updating daily, ideally twice a day. You want to be staying ahead of the demand and the competition. For medium term strategy, your deposit is going to be on the order of like a month’s rent. You’re looking this strategy is going to you’re looking to make 15 to 20 percent of the baseline of long term rental. Again, this price can be somewhat volatile based upon news events and competition. You’re talking about more about corporate market here. So there might be a hotel that suddenly does a deal. There might be a new conference that opens up in the local area. Things that can make the price swing up and down again. Seasonal conference season is a classic thing. And this is something that’s going to need weekly updates from you. So the pricing here, you don’t do it quite as often as this, but you want to be updating this on a weekly basis, ideally long term rentals. Your deposit is going to be on the order of two to three months worth of the rent, ideally for this one. Well, you want to do is you want to look at what the historic benchmark price of the property is or equivalent properties. Take that as your baseline and then adjust it. By inflation. Obviously, inflation will have gone up in the two or three years since the historic prices were there. Make sure you’re adjusting to at least match with inflation or if not, beat it. This sort of pricing strategy is less volatile, so you don’t need to adjust it so much. You still need to take account of competition and news and events and things like that. But it’s going to vary a lot less. With shorter term issues and problems, these people who are mainly looking for somewhere to call home. So it’s going to be longer term swings and roundabouts of news and events, which is going to affect demand and price the most.
Share This