Our topic today is the best practices when it comes to deposits for vacation rentals. Usually, we collect a $200 deposit at the time of booking. Within 15 days of a guest’s arrival, we require the entire stay to be paid for. We do this so we know the funds clear before they arrive.
When the tenants leave, we like to refund their deposit within a day. Our agreement states that we have up to two weeks to refund that deposit, but we don’t like to make them wait. Once we do a quick inspection and verify nothing has been damaged, we cheerfully refund the deposit within 24 hours. At that point, we thank the guests for staying. Often, people will leave the property in excellent condition. It’s always a nice surprise when you can’t even tell that someone has stayed there. In those cases, we ask for an online guestbook review and include in the email to our tenant that because they left the property in such great condition, they won’t be required to leave a deposit the next time they stay. This is always appreciated by our guests, and I believe it contributes to our high rate of repeat customers.
For my personal properties that I rent out, I go even a step further. I collect the $200 booking deposit but then I apply it to the rent. This gives me a strong competitive advantage. Instead of using that money as a deposit, I have a contract that my guests sign that allows me to charge their credit card for up to $500 if there are any damages to the property. When they are willing to do that, I waive the $200 deposit requirement and put it towards the overall rent. It gives me additional bookings and it’s a hard policy for others to match.
If you have any questions about how to handle your deposits on short term vacation rentals, please contact us at HomeSeekers, and we’d be happy to help you.