How to set the price for your accommodation

With Sinistar, you have full control over the price of your accommodation for each rental. That being said, there are steps to maximize your income and limit your losses.

The 5 steps below will help you set a price for your accommodation:

If your price does not cover all your expenses, you will lose money renting your place out. Start by totalling all your expenses related to your home and its rental.

Basic expenses

Of course, you must include expenses that are related to the accommodation itself. For example:

• Mortgage or rent

• Property and school taxes

• Insurance

• Maintenance

• Recurring expenses

Expenses specific to temporary rental

To host guests, your accommodation must be fully furnished and equipped. This generates extra expenses like:

Very few temporary accommodations are rented 100% of the time. To prevent off-peak periods from eating into your profits, it’s better to plan ahead.

The proportion of time that the place is vacant is called the “vacancy rate”. For housing rented on a yearly basis, you can estimate it at 25% (all platforms included). In other words, expect your accommodation to be vacant 1 week out of 4 (or 3 months per year).

This means that over a month, you must reach your break-even point in 3 weeks instead of 4.

By dividing your break-even point by 3, you get a weekly price floor. Multiply it by 4 to know your monthly price floor. You will need it to complete the next step. Example

Say your break-even point is $2,000/month. To reach this amount in only 3 weeks of renting, you must charge $667 a week (i.e., $2,000 ÷ 3 weeks). If the accommodation was rented for a full month (or 4 weeks), you would then earn $2,668/month ($667 × 4).

Now is the time to add your profit margin!

We recommend aiming for 7 to 20% of your monthly price floor. You can use this minimum and maximum to establish your price range.

Example

Here’s what you get with a price floor of $2,668/month:

• Minimum

  $2,855/month (i.e., $2,668 + 7%). The profit is then $187/month.

• Maximum

  $3,202/month (i.e., $2,668 + 20%). The profit is then $534/month.

Why a price range?

It allows Indeed, the number of rental offers on Sinistar fluctuates over time. For example, there may be more in the spring, when snowmelt causes flooding. Or in the winter, when house fires are on the rise due to the use of space heaters and to overloaded electrical circuits.

When you rent through Sinistar, a service fee is deducted from the total amount of the contract. To prevent this fee from eating into your profits, adjust your price range accordingly.

Example

Say the service fee is 3% for a given rental offer. If your minimum price were $2,855/month, it would now be $2,941/month ($2,855 + 3%). And if your maximum price were $3,202, it would now be $3,298/month ($3,202 + 3%).

Great! You now have a definitive price range. Now, how do you know what price to ask for when? For this, you have to follow the market.