Today we are sharing some best practices when it comes to vacation rental security deposits. Usually, we collect a $200 deposit at the time of booking. Within 15 days of arrival, the tenants must pay the entire cost of the stay in advance. 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 quickly inspect the property, we cheerfully refund the deposit, usually within 24 hours. Sometimes the tenants leave the place so clean that we can’t even tell someone has been staying there. In those cases, we send the tenants a letter thanking them for staying. We ask them to leave an online review in our guestbook and then we tell them that because they left the property so clean, we will not require a deposit for their next stay with us.
For my personal properties, I go even a step further. I collect the $200 booking deposit but then I apply it towards the rent. This gives me a strong competitive advantage. I ask my guests to sign a contract and agree to allow me to charge their credit card up to $500 for any damages to the property and then I waive the deposit requirement. Instead, I put it towards the overall rent. This practice has never created problems for us and our guests are always very pleased and happy with it. It gives me additional bookings and it’s a policy that others just can’t match.
Please contact us at HomeSeekers if you have any questions about how to manage vacation rental security deposits or about Property Management in general.