Setting the right price for your short-term rental (STR) is crucial for maximizing profitability while maintaining competitive appeal. This guide explores various factors including market trends, location, and amenities, offering insights to help you determine the optimal pricing strategy for your property.

How Much Should I Charge for Rent in My STR?

Effective STR pricing balances profitability with making the listing attractive to guests, factoring in seasonality, events, and market demand​​.

STRs can earn significantly more than long-term rentals by adjusting prices to capitalize on high-demand periods​​.

Regular analysis of market trends and comparable properties is essential for setting competitive rates​​.

Utilizing dynamic pricing tools and understanding critical metrics like occupancy rate and ADR can help you find the right pricing strategy.

Local regulations and operational costs heavily influence STR pricing decisions and overall profitability​​.

Many property investors new to short-term rentals (STRs) struggle to find a pricing ‘sweet spot’ that balances guest satisfaction, occupancy, and profitability.

The dynamics of STRs differ significantly from traditional long-term rentals, with various factors shaping rental prices. However, with the right tools and knowledge, rental property owners can prioritize profitability while remaining attractive to potential guests.

A rent calculator is a useful tool to see what you might expect to earn. Such projections may take into account costs, guest appeal, and market trends. However, it's equally important to understand HOW these calculators generate their numbers so that you can adopt an appropriate pricing strategy.

Know exactly how much to charge based on your vacation rental pricing strategy.

8 Key Factors For Your Short-Term Rental Property Pricing 

Determining the right rental price for a short-term rental is a multifaceted process influenced by several key factors. Understanding these elements is crucial for setting a price that is both competitive and profitable. 

Here's a closer look at the factors influencing rent prices:

1. Short-term vs Long-term Rental Considerations

STRs, which typically include vacation rentals, are often priced per night and are subject to more frequent fluctuations in pricing. This variability is primarily driven by seasonality, local events, and even short-term changes in market demand. 

For example, a beachfront property may command a premium rate during the summer but see reduced demand and lower prices off-season. Short-term real estate investors have the advantage of adjusting rent prices more frequently. They can capitalize on high-demand periods while remaining competitive during slower times. That’s why short-term rentals can be an excellent long-term investment with the right tools and knowledge.

On the other hand, long-term rentals usually involve longer lease agreements (often 1+ years) and fixed rental prices. These rental rates are less influenced by short-term market fluctuations and more by long-term market trends. Long-term market trends include demand for housing in the area, the average income of residents, and overall economic conditions. Long-term rent prices are generally set with the aim of providing steady, predictable income over the duration of the lease.

Setting prices for short-term rentals offers more flexibility. However, it's important to be aware of local rent control laws, especially if you're considering transitioning a property from long-term to short-term rental. Rent control laws, which are primarily applicable to long-term rentals, set a cap on how much landlords can increase rent annually. They can significantly impact your return on investment if you're operating in a jurisdiction with strict rental regulations.

Local and global events, economic shifts, and changes in travel patterns all affect rental rates. A property in a city hosting a major international event might temporarily increase rates due to more demand. Economic downturns or travel restrictions can lower demand and require hosts to set lower rates to attract guests. 

It’s important to regularly conduct a thorough rental market analysis. AirDNA has actually identified 17 trends that are expected to impact the pricing strategy of short-term rental properties in 2024.

Looking for insights into your own local market conditions? Learn more about how AirDNA helps vacation rental managers get ahead with data. 

Analyzing comparable properties is a fundamental part of rental market analysis. 

Concentrate on comparable rental properties—ones that closely resemble yours in terms of features and appeal–when determining the right rental rate for your property. 

A broad overview of the 400+ rentals in your area can offer some market insights. However, examining 40 properties that closely match yours in square footage, location, and in unit amenities will provide a more accurate and relevant benchmark for how much rent to charge.

This focused approach helps filter out the 'noise' — data from properties that aren't directly comparable to yours. Looking at very different properties might skew your understanding of the market. You’re better off looking at similar rentals to get a more accurate picture of the market rates. 

For example, consider two-bedroom properties in your downtown area. If these similar properties fall within a specific price range, aligning your rent price with this range can maintain competitiveness without undervaluing your rental. Essentially, you need to look at properties that guests would consider as alternatives and craft your pricing strategy from there. 

To dive deeper into this concept and learn how to effectively analyze comparable properties in your market, explore AirDNA's guide to custom comps.

Your property’s features can justify higher rental rates in a lot of cases. A property with a recent renovation, high-end appliances, or a unique design can attract higher-paying guests. 

Similarly, features like additional bathrooms, a patio, or even an electric car charger can add to the rental’s appeal. Welcome baskets, virtual tours, and iconic themes can also offer added value to guests.

Amenities can vary greatly between properties and may even be the deciding factor for guests. The right amenities can actually increase your occupancy rate and average daily rate (ADR). 

Occupancy rate refers to the number of nights that your property is booked compared to the total number of nights that it’s available. The ADR is how much rent is paid by the guest during the length of the reservation. We talk more in depth about these metrics later in the article.

Use Smart Rates™ to optimize your pricing strategy.

Rates typically increase during high tourist seasons or special events and decrease during off-peak times. 

Once you’ve set your base rate, consider high demand vs. low periods. Higher demand periods allow you to raise your average daily rates (ADR) because it’s more likely that listings will sell out during those times. This allows you to charge more for your listing.  

The chart below shows daily demand for the U.S. throughout 2023. 


The data shows that there are two peak periods of demand, during the summer and then during the holiday season. Between these two periods, the demand is generally lower. However, there are still some considerable spikes during holidays. There are a few trends that stand out: 

Holiday periods: There are 7 national holidays where demand is higher as guests look to take advantage of the time off. 

Seasons: Demand is strongest during the summer, indicating that it’s typically a period where ADR earning potential is high. The lowest demand, also known as the off season, is often between Thanksgiving and Christmas and in January. It’s a time for property owners to lower rates to attract guests that travel during non-peak periods.

Days of the week: The overall occupancy rate for short-term rentals in the United States is 66.4% on Saturdays vs. only 45% on Mondays. There’s just nothing like taking off for the weekend. 

Need help preparing for peak season? Check out AirDNA's guide to getting your Airbnb ready for high demand periods.

Your pricing should cover all costs associated with running your STR. This includes not only obvious costs like mortgage or rent payments, maintenance, and utilities but also less apparent ones like insurance, marketing expenses, and any applicable service and cleaning fees. Set a price that covers these expenses and allows you to make a profit.

Understanding how regulations can impact your STR helps you make more informed pricing decisions.

Local laws and regulations can determine whether you can rent your property short-term as well as your rental prices. Some areas have regulations regarding the number of days a property can be rented out, or specific tax implications for STRs, which can affect your overall pricing strategy.

Even standard rent control laws can shape the rental landscape. While these laws are typically more relevant to long-term rentals, they can indirectly affect the STR market. In areas with stringent rent control laws, there may be less long-term rentals available. This potentially increases the property value and demand for short-term accommodations. 

AirDNA’s vacation rental pricing tool uses data-driven recommendations to propose the best daily rates.

Use ADR and Occupancy Rates to Refine Your STR Pricing Strategy

Mastering your pricing strategy hinges on understanding two critical metrics: occupancy rate and Average Daily Rate (ADR).

The occupancy rate, the ratio of booked nights to the total available nights, is a key indicator of demand for your property.

ADR is the total revenue divided by the number of booked nights. The resulting number gives you the average revenue earned for each night that a property is rented. This metric captures the typical income per booking and it reflects your property's positioning in the market in terms of pricing. 

A higher ADR might deter guests and lower occupancy. A lower ADR could increase occupancy but decrease total revenue. The right price sets a balance between attracting guests and maximizing profitability.

While there are many factors that can influence ADR’s for short-term rentals, the number of bedrooms is particularly impactful. Based on data collected by AirDNA in 2023, your ADR goes up the more square footage dedicated to bedrooms. 

Of course, you can’t just add a bedroom or two very easily into an existing property, but this is something to consider if you’re a real estate investor looking for the best property for your short-term rental investment. 

Now it’s time to translate the factors that we’ve explored into actionable pricing strategies.

Setting the best price for your STR investment property is a combination of art and science. It involves understanding the market and using analytical approaches to arrive at an accurate rent estimate. It also factors in the unique value of your property. There are several ways to calculate how much rent to charge for your vacation rental: 

The 1% rule is a classic, quick benchmark used by many real estate investors. It states that a property's monthly rent should be at least 1% of its purchase price. For instance, if the initial property value and purchase price was $300,000, you should aim to charge at least $3,000 per month. 

While this rule is more commonly applied to long-term rentals, it can offer a baseline for your STR investment property. It’s especially useful for those transitioning from long-term to short-term renting. However, it's important for property owners to adjust this baseline according to the specific dynamics of the short-term rental market. Take into account higher occupancy rates, seasonal demand, and the additional costs associated with furnishing and maintaining an STR.

Rental Comps (Comparable Market Analysis)

Using rental comps involves analyzing rental rates of properties similar to yours in the same geographic area. Look at the average rent price for properties with similar features, such as the number of bedrooms and bathrooms, amenities, and overall condition. If your property is a two-bedroom beachfront condo, you would look at the rental rates of similar condos in the same beach area. 

This method helps ensure that your pricing is competitive. What you charge should be in line with local market conditions and what guests are willing to pay for similar properties in your location.

Dynamic pricing tools recommend optimal pricing using algorithms to analyze large sets of data. The data includes market trends, seasonality, local events, and even weather patterns. This method is particularly useful for responding to rapid market changes, such as a spike in demand due to a local event.

AirDNA's dynamic pricing automates your pricing for you with the best data out there. AirDNA has five years of industry-leading historical data on more than 10 million vacation rental properties globally. We consistently estimate Airbnb’s actual revenue with at least 94.9% accuracy, and our Q1 2022 estimate was 99.3% accurate. Essentially, you’ll know you’re priced right—every night. 

AirDNA's Airbnb Calculator gives you a tailored rent estimate, helping you to maximize your occupancy and revenue. We use over 10 million Airbnb and Vrbo listings to accurately predict the earning potential for any property worldwide.

Why Rental Pricing in Real Estate Investment Matters

The process of determining rent prices is a crucial part of real estate investment, whether you use a rent calculator or do the calculations yourself.

Your pricing strategy affects more than your immediate rental income. It has long-term implications for your investment property's overall success and sustainability. 

Underpricing: While setting a low price might attract more bookings, it could also mean leaving money on the table. Consistently underpricing your rental undervalues your property and can even create a perception of lower quality.

Overpricing: Conversely, overpricing can lead to decreased occupancy rates. Potential guests might opt for more competitively priced alternatives, leading to a loss in revenue. Extended periods of vacancy reduces rental income and can also negatively impact the property's standing on rental platforms. Frequent bookings and positive reviews are key drivers of visibility.

Impact on Cash Flow: Pricing also directly affects cash flow. If rental income doesn’t cover ongoing expenses, it could lead to financial strain. 

It's not enough to just cover your costs or match your competitors' rental prices. Property owners need to be aware of the ever-changing nature of the market and adjust your pricing strategy accordingly. 

The good news is that there’s technology that can automate this complex process for you. AirDNA's Vacation Rental Pricing Tool automatically adjusts your prices based on the current market demand, helping you to maximize your occupancy and revenue. See our dynamic pricing tool in action here.

Your pricing strategy should be as unique as your rental property.

Unlock higher STR earnings: Master dynamic pricing, cut through market noise, and strike the perfect balance between appeal and profit.

How Much Should I Charge For Rent in My STR?

fluctuations and more by long-term market trends. Long-term market trends include demand for housing in the area, the average income of residents, and overall economic conditions. Long-term rent prices are generally set with the aim of providing steady, predictable income over the duration of the lease.

Setting prices for short-term rentals offers more flexibility. However, it's important to be aware of local rent control laws, especially if you're considering transitioning a property from long-term to short-term rental. Rent control laws, which are primarily applicable to long-term rentals, set a cap on how much landlords can increase rent annually. They can significantly impact your return on investment if you're operating in a jurisdiction with strict rental regulations.

2. Market Trends

Local and global events, economic shifts, and changes in travel patterns all affect rental rates. A property in a city hosting a major international event might temporarily increase rates due to more demand. Economic downturns or travel restrictions can lower demand and require hosts to set lower rates to attract guests. 

It’s important to regularly conduct a thorough rental market analysis. AirDNA has actually identified 17 trends that are expected to impact the pricing strategy of short-term rental properties in 2024.

Looking for insights into your own local market conditions? Learn more about how AirDNA helps vacation rental managers get ahead with data. 

Learn about Dynamic Pricing

3. Comparable Properties

Analyzing comparable properties is a fundamental part of rental market analysis. 

Concentrate on comparable rental properties—ones that closely resemble yours in terms of features and appeal–when determining the right rental rate for your property. 

A broad overview of the 400+ rentals in your area can offer some market insights. However, examining 40 properties that closely match yours in square footage, location, and in unit amenities will provide a more accurate and relevant benchmark for how much rent to charge.

This focused approach helps filter out the 'noise' — data from properties that aren't directly comparable to yours. Looking at very different properties might skew your understanding of the market. You’re better off looking at similar rentals to get a more accurate picture of the market rates. 

For example, consider two-bedroom properties in your downtown area. If these similar properties fall within a specific price range, aligning your rent price with this range can maintain competitiveness without undervaluing your rental. Essentially, you need to look at properties that guests would consider as alternatives and craft your pricing strategy from there. 

To dive deeper into this concept and learn how to effectively analyze comparable properties in your market, explore AirDNA's guide to custom comps.

4. Property Features and Characteristics

Your property’s features can justify higher rental rates in a lot of cases. A property with a recent renovation, high-end appliances, or a unique design can attract higher-paying guests. 

Similarly, features like additional bathrooms, a patio, or even an electric car charger can add to the rental’s appeal. Welcome baskets, virtual tours, and iconic themes can also offer added value to guests.

5. Amenities

Amenities can vary greatly between properties and may even be the deciding factor for guests. The right amenities can actually increase your occupancy rate and average daily rate (ADR). 

Occupancy rate refers to the number of nights that your property is booked compared to the total number of nights that it’s available. The ADR is how much rent is paid by the guest during the length of the reservation. We talk more in depth about these metrics later in the article.

Try Our Vacation Rental Pricing Tool

Use Smart Rates™ to optimize your pricing strategy.

Try here for free
6. Seasonality

Rates typically increase during high tourist seasons or special events and decrease during off-peak times. 

Once you’ve set your base rate, consider high demand vs. low periods. Higher demand periods allow you to raise your average daily rates (ADR) because it’s more likely that listings will sell out during those times. This allows you to charge more for your listing.  

The chart below shows daily demand for the U.S. throughout 2023. 


The data shows that there are two peak periods of demand, during the summer and then during the holiday season. Between these two periods, the demand is generally lower. However, there are still some considerable spikes during holidays. There are a few trends that stand out: 

Holiday periods: There are 7 national holidays where demand is higher as guests look to take advantage of the time off. 
Seasons: Demand is strongest during the summer, indicating that it’s typically a period where ADR earning potential is high. The lowest demand, also known as the off season, is often between Thanksgiving and Christmas and in January. It’s a time for property owners to lower rates to attract guests that travel during non-peak periods.
Days of the week: The overall occupancy rate for short-term rentals in the United States is 66.4% on Saturdays vs. only 45% on Mondays. There’s just nothing like taking off for the weekend. 

Need help preparing for peak season? Check out AirDNA's guide to getting your Airbnb ready for high demand periods.

7. Your Costs

Your pricing should cover all costs associated with running your STR. This includes not only obvious costs like mortgage or rent payments, maintenance, and utilities but also less apparent ones like insurance, marketing expenses, and any applicable service and cleaning fees. Set a price that covers these expenses and allows you to make a profit.

8. Local Regulations

Understanding how regulations can impact your STR helps you make more informed pricing decisions.

Local laws and regulations can determine whether you can rent your property short-term as well as your rental prices. Some areas have regulations regarding the number of days a property can be rented out, or specific tax implications for STRs, which can affect your overall pricing strategy.

Even standard rent control laws can shape the rental landscape. While these laws are typically more relevant to long-term rentals, they can indirectly affect the STR market. In areas with stringent rent control laws, there may be less long-term rentals available. This potentially increases the property value and demand for short-term accommodations. 

Market-Informed Pricing Decisions

AirDNA’s vacation rental pricing tool uses data-driven recommendations to propose the best daily rates.

Try here for free
Use ADR and Occupancy Rates to Refine Your STR Pricing Strategy

Mastering your pricing strategy hinges on understanding two critical metrics: occupancy rate and Average Daily Rate (ADR).

The occupancy rate, the ratio of booked nights to the total available nights, is a key indicator of demand for your property.

ADR is the total revenue divided by the number of booked nights. The resulting number gives you the average revenue earned for each night that a property is rented. This metric captures the typical income per booking and it reflects your property's positioning in the market in terms of pricing. 

A higher ADR might deter guests and lower occupancy. A lower ADR could increase occupancy but decrease total revenue. The right price sets a balance between attracting guests and maximizing profitability.

While there are many factors that can influence ADR’s for short-term rentals, the number of bedrooms is particularly impactful. Based on data collected by AirDNA in 2023, your ADR goes up the more square footage dedicated to bedrooms. 

Of course, you can’t just add a bedroom or two very easily into an existing property, but this is something to consider if you’re a real estate investor looking for the best property for your short-term rental investment. 

Methods To Calculate Your STR Price

Now it’s time to translate the factors that we’ve explored into actionable pricing strategies.

Setting the best price for your STR investment property is a combination of art and science. It involves understanding the market and using analytical approaches to arrive at an accurate rent estimate. It also factors in the unique value of your property. There are several ways to calculate how much rent to charge for your vacation rental: 

The 1% Rule

The 1% rule is a classic, quick benchmark used by many real estate investors. It states that a property's monthly rent should be at least 1% of its purchase price. For instance, if the initial property value and purchase price was $300,000, you should aim to charge at least $3,000 per month. 

While this rule is more commonly applied to long-term rentals, it can offer a baseline for your STR investment property. It’s especially useful for those transitioning from long-term to short-term renting. However, it's important for property owners to adjust this baseline according to the specific dynamics of the short-term rental market. Take into account higher occupancy rates, seasonal demand, and the additional costs associated with furnishing and maintaining an STR.

Rental Comps (Comparable Market Analysis)

Using rental comps involves analyzing rental rates of properties similar to yours in the same geographic area. Look at the average rent price for properties with similar features, such as the number of bedrooms and bathrooms, amenities, and overall condition. If your property is a two-bedroom beachfront condo, you would look at the rental rates of similar condos in the same beach area. 

This method helps ensure that your pricing is competitive. What you charge should be in line with local market conditions and what guests are willing to pay for similar properties in your location.

Get nightly rate recommendations

Dynamic Pricing

Dynamic pricing tools recommend optimal pricing using algorithms to analyze large sets of data. The data includes market trends, seasonality, local events, and even weather patterns. This method is particularly useful for responding to rapid market changes, such as a spike in demand due to a local event.

AirDNA's dynamic pricing automates your pricing for you with the best data out there. AirDNA has five years of industry-leading historical data on more than 10 million vacation rental properties globally. We consistently estimate Airbnb’s actual revenue with at least 94.9% accuracy, and our Q1 2022 estimate was 99.3% accurate. Essentially, you’ll know you’re priced right—every night. 

Automatic Rent Calculator

AirDNA's Airbnb Calculator gives you a tailored rent estimate, helping you to maximize your occupancy and revenue. We use over 10 million Airbnb and Vrbo listings to accurately predict the earning potential for any property worldwide.

How much can I make on Airbnb?

Why Rental Pricing in Real Estate Investment Matters

The process of determining rent prices is a crucial part of real estate investment, whether you use a rent calculator or do the calculations yourself.

Your pricing strategy affects more than your immediate rental income. It has long-term implications for your investment property's overall success and sustainability. 

Repercussions of Inaccurate Pricing
Underpricing: While setting a low price might attract more bookings, it could also mean leaving money on the table. Consistently underpricing your rental undervalues your property and can even create a perception of lower quality.
Overpricing: Conversely, overpricing can lead to decreased occupancy rates. Potential guests might opt for more competitively priced alternatives, leading to a loss in revenue. Extended periods of vacancy reduces rental income and can also negatively impact the property's standing on rental platforms. Frequent bookings and positive reviews are key drivers of visibility.

Impact on Cash Flow: Pricing also directly affects cash flow. If rental income doesn’t cover ongoing expenses, it could lead to financial strain. 

Get the Price Right Without Guesswork 

It's not enough to just cover your costs or match your competitors' rental prices. Property owners need to be aware of the ever-changing nature of the market and adjust your pricing strategy accordingly. 

The good news is that there’s technology that can automate this complex process for you. AirDNA's Vacation Rental Pricing Tool automatically adjusts your prices based on the current market demand, helping you to maximize your occupancy and revenue. See our dynamic pricing tool in action here.

How Much Should I Charge for Rent in My STR?

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