With Sinistar, you control the price of your accommodation for each rental. To maximize your income and reduce potential losses, follow these 5 steps to set an effective price:
1. Calculate your expenses
If your rental price doesn’t cover your expenses, you’ll lose money. Start by totaling all costs related to your home and its rental.
💁♂️ Good to know |
Your total expenses are your break-even point, meaning the amount at which you start to make a profit. You should know it so you don’t end up in the red. |
Basic expenses
Of course, you must include expenses that are related to the accommodation itself. For example:
- Mortgage or rent
- Property taxes
- Homeowners Insurance
- Maintenance
- Recurring utilities
❗ Important |
Electricity, heating and high-speed Internet must be included in your rental price. |
Expenses specific to temporary rental
To host guests, your accommodation must be fully furnished and equipped. This generates extra expenses like:
- Subscribed services. For example, streaming or cable services.
- Basic supplies. For example, toilet paper, hand soap, laundry soap and household products.
Cleaning services, even if you clean yourself (budgeting for your time is recommended)
- The purchase of furniture and appliances. It is recommended that you offset the costs over several years.
🔎 For example |
A quality sofa can easily last 10 years. If you just bought one for $2,000, you could add approximately $17/month to your total expenses to offset your purchase. To arrive at this amount, you must calculate $2,000 ÷ 10 years ÷ 12 months. |
2. Consider the risks
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 portion of time your property may be vacant is called the vacancy rate. For medium-term rentals, a common estimate is 25% annually, meaning your home may be vacant roughly 1 week out of every 4 (or 3 months per year).
This affects your monthly break-even calculation. For example, if your break-even point is $2,000/month and you only rent 3 weeks in a month:
🔎 For 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). |
3. Add your profit margin
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.
🔎 For example |
Here’s what you get with a price floor of $2,668/month:
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Why a price range?
It allows flexibility based on market demand. For example:
Spring may see more flooding-related rentals
Winter may have higher demand in areas prone to house fires or storm damage
💡 Helpful tip |
When there is plenty of accommodation available, price is often a deciding factor. To make your bid more competitive, you can then lower your profit margin. When demand spikes again, you can increase your price. |
4. Add service fees
Sinistar deducts a service fee from each rental. To maintain your intended profit, adjust your price range accordingly.
🔎 For 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.