Price prediction using machine learning techniques: An application to vacation rental properties

Abstract

Pricing is a subjective process that highly depends on person. There is no general rule to price a house. That is why there is both overpriced and underpriced rental houses in rental listings in websites such as AirBnB. In order to reduce the effect of subjective pricing, a general machine learning model is built in this project to make more objective price predictions. In the literature, there are different machine learning models to make numeric predictions. Physical features of houses are used as an input to make inferences about the price of a house. These machine learning models can identify the relations between features and the price and make the predictions with respect to features of a new listing house that has not been priced before. In this project, six different machine learning models are developed. These are linear regression, ridge regression, support vector regressor, random forest regressor, light gradient boosting machine regressor and extreme gradient boosting regressor. The performances of all models are compared, and the best model is selected for hyper-parameter tuning to make more accurate predictions.