Hi @Ellen104!
First, although I technically have smart pricing turned on, I pretty much ignore and override all the time. I think the spart price system suggests ridiculously low prices in order to attract guests to airbnb from other sites. Once they use Airbnb, they are more likely to keep using it. I have seen other people on this forum complain about this pricing system. I always take a look, but reset the minimum for sure.
I just do some market research. Take a look at similar listings to yours, keeping in mind proximity to transportation and attractions as well as what your listing is like. Of course, these prices will vary, but it will help you get a good idea for roughly what will work in the neighborhood.
In the beginning (at someone else's suggestion), I started a bit lower than those prices. The thinking was that since I didn't have reviews at the time, it would help to get some people in the door (it did). Then, after I had a few reviews, and some other bookings, I started to inch the price up to market rates.
