Useful Tips on Security Deposit and Vacation Rentals
What is Security Deposit?
A security deposit is a one-time, refundable sum of money a vacation rental owner requires a renter to pay in addition to the total booking rent. You can think of it as insurance against unpredictable tenants.
As a vacation home rental host, you get bookings from different people you don’t know, referred to you from vacation rental websites you list your property on. Even though these websites try as much as possible to verify the identity of the guests prior to move-in, there is no assurance as to how careful, responsible and/or tidy they may be.
What happens when the host realizes a renter broke some items or mistakenly left with certain objects from the property? And the renter is nowhere to be reached? Huh! How many of such situations can the host handle?
Why Collect Security Deposit?
There have been cases of renters fleeing a vacation home with some of the appliances and in some cases, renters leave the owner with damages to take care of after check out. Security deposit is your insurance against such renters. A security deposit assures you that a renter will be motivated to take care of your property like his own and abide by the rules of the property (if they want their security deposit refunded at the end of their stay). The security deposit also gives you rest of mind that whatever damages caused or by the renters or certain missing items will be taken care of with the money.
How Much Security Deposit Can You Collect?
The amount of security deposit to collect is dependent on the location of the property. There are some areas in which the law regulates the amount of security a landlord can collect whereas some areas have no restrictions.
It is a standard practice for home owners to request an additional month rent as security deposit. But we advise that a vacation home owner be considerate on the amount. Consider the location of your property and the value of the amenities included in the property. Also, if a high security deposit is requested compared to other properties in the same area, it will be difficult to get a booking.
When and How to pay Security Deposit.
Security deposit is to be paid prior to check-in day and so should be paid during the booking checkout online using credit card or PayPal. (See payment means accepted by Likizo Lettings). Under no circumstances should it be paid in cash, so that the transaction can be documented and tracked.
Can Security Deposit be used to pay for extended stay?
Security deposit is the insurance of the home owner against any damages or loss of items during the stay and will be retained until after the check-out date. It cannot be used to pay the rent of an extended stay. Remember, it will only be refunded fully after vacating the premises without any damages done.
Returning Security Deposit
A security deposit might be used towards any replacement of missing items or repairing any damages caused by the renters during their stay. It is the duty of Likizo Lettings to safeguard both the renter and the home owner, hence, the security is processed, held and refunded by us after the renter vacates the premises without any complaint from the host.
In the case of loss or damages, it is important that the host documents all the necessary replacement and repair expenses to the renter and a copy to us through our support center to enable the renter and us understand how much and why to deduct from the security deposit.
The amount is deducted and paid out to the host while the balance is returned to the renter.
Before damages claim are filed with us, we advise that the renter and the host discuss and try to agree on the amounts to be deducted.
Only a security deposit paid online via our website will be refunded to the renter. We are not liable for a security deposit paid directly to the host in cash.
Also we do not refund security deposit in any form other than to the payment means in which it was originally paid. If your security deposit was paid via PayPal, we will refund to the same PayPal account the payment originated from.
We are sorry that this post was not useful for you!
Let us improve this post!
Tell us how we can improve this post?