The real beauty of vacation property ownership is that you call the shots for your business. If you feel that the rental demand or property improvements to your second home warrant a price increase, then go for it and raise your rates.

When is the best time to increase your rates for next year?

The best time to increase your rates is before you start booking for the following year. I know it sounds rather simple, but if you wait, you may end up booking now for next year and you'll lose out on the rate increase.

At bare minimum you'll want to evaluate and raise your rates prior to January, which is the start of the busy booking months. But if you would like to get a head start on next year, a good rule of thumb would be to increase your rates after 95% of your current busy season is booked. For example: Say you have booked the entire summer, with the exception of August 19-26. It would be a good idea to raise your rates now. For that one week that's still open, you can advertise a special, “$X off August 19-26” and X would be equal to the amount you raised your rates.

How much should you raise your rates?

Many owners increase their rates 10-20% each year, which seems to be protocol for the industry. Before you simply raise the rates, make sure to compare your rates with other properties in your area (by owner and through management companies) to make sure you are competitively priced. Also, don't forget to evaluate all your expenses before quoting new rates:

• Cleaning fees;
• Charges for amenities: golf, work-out facilities, parking fees, ferry charges, firewood, and any other fees that may apply;
• Local and state sales tax.

Regardless of how or where you advertise your vacation home, you should have some sort of rate disclaimer: "Until confirmed, rates are subject to change without notice." However, I feel it's unprofessional to change a rate after the property has been booked, confirmed and paid.

When do you typically adjust your pricing for the following year?

How Much Should You Charge Friends for Rentals? Information on renting to friends and how much to charge your friends to stay in your vacation rental home.   Don't Lower Your Rates, Raise Your Standards Increased competition in your area? Don't panic and slash your rates. Instead add value.   Determining Monthly Rates for Your Vacation Rental Home A general formula you can use to determine monthly rental rates.   Charging By Night or Per Person Whether you charge by the person or by maximum occupancy often depends on your vacation rental market.

© Copyright, Christine Karpinski 2006, U.081117.LC

Raising Rates for 2009?    Last month we asked vacation rental homeowners about their plans for rates in 2009. Here are the results.