Factors to increase rental prices for AirBnB
Going out of town for a visit is a big event, and where you want to stay is a large part of any trip. If you have rental property on AirBnB, then you could be missing out on value from your property. This article analyses data from a 2017 survey to answer what factors correlate to having your property sell for a higher rate. The analyses done on for this article outlines the best factors for determining if you can charge more for your rental property and what factors negatively correlate to the price.
Part I: What positively correlates to the price of my rental property?
For the price on your rental, the main factors that increased the price of the data was how many bedrooms, bathrooms that the house can have and the review scores for the location of the property. The data shows that location, and square feet account for a lot of the price as well. This doesn’t stray far from the old mantra for what is important to a property “Location, location, location.”
The final information is about if weekend travelers pay higher wages than weekday travelers. Weekend travelers pay on average five dollars more per night than weekday travelers. The distributions have the same mode, and max from the dataset, however, the average, min, and 50th, and 75th percentile are higher on the weekends. This is likely contributed to travelers willing to pay more for a weekend getaway than a week long trip. However, since there are more days during the week than on the weekend, the value is for a fairer price over more days. This combined with the other factors shown in figure 1 help outline the various items that help towards the price of your rental.
The final item that has a positive correlation to the overall score of your rental is square feet of your rental. The dataset didn’t have very much in terms of data for this figure, but Figure 2 outlines how this positively affects your rental price and shows a general upward trend in the price as square feet increases for the rental.
Part 2: What negatively affects prices for my rental?
Many review ratings either negatively affect the price or do not affect the price at all. The attributes that negatively affected the price was the review scores, how many reviews you got per month, what your review scores were at check-in. This could be fixed through various ways at your property by providing incentive to leave a nice review to increase the amount you can charge per night. The incentive can pay dividends in the future.
While a lot of reviews caused negative effects to the rental price, others do not significantly contribute to your rental price. This includes how many listings you have available for rent, and the hosts total listing count. A reasonable deduction for this is that the locations are largely unique, and the amount of listings you have available are independent. The data shows that there is no clear gain for increasing the number of rentals, or focusing on a few rentals would lead to any price gain, other than having more rental properties per night listed and maintaining.
Part 3: Should I worry that my review scores?
Based on the values in the dataset, the answer is no for the majority of review values. There is no correlation to overall review scores to price. Figure 3 shows the overall distribution of the dataset, and shows that there are an overwhelming amount of higher scores for reviews. This means that if there is a review for your rental property then it is likely to be a high value.
The other aspect to consider in the bar chart from Figure 1. This figure outlines that the overall review actually negatively correlates to the price for your rental. This is likely because of the high inflation of higher scores. The only scores that should be worth paying attention to is review accuracy, cleanliness, and location of your rental.
Overall, the three main factors that should be taken away from this article are that the number of bedrooms, bathrooms and the location of the rental make for a higher price. The weekends have a higher overnight rate overall, with a distribution skewed more to the right on the weekends. With the number of days being higher in a week than a weekend, it depends on the availability of the property. Finally, the reviews that negatively impacted the price was review scores after check-in, and number of reviews every month. These factors all accounted for being able to increase prices for your AirBnB property.
With this information, is there something that you can pull away from this article to increase your rental price? How can you improve your review scores to increase the price of your rental? Are you able to put the location up for rent on the weekends? This is your time to decide and increase your nightly rate of your rental!
To see more of the analysis provided, my GitHub link for the analysis of this dataset can be found here.