How to Price a Short Term Rental in Broken Bow: Revenue Management Made Simple

Avery Carl [00:00:02]:
Hey guys, it’s your host, Avery Carle with the Short Term Shop. And I’m really excited to dive into the Broken Bow market with you guys. We’ve got 10 episodes on everything you need to know about investing in short term rentals in Broken Bow. A couple notes that I want to give you guys before we get started. Any up to date purchase prices or income numbers on this market you can find on our website, theshortermshop.com and if you’re ready to buy with us in any of the 20 markets that we work in, not just Broken Bow, if you want to work with one of our agents in any of those markets, you can email us at agents the shorttermshop.com be sure to follow us on YouTube and Instagram and Facebook at the Short Term Shop. And of course join our Facebook group. It’s called Short Term Rental Long Term Wealth. It’s just me and 60,000 of my closest friends in there talking about short term rentals all day, every day.

Avery Carl [00:00:50]:
Again, if you need anything from us, you can email us@agentshorttermshop.com let’s dive into Broken Bow. Hey guys. Welcome to episode 10 of the Short Term show miniseries on Broken Boat. Today we’re doing calendars and pricing. Luke is already being really distracting on the camera. So we do have a lot of familiar faces here, one of which is Luke. So I will let him go ahead and introduce himself since he is already being distracting. Go ahead.

Avery Carl [00:01:30]:
Hey.

Luke Carl [00:01:30]:
Hey. I am the host of the Short Term Rental Management podcast. I own the longest running Airbnb in a couple of markets. Been in this business for a long time. I have the honor of teaching every short term shop client ever how to be a better landlord. And I do that through a class called Management Monday, which is free for short term shop clients. Theshortermshop.com where I am the Director of education. Thank you for having me.

Avery Carl [00:01:59]:
Okay, next we have our expert agent in Broken Bow, Kathy Craig. Kathy, say hello. Hey everybody.

Cathy Craig [00:02:07]:
Kathy Craig. Broken Bow, Oklahoma.

Avery Carl [00:02:10]:
And last, another familiar face, Wilson Van Hook. Wilson, you want to say hello real quick and maybe introduce yourself again?

Cathy Craig [00:02:16]:
Yep, I’m Wilson and we own a couple of properties in Broken Bow and things are going really well with that. So we opened up our own management company called Vandell Vacation Rentals. And so now we manage quite a few properties in Broken Bow.

Avery Carl [00:02:30]:
Awesome. So now I’m going to hand the reins over to Luke here. He’s going to drive the calendars and pricing episode. So, Luke, I will let you take it over from here.

Luke Carl [00:02:41]:
Sure, sure. Yeah. Let’s talk seasonality. What is the average 12 month calendar look like? Are there periods of time in the year where people are not coming or are we pretty busy all the time?

Cathy Craig [00:02:51]:
It’s busy all the time. Yeah, busy all the time.

Avery Carl [00:02:54]:
All the time.

Cathy Craig [00:02:54]:
And a lot of it has to do with we have a lot of couples business.

Avery Carl [00:02:58]:
We have a lot of one bedroom cabins and do a ton of small family and couples. So they’ll come, you know, January, February.

Cathy Craig [00:03:06]:
I mean it’s, it’s an all year round place. Yeah, it is all year round. You know, I know there are some beach markets out there for instance that you know, they are completely dead in the winter time. We’re not like that. You know, at least, at least for, you know, occupancy will go down in some months and rates will go down in some months, but people are visiting the market all year long.

Luke Carl [00:03:28]:
What would you say are the slower, you know, occupancy months and how would that compare, say on like a two bedroom cabin, like if I can I get, can I get 90% in a busy month and then what percentage in a slow month and what month is that?

Cathy Craig [00:03:41]:
So the popular months are March is a good month because we get spring break and Oklahoma and Texas now they usually split their spring break on two different weeks. So that’s good for our market because you’ll get some people visiting on spring break from Oklahoma on one week and then Texas on the next week. And then in the summertime, obviously we’re very busy. The summer is the best time of the year. So June, July are really good. And then about half of, half of August before people start going back to school and then we’re in the best time of the year right now. October, November and December are absolutely glorious in this market. They’re amazing.

Cathy Craig [00:04:24]:
We get really high occupancy, high rates and that. And that’s for all cabins now in the busy months, even, even the largest cabins can run up to 90% occupancy and.

Luke Carl [00:04:38]:
Okay, so sounds to me like I’m hearing the school months or the, where it slows down a little bit like May, September, we need to kind of pay a little more attention to those. But not, still not too bad.

Cathy Craig [00:04:49]:
Yes. The, the, the slowest months of the year would be January and February after people go back to school. And then April’s pretty slow and September, September’s really slow.

Luke Carl [00:05:00]:
But we’re still going to get guests. We got, we just have to try a little harder in those months.

Cathy Craig [00:05:04]:
Exactly. Yeah. And there, there will be some, some days during the week that occupancy market wide is 5% or lower. For bigger cabins, for instance, the small, you can still rent out weekdays any time of year. The one bedroom cabins in particular, you can rent out any, any calendar day on the entire year. There’s going to be people visiting.

Luke Carl [00:05:26]:
Okay, great. Yeah, I have a video on this called the season, the, the circle of seasonality, which it sounds like your market stands up with most of the best vacation rental markets nationwide as far as, you know, pretty high occupancy year round, which is what a lot of people are, are looking for. You mentioned Kathy, smaller properties, you do have larger properties, I would assume. And what’s going to be the difference in booking the bigger one versus the larger one?

Cathy Craig [00:05:57]:
Yeah, so for, for smaller cabins, like I said, we can run, you know, you can do over 90% occupancy for the one bedroom cabins. 90 to 95% year round, year round as a whole, for the year.

Luke Carl [00:06:11]:
And it’s really hustling though, right? I’m not just some average Joe off the street coming out 95%. As somebody that’s paying attention, listening to podcasts and really putting in the effort, I would assume.

Cathy Craig [00:06:22]:
Yeah, exactly. Yeah. So you have to, you have to do the work, you have to put in the time to get to that occupancy. You have to be paying attention to the calendar and you have to have all of your, you know, dynamic pricing settings set up correctly. You’ve got to be willing to drop down the rates on some of those last minute, you know, weeknights that, that nobody has booked your calendar yet. But if you, if you implement all of, you know, the, the best practices, you can get to, you know, even all the way up to 95% occupancy for the entire year, that the two cabins that we own ourselves are one bedroom cabins. And it’s because I like high occupancy. I like the security of somebody on any particular day I could book this cabin.

Cathy Craig [00:07:04]:
Whereas, you know, a five bedroom cabin. There are days in the year that there’s just literally nobody visiting the market on, you know, a Tuesday in the middle of January. So I like the high occupancy. So I prefer the, the one bedroom cabins myself.

Luke Carl [00:07:20]:
I agree with you. I like them too. They are, they’re, they’re meat and potatoes. You just don’t, don’t really have to worry about them. They’re always there for you and, and you can pretty much guarantee they’re fairly Easy to book in most cases. That being said, I am going to play devil’s advocate sometimes those bigger ones, it’s, it’s nice to not have to work so hard, but it is a little more stressful, especially if you’re just kind of starting out to think, oh man, there’s a good chance that this thing is not going to get booked in these dates or maybe the early weekdays, Monday, Tuesdays of certain weeks. And that can be a little stressful for a newer investor or maybe somebody who is, you know, a little, maybe lower net worth type of an individual. That can be stressful.

Luke Carl [00:08:04]:
But I, I do like the bigger cabins because they give me a little bit more breathing room occasionally where I don’t have to work as hard. But that being said, you do have more warm bodies in the reservation. There’s, there’s ups and downs there. We’re not here to talk about cabin size, but just be aware that the bigger the property gets in, in, in any good vacation market, the occupancy is going to go. I hate to say occupancy goes down, but it does, you know, so it’s, it’s definitely a sliding scale. A lot more one and two person groups out there than there are 14 person groups, you know, so it’s really just kind of common sense. Do you have any issues booking early weekdays or midweek days? And again, is that going to be size of property specific?

Cathy Craig [00:08:52]:
Yeah, that would, that would definitely depend on the size of the property. You know, like I said. So the, the smaller cabins, any, any particular day you can book that even, you know, what happens is the two bedroom cabins and the three bedroom cabins will end up competing against one bedroom cabins on dates that aren’t popular. And so for those properties, if you’re willing to drop your rates down a little bit and try to incentivize people to stay at your two or three bedroom cabin, you can also compete against the one bedroom cabins on some of those weekdays. Now the, the four to five bedroom cabins are going to run somewhere around probably 60% occupancy. And they’ll do, they’ll do, you know, you know, 90% in the summertime. So that tells you how slow some of the other months can be to, you know what you’re saying, where there are times where you can be pretty hands off and you know, you, you don’t have to manage but maybe a few weekends, you know, here and there.

Luke Carl [00:09:52]:
Absolutely. So, so in other words, when we ask about, you know, talk about how long the season is, it’s basically. But you’re gonna need to focus on January and February a little bit more and of course May and September a little bit more to make sure that you’re getting in there. You don’t want to get lazy. Of course, you can’t get lazy in any market on any type of property. You gotta get in there and change your prices. If you’re just stumbling on this podcast for the first time and this is your first experience with short term, we would highly recommend that you don’t stay stagnant, change your listing as much as possible and, and pricing as well. And pricing is vastly important, you know, in other words, a lot of folks will say prices are too high.

Luke Carl [00:10:35]:
You hear that constantly, your prices are too high, your prices are too high. But there’s a lot of other stuff you need to be looking at before you go straight for the low hanging fruit of changing the prices. That’s kind of at the bottom of the bottom of the pyramid in my eyes. Whereas you can move your headline and your description and other such values of your home and your property or even remodel a bathroom, you know, of course that’s expensive, you know, so in other words, if you’re competing against a guy that’s got two brand new bathrooms in a gorgeous kitchen with all, you know, like navy blue cabinets and flat gold hardware, which is all the rage right now, and you’ve got Formica countertops and just, you know, regular wood, pressed wood finish on your cabinets, doesn’t mean you can’t get booked. But your prices are going to need to be, I guess realistic is the right word there. And maybe you didn’t spend as much on that property. That’s another thing to consider. You know, rehabs on kitchens and bathrooms are expensive.

Luke Carl [00:11:33]:
So that’s kind of how we did it in the early days is we would buy a house that, you know, definitely was, you know, a kind of, maybe even all the original stuff in there. And over time you creep those rents up slowly by offering new amenities and doing rehabs. And that’s just rental real estate in general. That’s nothing special with short term. It’s the exact same thing in long term where if you’ve got granite countertops and vinyl floors and your neighbor has rolled flooring and, and black old 20 year old black appliances and you’ve got stainless, you know, just common sense, your house is going to rent for more, you know, so. And again, there’s no reason you need to compare yourself to the crazy over the top house with the giraffe in the backyard for the kids to pet. You know, if you don’t have the giraffe, then your prices are a little lower and there’s nothing wrong with that. You know, there’s going to be, there’s going to be a customer for all different aspects of, of those, you know, those houses and.

Luke Carl [00:12:35]:
Go ahead.

Cathy Craig [00:12:35]:
I was going to say that’s a good thing about our market is we do have a lot of variety. You can be that budget friendly rental or you can be that luxury rental. We have a pretty big variety. So for people looking to purchase a cabin, you can go either way and you can, you can go the route of getting something a little bit older that needs a, you know, a little bit of work and add improvements to it over time as well.

Luke Carl [00:12:56]:
Yeah. Airdna has you at number 17 in, in the US as 17th best vacation rental market, which is very high. You got to understand there’s hundreds and hundreds of these. I think they did that out of 300ish markets. So you guys are, you know, top 20. That’s huge. And there’s a very big draw for many different areas of the world to, to come to hang out with you guys and, and party. So I guess, you know, I’m just going to throw the Enemy method out there because it’s part of our culture here at the shop.

Luke Carl [00:13:28]:
And the, if you’re, if you’re mostly, you know, if you’re concerned on how do I figure out how much to price this thing, how much, what’s my price per night? I always go to the Enemy method, which you can find@encymethod.com it’s a video Avery did ages ago. And it’s basically again, just comparing yourself to your neighbors and your competition, which is why we call them the enemy, because we want to take them down and be better than them. And that’s kind of how I spend the bulk of my, my, my pricing day to day is by just, you know, saying okay. And again, I learned it from long term rental. You go on Zillow. I find what houses are for rent in my little neighborhood. There may only be one or two when it comes to long term, you know, and there’s a lot less you can find out for pricing a long term than versus a short term because it’s, you’re only pricing one, one number for an entire year where in short term you’re pricing 365 different numbers on your calendar. And that’s where things start to get tricky.

Luke Carl [00:14:28]:
But I do want to encourage folks to not drive Themselves nuts there. You know, it’s. Yeah, it’s 365 versus 1. But you know, really the only wrong answer is, is a property that’s not booked. And again, let me go back to the long term thing. And I know this is a completely different thing, but there’s been times where I had a property listed for rent that I had it, let’s say 1500 bucks. Because I, I just, you know, as enemy methoding. And I thought that’s what it was worth.

Luke Carl [00:14:52]:
And then two months goes by and that damn thing’s been sitting empty because I couldn’t get it rented for 1500 bucks a month. So, you know, I could have after two weeks dropped it to 1400 bucks and saved myself like $2,000 or whatever, you know, 14 times 1.5. And. But what we, you know, I think a lot of times what happens is people hold on to what they think their house is going to rent for and then they end up not getting booked and kick themselves in the foot. Really. I don’t know if you can do that. I guess you have two feet, right? But anyway, so in other words, put the asses in the seats. I think Wilson and I agree on that.

Luke Carl [00:15:25]:
There’s multiple ways, multiple strategies, I suppose, for pricing your calendar. I’ve definitely always been an asses in the seats guy, filling that calendar as much as I possibly can. Spend as much time. The bulk of my management is spent on pricing. And then I would say that the next most time consuming for me as far as landlording on short terms is remodeling, rehabs, roofs, kitchens, floors, paint making. Because those things all affect the price, right?

Cathy Craig [00:15:51]:
You know, back to your point about, you know, putting butts in seats, we actually recently experimented with this this past Labor Day. And you know, looking at the data, it shows that we hit market wide like 99 occupancy for labor Day weekend. So we decided to experiment a little bit and hold our rates really high, you know, above just a premium to see if, you know, since, since cabins are going to book literally every single cabin, we’ll just keep holding those rates extremely high and see if somebody will book. And what we found out is, you know, about half of our properties, we ended up having to do what you’re saying kind of comparing to like the long term rental. If you would have just set the rate lower initially, you would have gotten somebody in there quicker and you wouldn’t have lost some revenue. And so we ended up having to drop some of those rates a little bit lower than, than we wanted to kind of last minute. Whereas if we would have just found an appropriate price from the get go that was still a premium rate, we would have booked it. You know, let’s say there’s a cabin that it would have booked for twelve hundred dollars.

Cathy Craig [00:16:58]:
We were holding at fourteen or fifteen hundred dollars thinking that our cabin is going to absolutely book. Well, if it doesn’t then it’s, you know, if you want to play that risk game then if it doesn’t book now, maybe you end up having to drop it down to eight or nine hundred dollars a night last minute because you held out too long. So my preference is just price it at that 1200 initially. Just kind of make sure you’re going to book. It’s still a premium rate, it’s still high and just you know, lock in, lock in somebody on that cabin, lock in that high occupancy and, and that good rate.

Luke Carl [00:17:32]:
Yeah, you bring up an excellent point. That’s an old school short term trick where a lot of, there’s people that do that with every night of the year, not just holidays where they’ll, but let’s take Christmas for instance. They’ll keep Christmas through the roof and then what happens is, is that all the other Christmases book and then you can theoretically get a premium because you were the only one available and there’s people that have been doing that for a long time. And it does, it can work especially if you have tried it for a year or two. Now I don’t personally do that. I agree with, with Wilson. I don’t do that because um, yes you can. Maybe a couple extra bucks doing it that way or like Wilson said, you might end up losing a couple of bucks.

Luke Carl [00:18:13]:
But that’s not my concern. My concern there is just overall management, especially on a holiday guest. Now holiday guests are traditionally a pain in the rear end. And if you’re waiting to the last minute and you’re basically the only property left and your prices are super high because you’re the only property left and you get that high dollar. Now you’ve got an overpriced property, most likely you’ve got a guest that paid an absolute premium for your house and it is the biggest pain in the rear end guest season of the year. So not only do you have a pain in the ass guest because it’s a holiday, these are the type of folks that don’t generally get out of the house that much. The stress is always very high during the holidays. The family’s already arguing with each other and they’re going to find reasons to argue about your home.

Luke Carl [00:19:00]:
But they’ve also paid way more than everybody else. And not only that, but they have also. They’ve chosen the only home that was available and it’s because they took too long and it’s their fault. But had all of the properties been available at that moment that they booked, they probably wouldn’t have picked your house. They only picked it because your price was so high, you were the last one standing. And so it’s. To me, it’s just a recipe for disaster of management and bad review. A little bad review factory to do it like that.

Luke Carl [00:19:29]:
I definitely much prefer to. And again, we’re way in the weeds now. We’re way off on a tangent here, but I much prefer to kind of, you know, have calculated prices. I want to price my property, especially we’re talking about holidays right now to get the best holiday experience for my guests. And I know that the type of guest that books last minute is only picking me because I was the only one available. They’re probably not going to have the greatest holiday and maybe they never have the greatest holiday, but that’s not somebody I want in one of my houses. Anyway. I figured Avery would direct agreed, 100% agree.

Avery Carl [00:20:01]:
So we’ve talked about seasonality, we talked about kind of guess you don’t want it in your houses. Is there any, like. I mean, we touched on minimum and maximum night stay, but I mean, how soon at like, what’s the, the lead time? How soon do we need to start lowering prices? If we’re looking at, okay, you know, we’re in November now, you probably already have the holidays booked, but let’s say we don’t have our Christmas booked yet. How soon do we need to start lowering prices to make sure we get that booked?

Luke Carl [00:20:27]:
Are we sticking with the holidays or is this just any old time of the.

Avery Carl [00:20:30]:
Any. I think any time of the year. I’m just. Because we’re in November right now, that would be the next thing that I’d be looking at. So any, at any point during the year that might be a potential high season.

Cathy Craig [00:20:39]:
I think that for, for holidays you can wait a little bit longer. You know, you can, if you’re, you can probably wait till about a month out for places like, you know, holidays like Christmas that run high occupancy. But then, you know, like to Luke’s previous point that, you know, there are a lot of factors that come into play after that point. You know, once you get down into like the couple week mark for the kind of guests that you’re going to get and the kind of rate you’re going to get. So I think you can hold out till about a month out. Now based on, so talking general, you know, generally speaking, any, for any time of the year for one bedroom cabins and two bedroom cabins you can hold out without having to tank your rate down for quite a, quite a while because lead time is significantly shorter for the smaller cabins. And it’s probably like this in most markets. But for one bedroom cabins, if you’re not, if you’re still there, there are open dates only a couple weeks out on your calendar.

Cathy Craig [00:21:40]:
You, there’s still a great chance you’re going to end up booking that cabin. For larger cabins you really want to stay ahead of things. And if you get down to the, the point where it’s, you know, a month out, it’s probably time to really start focusing on that pricing and crank it down over that next week to try to get that place booked so you’re not within the two to three week mark. Because like we talked about before, there aren’t a lot of, it’s hard to get a group of 16, 14 people together and coordinate a trip so they’re booking further out in advance. You can wait, you know, it’s probably time to start monitoring those rates about a month and a half out for the larger cabins and really start paying a little bit of attention and, and tear it down a little bit. And then if you hit a month out and you’re still not booked, I think that next week is probably pretty crucial to really, really focus on that, pay attention to that rate and try to get that, you know, that property booked. So another thing that we do, this is a little trick that you can do for our market. We are more of a weekend market than a week long market.

Cathy Craig [00:22:47]:
So what we do on our calendar for far out dates is we will put three night, four night minimums on weekend days because otherwise it’s very easy to get two night bookings on Friday, Saturday there are, there are so many groups traveling and they’re just going Friday, Saturday. So if your dates are far out on the calendar, you don’t want months in advance to get a two day booking. And now you’ve got all weekdays open, particularly for, for the larger cabins because like we talked about it, it’s not, it’s not impossible to get weekdays booked out for small cabins, but larger cabins you want to try to get a three or four day booking on a weekend if possible to tack on some of those days that, you know, a Thursday or a Sunday probably will not end up booking otherwise, especially in the slow season. So those are some tricks that we kind of do. And then probably about when you hit about 45 days out, it’s time to just go ahead and do go down to two night minimums for the weekends if you haven’t booked yet.

Luke Carl [00:23:51]:
Yeah, well, you know, Airbnb has a statistic. 90% of all vacations are booked 30 days in advance or less. And if you’re brand new, fresh to this, and not the kind of person that wants to drive yourself absolutely insane, because there are a lot of people out there that do want to do that, I would just stick to that. I like my calendars to be. I used to like them to be about five or six weeks booked, and then Covid happened in. People’s travel routines got completely changed and they’re still a little bit out of whack. So I’m, I’m back to that just good old fashioned Airbnb statistic, which is again, it’s a worldwide number there. So that’s.

Luke Carl [00:24:26]:
You’re talking about every property they’ve got in the entire world. But I like to be right around that number. And on a smaller property, I’m okay with being, you know, maybe three weeks out, two weeks out as far. What I mean by that is like my calendar is full for the next two to three weeks larger property. I would probably rather have four, maybe five weeks filled.

Cathy Craig [00:24:46]:
I think that’s very accurate. Yeah, that’s where. That’s where we’re at in this market. That’s how we view it for lead time.

Luke Carl [00:24:50]:
Yeah, we should. Summertime 23 has been a little difficult because we used, we got a little, I think we got people, some folks got comfortable with the kind of maybe a slightly further out booked calendar. And summer 23 is when the people could get back on airplanes for the first time, like comfortably. I mean, it’s obviously airplanes have been going on for a number of months and years now since the co. Since COVID the pandemic. But 23 seems like when really everybody kind of said, yo, holy wow, look at this, let’s go get on an airplane. You know, let’s go to Spain, let’s go try something new. Where they were traveling to areas like Broken Bow for two or three years before that.

Luke Carl [00:25:28]:
So the advanced availability did get out of whack a little bit. And it’s as soon as we coming back around. I mean, there was a period over the summertime where I Was having my little properties only booked like two weeks out and it was weird. It’s kind of stressful to be honest. But they did get booked and I am looking at a better overall calendar as far as gross income is concerned for 23 than I, than I had in 22. It’s going to be real neck and neck, which is, you know, it’s more, I’m more than happy with that. I was actually willing to take a little bit of a loss on 23 versus 22 because 22 was so crazy. But all things looking pretty good, I think.

Luke Carl [00:26:05]:
And then we’re ending the year pretty strong. I was looking at my prop. My calendars this morning and just across multiple markets here and I’m a little more booked than I would like to be. But I think just a general rule of thumb, especially if you’re new and again, obviously varies greatly, mostly by size of property and also by time of year. 30 days in advance is, is a great rule of thumb.

Avery Carl [00:26:27]:
All right, so what else have we not covered in relation to pricing and or calendars that we think the listeners could benefit from hearing?

Luke Carl [00:26:37]:
I think we did a pretty good job. You know, I mean, again, just to reiterate my, my deal there is if your calendar is not booked, you’re making a mistake, you are not doing your job. And you know, again, we want to make sure that everybody understands what they’re getting themselves into here. It’s not necessarily a super easy gig. It is a lot of fun. I will, I would argue all day long that my long terms are very often more of a pain in the ass than my short terms, quite frankly. But you know, you are dealing with a lot of personalities on vacation and you got to make sure you’re showing them a good time. I want to throw that out there too.

Luke Carl [00:27:11]:
You know, I love my guests. We want to make sure that they number, they’re number one all the time. They deserve an amazing vacation even when they’re being a pain in the rear end. And I think most importantly is that never let your calendar stay the same. You got to keep moving things around. That’s going to be, that’s going to make your, your property more attractive than, than the next guy.

Avery Carl [00:27:33]:
All right, well, I think that about covers it. So guys, if you’re ready to buy something with Kathy in Broken Bow, you can email us at agents the shorttermshop.com and we’ll get you connected with her. Or if you just want to hang out with us, learn more about short term rentals. You can join our Facebook group. It is the same title as my book right behind me, Short Term Rental, Long Term Wealth. You can hang out with us and 60,000 of our closest friends and talk about short term rentals. Or if you want to talk to us directly, you can do that every Thursday. We have a live Q and A.

Avery Carl [00:28:02]:
You can join that@strquestions.com thanks guys.