Things have gotten quite a bit more complex in the short terminal world.

We have a million more tools than we used to have.

We have a million more settings to help adjust our property and our pricing and our listings.

A lot of those we’ve gone over in recent podcasts, but I want to break down one this week just for you to double check.

And that is our minimum price, because gone are the days where we should only have one minimum price for a property.

In fact, I would argue that you probably need three.

So stay tuned, we’re going to break that down this week.

Welcome to Short Term Rental Riches.

We’ll discuss investing in real estate, but with a specific focus on short term rentals.

Quick, actionable items to acquire, manage, and scale your portfolio.

I’m your host, Tim Hubbard.

Well, welcome back to the show.

I’m glad you’re here.

If you’re new to the channel, my team and I have been managing properties in lots of different cities and lots of different states for years now.

Tens of thousands of guests, including guests in my own portfolio.

And I’m excited to share our insights.

We’re learning a lot.

And one of the things we’re learning a lot about is revenue management.

And I know that a lot of people are out there, there’s a lot of good resources.

It really becomes a rabbit hole.

And the reality is that people dedicate their careers to revenue management.

So if you’re already using a tool like PriceLabs, for example, well then you’re probably like 80% of the way there if you’ve adjusted your settings well and you know what to look for.

But we wanna do better than that, right?

10% increase in our revenue year over year.

I mean, that adds up to a lot, right?

So all that to say, we no longer just have one minimum price.

I know that if you’re setting up your property on Airbnb, yes, there’s a minimum price.

If you’re on PriceLabs, yes, there’s a minimum price.

But I’d argue that you need more than one.

And so before we get into the additional two, you’ve gotta ask yourself what your absolute minimum price should be.

And now depending on what price point your property’s at, if you’re at a really low end range, well, you could risk getting some bad guess.

But I say could because we can do a lot to protect our properties these days.

A lot of things that we’ve talked about on this channel, vetting our guess.

And so I wouldn’t let your minimum price deter you.

I would first set up all of these things to make sure you’re getting good guess, and then lower your price down to an absolute minimum.

Remember that absolute minimum is generally going to be to capture some very last minute reservations to fill up those little gaps in your calendar.

But we should be getting the majority of our bookings out a little further than that.

So first, just make sure you’ve taken a good look at your minimum price.

And how do we really determine what our minimum price should be?

Well, we always want to look at market data, right?

We’ve got to have something to compare to.

We recommend PriceLabs.

We’re not sponsored by them or anything like that, but they have some market dashboards and some ways to really look at your pricing.

So the second minimum pricing set that you should have is a minimum price during the week versus a minimum price on weekends.

And so a lot of times we just set up one minimum price, but you might have a property in a market that has drastically different occupancies and prices during the weekend and during the week.

So of course your dynamic pricing tool is gonna account for this a little bit, but it might not be getting you all the way there.

We see properties in some markets that drop as low as 10% occupancy during the week, and then they’re really high on the weekends.

They’re just weekend markets, right?

And so you need to know that, and you need to make sure that your price is being adjusted accordingly.

You do have a nice little handy feature in PriceLabs where you can just adjust the premiums by creating a discount or a premium for weekends or weekdays, but you really don’t wanna set that up until you know what you’re comparing your property to.

So you wanna make a comp set, you wanna see what prices you can actually achieve during the week.

Because if we’re a weekend only market, then that might mean that we get 40% occupancy throughout the year.

Let’s just assume, hypothetically, you’re a weekend only market, and you can book up every week in the whole year.

Well, maybe you’re gonna be able to get to 40% occupancy, right?

But if you’re able to get an extra 10% during the week, or expand those weekend reservations, so it’s no longer just Friday, Saturday, Sunday, and you can add a Monday on there, you can add a Thursday on there, by heavily discounting those prices, if you need to, then that’s really gonna boost your overall revenue.

So that is the second set of minimum prices that you definitely need to have.

That’s a minimum price during the week, and then a minimum price on the weekend.

The third set of minimum prices that you really should have in place are for specific dates, potentially specific seasonality, or events.

And so we wanna know these ahead of time, obviously.

And again, if you’re using a dynamic pricing tool, most of these things are going to be adjusted for you a little bit, but sometimes you could be leaving a lot of money on the table.

Or maybe someone’s booking five nights during a big event when it should be seven nights.

I know my property down in Brazil, where I am right now, during New Year’s, it’s crazy here.

And there’s like, the city goes from like 250,000 people, like over a million.

My neighbor literally told us when we were getting back here earlier this year that the traffic was so bad because so many people had come into town, the street right in front of our home that goes to the ocean was so backed up with traffic that people literally left their cars there and went home because so many people had come in.

And so all that to say is that during New Year’s, this place is crazy and people book it for crazy prices, but also for a really long period of time.

And so I believe we had someone in here for like two weeks, and I could have just as easily rented to someone for five days or one week.

And so by making sure that your minimum night settings are set up appropriately by events and by holidays and by seasonality, you can make sure you get the maximum occupancy, maximum revenue.

And how do you know this?

Again, just take a look at your comp sets and you can see average booking lengths during certain periods.

I know some of this gets a little advanced, but honestly, you can go to PriceLabs and you can search booking lengths by booking window.

So how far out in the future people are booking a period of time and for how long that period of time actually is.

And so until next week, hopefully you’ve got these minimum prices set up.

Remember, if you’re a weekend-only market, then you really wanna keep a good eye on those during the week prices to make sure you’re not overdoing it and leaving some occupancy on the table.

Until next time, I hope you have a fabulous week and we’ll see you back here soon.

If you’ve been listening to the podcast for a while, then you know that I’ve been managing my properties virtually for years and years.

My team and I have managed thousands of guests.

We’ve learned a ton and I’m really happy with the progress and the growth we’ve made.

In fact, we’re now big enough to help manage your properties as well.

Our team has a ton of experience from the inner city apartment to the large lakeside retreat.

We’ve worked with all types of properties across the nation.

We’ll help to take the management workload off your plate while earning top revenue and excellent guest reviews, all while charging an industry low fee.

If you’d like to find out if your property fits with our program, just head to strriches.com.

There you’ll see a property management button.

Again, that’s strriches.com.

Just click on the property management button, and we look forward to chatting with you soon.