1. Occupancy estimation is a commonly used tool in ecological studies owing to the ease at which data can be collected and the large spatial extent that can be covered. One major obstacle to using an occupancy-based approach is the complications associated with designing and implementing an efficient survey. These logistical challenges become magnified when working with rare species when effort can be wasted in areas with none or very few individuals. 2. Here, we develop a two-phase sampling approach that mitigates these problems by using a design that places more effort in areas with higher predicted probability of occurrence. We compare our new sampling design to traditional single-season occupancy estimation under a range of conditions and population characteristics. We develop an intuitive measure of predictive error to compare the two approaches and use simulations to assess the relative accuracy of each approach. 3. Our two-phase approach exhibited lower predictive error rates compared to the traditional single-season approach in highly spatially correlated environments. The difference was greatest when detection probability was high (0·75) regardless of the habitat or sample size. When the true occupancy rate was below 0·4 (0·05-0·4), we found that allocating 25% of the sample to the first phase resulted in the lowest error rates. 4. In the majority of scenarios, the two-phase approach showed lower error rates compared to the traditional single-season approach suggesting our new approach is fairly robust to a broad range of conditions and design factors and merits use under a wide variety of settings. 5. Synthesis and applications. Conservation and management of rare species are a challenging task facing natural resource managers. It is critical for studies involving rare species to efficiently allocate effort and resources as they are usually of a finite nature. We believe our approach provides a framework for optimal allocation of effort while maximizing the information content of the data in an attempt to provide the highest conservation value per unit of effort.