You want to provide your guests with a perfect vacation experience. But by renting your property to those you don’t know, you are also exposing yourself to risk. A security deposit is a vital component of protecting your short-term rental property. The trick is finding the balance between enough money to cover potential damages and an amount small enough to put renters at ease.
Know the Basics
Since your rental agreement may only be a week or even just a night, it’s critical that you include everything necessary to protect your investment. It’s a good idea to consult a lawyer when drafting your agreement and be sure to include a clear description of the property and key contents, conduct that is prohibited, and how the property should be left at the end of the agreement.
The first step in determining a security deposit amount is to understand the law in your city and state. Some states limit the amount you can require for a security deposit as a multiple of the rent. Other states have no limit at all.
Here are some things to consider when deciding exactly how much to charge for a security deposit.
Price of Rent — Consider your weekly or daily rate when determining the right security deposit amount for your rental. Standard practice calls for 10 percent of the rental rate or $250 flat, but every property is different.
Value of Property — A rental property with expensive fixtures, countertops and appliances will require a higher security deposit. If something is damaged or broken, it will be costly to repair. Receipts from installation and remodel projects can help you substantiate a heftier security deposit.
Furnishings — The amount of your security deposit should take into consideration how your rental property is furnished. Furniture will often show wear and tear more quickly than other parts of the home and therefore need to be replaced more frequently. If you have a high-end rental with luxury grade furniture, take that into account when setting your deposit. Keep the receipts from furniture purchases to help establish a reasonable security deposit and proof of value should something need to be replaced.
Rental Instructions — Be sure to set clear expectations on how your guests should leave the rental upon departure. Leaving detailed instructions will help them understand your expectations and perform the tasks thoroughly. Print out instructions for areas such as the kitchen, laundry room and bathrooms, and put them in page protectors. Store them where they can easily be seen.
Another option is to print out all of the instructions for your rental property and then store them in a binder. Note the location of the binder in your rental agreement. Making cleaning supplies available will ensure that guests have no excuse for not leaving it to your specifications. Additionally, it protects you from anyone using cleaning chemicals that are not appropriate for your space.
Documentation — In order to set your guests at ease, be transparent in your security deposit policies. Be clear about what you’re charging and why. Provide examples of property damage or excessive cleaning that may result in deductions from the security deposit. Show that their security deposit will be kept safe in a specific account and won’t be touched until the rental agreement ends, however long or short that might be. When renters feel that they have a complete understanding of the circumstances in which their security deposit may be used, they will feel comfortable writing a check.
Market Standard — Local real estate agents, lawyers, and other landlords can help you determine the appropriate amount to collect as a security deposit. To keep the marketability of your property in line with others, it is important to understand what is normal and customary in your area.
Do research and see what other short-term rentals are charging as a security deposit so that you are protecting your assets and still maintaining an attractive property for renters. You should also listen to your customers. Ask for feedback and read your online reviews to understand if you can make small changes to put future renters at ease.
Other fees — Are you also charging any other fees for cleaning or pets? These should be considered as well, since you don’t want to scare off renters with too many costs above and beyond your standard rates.
When dealing with security deposits, remember to be fair to your renters, recognizing that normal wear and tear is to be expected. Don’t forget to refund the security deposit to anyone who leaves the property in good condition—most states define when you need to refund the deposit, which may be as few as 14 days. Treat your guests as you’d want to be treated, and they’re likely to choose your property for their next vacation and encourage their friends to do the same.
About the Author
Bonnie Joy Dewkett is a professional organizer and writer for Quill.com. She shares cleaning & organizing tips for homes and businesses alike as The Joyful Organizer.
And yet you still face “The Case of the Disappearing Guest.”
That is: you have a promising early exchange with a potential guest, the ball seems to be steadily rolling toward a booking, and then they simply vanish—never to be heard from again, no matter how many follow-ups you send.
With all these checkmarks working to your advantage, what the heck happened?
In my 20+ years as a vacation rental guest, I’ve been through the inquiry process many times…from the other side of the potential transaction. Allow me to be your case study.
In the below article I’m going to share with you a few of my most memorable booking experiences, and why they’ve stuck with me. (These are real-life examples, but I’ll leave out names to respect the privacy of the owners.)
In The Bookings Race, the Hare Usually Wins
We vacationed in Sandbridge, VA in the summer of 2013. We didn’t want to stay in Virginia Beach (too busy) and OBX was booked. I luckily struck on Sandbridge, a quiet community nestled between Virginia Beach and OBX. Perfect!
I searched, sent out multiple inquiries, and then sat back for the waiting game. Except this time was different. Before I’d even sent out my final inquiry I received a response from a local property manager. It wasn’t the most detailed and personal of responses, but it had one major asset: it was rapid!
Guess what? We booked her place.
When it comes to vacation rentals, ignore the “slow and steady” argument, as well as any advice that tells you to avoid the immediate response for fear of “coming on too strong.” In the race to convert a guest inquiry, the speed of response is probably the biggest factor in locking down a booking. And the easiest, too.
How fast should you respond? As fast as possible, really.
After all, the modern vacation rental guest is generally always “on,” and always ready to book. Especially the millennial generation, who were raised on instant access and fast communication. If you can manage to respond in less than 2-3 hours, then you’re right up there with the best of them (within reason, of course – you do have to sleep!).
Your Guests Have iPhones – Call Them!
It’s the age of the millennial guest, I know. But many of us gadget-crazed guests do sometimes use the phone for its traditional use!
Case in point – I was headed to Sanibel, FL last year with my family. I sent out some inquiries and received a call from an owner who wanted to know if I had any questions about the property.
I confess; I was a little taken aback. I didn’t expect a call. But after 10 seconds of adjusting and composing, I settled in for a great chat, and 5 minutes later I’d booked a stay at his 2-bedroom condo. Afterward, I received responses via email from a few other owners. But they’d already lost out to our old-fashioned friend…the humble telephone!
Equally impressive was the phone call I received from the same owner on our first morning at the condo, just to see how things were going. This is an owner who clearly cares about the entire guest experience. Cynics may suggest the owner was somehow intrusive or snooping, but I felt only positive vibes!
(As a related aside… although I’ve never received a video response to an inquiry, I have seen many examples used by owners over at Matt Landau’s Inner Circle. Highly personal and certainly trust-fostering…a great mode of replying!)
You’re Way Cooler Than Any Guide Book
My family is taking a trip this summer to Daufuskie Island, SC. This wasn’t our original plan; I’d been looking at Hilton Head Island, but an intrepid owner sold me on Daufuskie.
If you know Daufuskie, you’ll know there are no grocery stores, and you can’t drive to the island – it’s boat transfer only. Presented with a few logistical challenges, we started to wonder if Hilton Head might be the less-stressful choice. Right on cue, the owner in Daufuskie alleviated our fears with her expertise. From boat transfer choices, to online grocery shopping options—she covered it all.
Had it not been for this owner on Daufuskie, we would almost certainly have favored the easier route of Hilton Head. And on top of that, she didn’t just give functional information; she also gave us a list of local hangouts, and even a couple of local cooks who will bring prepared food right to our rental.
No bookstore guidebook can match this kind of personal knowledge. They almost always lack suggestions for the “Mom & Pop” places that us modern guests like to frequent. After all, we’re looking for that one-off local experience to remind us where we are in the world. It stems from the same value base that led us to stay in a vacation rental in the first place!
All of this is even more relevant when you consider the person tasked with finding and reserving the vacation rental. He or she has the added pressure of the group to find the perfect stay for everyone. So lend that harried person a hand, and differentiate yourself in the process!
Personalize Your Communications
As I said, those of us looking at vacation rentals over more traditional lodging are often searching for a more personal way to travel. Yes, price is important, but it’s very often a unique experience that guests are after. You can only stay in so many essentially identical places before you crave something a little different.
Use this personal angle to your advantage in all your guest communications. For example, if your potential guest mentions or marks that they have 2 kids, elaborate on your property’s kid-friendly features in your response. Something like:
We’re delighted to confirm that our villa is available for your chosen dates at the price of x.
I notice that you have two kids traveling with you. We’ve spent many happy vacations here with our own children, and we’ve got lots of amenities to keep them entertained! From the large rear garden and heated pool, to the cart of beach gear that we provide to all our guests, to the games room complete with pool table and foosball….”
I’ve seen so many inquiry responses that simply tell me the property is available. When I find a personal touch—something that shows the owner has thought about me, personally—I will pay attention, and more often than not, close the whole thing with a booking.
No more “Case of the Disappearing Guest”!
Andy McNulty is Co-Founder of Guest Hook, the web’s first vacation rental copywriting agency, and Touch Stay, a digital welcome book to help you create great guest experiences through modern technology. Having grown up on vacation rentals, he is passionate about the industry and believes its greatest asset is the personal, 1-to-1 approaches of owners and property managers.
The ultimate goal in listing your vacation rental is to increase its potential for profitability. You place your offer up on a site like FlipKey, get in front of thousands of interested travelers, and start making money by renting it out – right? Not entirely. In order for your listing to work, you have to run your rental like a savvy small business owner would run a successful storefront. Your home and the customer service that accompanies it must provide the things your renters want and need in order for you to reach the highest level of profitability through renting. If you’re still a bit new to the small business mindset, have no fear! Check out these 6 tips to run your vacation rental like a real-life entrepreneur.
Evaluate and Understand Potential Risks
Outlining and covering your potential risks as a vacation home owner is the first step in successfully managing your rental. Small business owners take time to understand possible causes for profit loss, and find practical solutions to cover each. List your concerns first then pair each with a measure of prevention. Whether these prevention measures include contract modifications, additional security, or specialty insurance, take time to research your options and find those with the highest potential for reducing risks.
Invest in Security
Speaking of security, ensuring the safety of your customers will be critical. This holds true in every industry, however, it is especially important for consumers within the hospitality industry. Many home owners fail to see the importance of a home security system. You may hold this personal preference when it comes to your home, but you shouldn’t treat your rental like your home. It’s your business. Investing in a business security system will help you provide the reassurance your guests need to enjoy a comfortable and safe stay. It will also help you protect your profits from break-ins and potentially dishonest guests.
Think of the Consumers’ Needs Before They Do
Successful business owners are constantly thinking of ways they can further improve their product/service to better meet their consumers’ unique needs. Think like your consumer to get a better idea of what they will want and need during their stay at your rental. Think of the things you appreciate having during an out of town stay, and make these available to guests of your rental. Also understand your area and provide information and materials that stand to benefit visitors. Examples of this could include providing bottled water for vacation rentals located in warm climates like Las Vegas or Phoenix, or offering hot chocolate for winter travelers in Park City or Denver. The FlipKey vacation inspiration page could serve as a useful tool here to get ideas from travel guides and “best of…” galleries.
Consider a Third-Party Cleaning Service
A clean environment is essential to the success of any business. As a business owner in the hospitality industry, it is your responsibility to provide a clean home. Unfortunately, you may not have the time to clean your home well enough to meet the hospitality industry’s standards after every guest. This is where a third party cleaning service can help! Online housekeeping guides like Housekeeping.com can help you find quality housekeeping services that won’t blow your rental profits. Find a service that works for you, then schedule regular cleaning appointments in between stays to ensure each guest is welcomed with a spotless vacation home.
Listen to Consumer Reviews
An important part of continuously meeting your consumers’ needs is to actually listen to their reviews following a stay. Smart entrepreneurs pay attention to both positive and negative reviews and do their best to understand reviewers’ comments from the consumer’s perspective. FlipKey provides a section for consumer reviews to help you with this part of your rental management. If you’d like additional feedback from renters who didn’t leave a review, try sending a quick follow up after their stay to say thank you for choosing your listing and ask if there were any additional amenities/resources they would have found useful during their stay.
Keep up on Market Trends
An integral part of managing your rental like a successful small business is staying competitive. Small business owners are constantly watching market trends and making improvements to keep up in competitive markets. Look at successful listings in your area to see what they’re offering. Check out their reviews to see what travelers are saying about their stays. Are you currently doing these things? What could you do to generate the same raving reviews? Additionally, you should keep up on what’s trending in the promotion of successful listings. How can you get your listing out in front of more interested users and by way of which avenues? FlipKey recently published an article with some great tips for using social media to promote your listing.
Cosette Jarrett is a contributing writer for several lifestyle and tech blogs. Her current work includes roles as the go-to tech girl at HighSpeedInternet.com and regular contributor to the Lifehack and Business 2 Community blogs. She enjoys creating pieces to help both businesses and consumers find increased simplicity and efficiency at work and on the go.
One of the most useful items you can provide your guests is a basic guide, or welcome book, that gives a snapshot of your area. In this book, you can compile all important information into one place, helping to reduce questions from guests while reinforcing their impression of you as an organized owner. Leave your welcome book in a place where your guests are sure to find it when they arrive, like an entryway table or kitchen counter.
Make the information easy to find, by using a binder with tabs separating each section. Along with your tips, consider placing a welcome letter at the beginning of your book. This can be a short note of thanks that will help make your guests feel at home when they first arrive.
To get you started, here’s a list of items we recommend you include:
Emergency numbers/contact information
Wi-Fi network and password
Check out times and departure instructions
“How to use” guides
Water and septic systems
Provided household supplies
Toilet paper, paper towels, linens, etc
Restaurants – include menus for takeout and delivery options
Grocery stores, farmer’s markets/stands
Local attractions – hiking trails, best beaches, amusement parks, etc
It’s no secret that vacation rentals are getting more and more competitive, especially in highly booked vacation destinations, and this means that vacation rental owners are having to up their game to attract the most guests. At Air Concierge, one of the ways we do this is by stocking vacation homes with a welcome package. Guests simply LOVE the welcome package and often gush about it in their reviews of the property (which means even more bookings!). A simple gift to welcome your guests to your home sets the proper tone for their stay, makes them feel welcome, and most importantly reminds them that they’re staying in a unique home, not some generic hotel room.
But what do guests really want in their welcome package? What is the perfect item, or perfect combination, that gets those glowing 5-star reviews? Half of us here thought it would be chocolate, while the other half thought it would be fresh flowers. Both have their merits, and both are truly appreciated by the unsuspecting traveler. But we were looking for the best – the thing that would do it every single time. So we ran a test.
Over the summer we placed a box of local, gourmet chocolates in half of our vacation rental properties, while the other half got a vase of fresh, seasonal flowers, and recorded the guest response to each. We discovered that the overwhelming majority of guests preferred the chocolates!
But then we posted about the experiment on our Facebook page. In a notsosurprisingturn, the overwhelming Facebook majority was for both chocolates and flowers! By themselves, chocolate and flowers were tied for votes, and there was even a suggestion for wine being included in the welcome package. We also shared our findings with a few other vacation rental owners and discovered local, nonchocolate food items were also a big hit (examples included salmon jerkey for properties in the Pacific North West and local maple syrup for properties in Canada – this is the perfect opportunity to show your creativity!)
So which is really the best welcome package for vacation rental guests? If you can only include one item, go with some local gourmet chocolates (or, at the very least, a food item). Guests enjoy having a bit of something sweet to greet them after their travels, and returning at the end of a night in your town to find some leftover chocolates puts their mood in a happy place for the evening. But if you really want to up your game as a vacation rental owner, some chocolates and a simple vase of fresh flowers can be the difference between a 4 and 5-star review from an otherwise satisfied guest.
Regardless of what welcome gift you choose for your guests, remember that this too often neglected addition goes a long way and can bring you returns so many times more than the small cost of a box of chocolates.
Ryan Danz is the founder of Air Concierge, a vacation rental property management organization designed to improve the vacation and shortterm rental home experience for property owners and their guests. Ryan is also a California licensed attorney, wellversed in the tax matters surrounding shortterm rental properties and offers his insight to his clients.
You’ve decided to list your home on FlipKey—great! We want to make sure you get the most out of all of our site features, so we’ve provided tips on how to create a quality listing that drives bookings.
Showcase Your Home
You can capture travelers’ attention with a compelling headline. Avoid using vague adjectives and leave out listing criteria like the number of bedrooms and bathrooms. Instead, opt for descriptive terms unique to your home’s features.
Write your property description so that travelers can scan it easily. Try breaking up your summary into chunks while painting a picture of what it’s like to stay in your home. Plus, here’s a tip: You can aid your listing’s performance in search engines if you use an original description that doesn’t appear on other listing sites.
Take the Perfect Shot
We see it again and again: photos play a big role in capturing traveler interest. It’s your first impression, so choose photos that are appealing and well-lit. A dark, pixelated image of a cluttered room will be overlooked in favor of ones in which a traveler can actually imagine themselves. For instance, if you’re photographing your dining room, set the table as though you’re hosting a dinner party for friends.
Set Competitive Rates
When setting your rental rates, check out what similar properties in your area are charging to make sure that your prices are competitive. Keep your pricing structure simple and easy to understand by providing nightly and weekly rates, categorized by season.
Here’s another tip: The default rate that you choose here fills the gaps between whatever you set for seasonal rates, so travelers will always get an accurate price when looking at your listing.
Establish Clear Policies
From damage protection to refunds, your policies help set travelers’ expectations prior to booking. When you edit your listing, you can set explicit policies that ensure your protection, and define what you and your guests are responsible for throughout the booking.
Update Your Calendar
Finally, the most important piece of your listing is your rental calendar. It’s simple: an up-to-date calendar leads to more qualified inquiries and booking requests. You can manually add your booked dates, or sync it with an existing calendar by importing the data from websites like Google or other listing sites.
One of the biggest concerns of many travelers heading on a trip is how they are going to check into the vacation rental and start enjoying their vacation. It’s important to consider the check in procedure that works best for the vacation rental. A stressful check in can set the tone for the trip and influence how the traveler feels about the property.
Coordinating check in times can be difficult when the traveler is coming from far away. A traveler with a long drive or a connecting flight may run into traffic or delays, leaving the owner or property manager waiting and wondering when the traveler will arrive. Having a keyless entry to the property can take these factors out of the equation.
Without keys, as an owner you don’t have to worry about the traveler misplacing the key or not returning it at the end of their stay. You won’t have to make new copies or come to the rescue if a traveler locks themselves out with the key inside on the counter.
As a traveler, you can go enjoy the beach or explore the city without having to bring a key with you-it’s one less thing you have to worry about when lugging your beach chairs, towels, surfboards or wallet, passport, bus passes, etc.
Another advantage is that all members of the group can access the property without all being issued a key. If you’re on vacation with your extended family, the whole family doesn’t have to plan to be back in time for the baby to take a nap, or synchronize your schedules so that everyone is ready to go out to dinner at the same time.
While a keyless entry can save time and help create a hassle-free check in, there are some other factors to keep in mind. Having a keyless entry can make the check in process easier for the owner and the traveler, but communication is essential. Make sure the traveler is aware of the code and the steps to use the keyless entry. If the traveler does not have the correct access code or does not understand how to use the system, this process can be more frustrating than simply having a traditional key. Some travelers may find it more burdensome to remember the code instead of remembering a physical key.
The negative side of not issuing a key to a group of travelers and allowing them to access the property freely is that they can easily share the code with others outside of their group. This makes is difficult to monitor who is coming and going.
Like all technology, there is always the possibility of a system error or hardware malfunction. Battery or electric powered locks prove to be useless when the power source is cut off. Keyless entry systems can also be more expensive than traditional locks and may require more maintenance.
Weigh your options to find the most efficient way to manage reservations and create the ideal experience for the guest. Some of the best keyless entry vendors in the business are: Lockatron, Kaba, Point Central, and Resort Lock.
Being a vacation rental property owner can sometimes seem like a full-time job. Maintaining your listing information, handling messages from travelers, updating calendars, sending payment requests, accepting booking requests and checking travelers in and out can take up a lot of your time. If you own multiple properties, it could take up all your time! This is when a property management company can step in and help you with all of the nuances involved in having a vacation rental.
Research the Field
The first step into choosing a great property management company is doing some online research. Some areas like Boston, New York, Los Angeles and Miami will have a lot of different property management companies, while other areas may have only one or two companies. Take some time to research company websites, social media outlets and reviews from other owners. Since the Internet and social media have become indispensable tools for owners and travelers alike in recent years, you’ll want to focus on those who have built up an impressive online presence.
Choose your plan
Once you have settled on one or two options, you will want to ask yourself how hands on you want to be and what you want the company to manage. Some property management companies handle all the bookings and payments while the owner focuses on building a relationship with the traveler, physically maintaining the property and maintaining a internet and social media presence. Other management companies will handle everything from updating listings to providing the traveler with check in/out information, cleaning and maintaining the property while the owner sits back and enjoys some free time.
When talking to a management company, you will want to find out what kind of plan they offer. Some companies allow owners to pick and choose which services they want. For example, the owner can focus on marketing, bookings and answering inquiries, while the management company provides cleaning and maintenance, check-in services and the like. Other management companies offer a full-service plan that covers everything except bookings. Obviously management companies come in a wide range and offer many different plans, so it is important to have an open and thorough conversation before you sign any contracts.
Ask these important questions
Once you have established which plan might work best for you, you will also want to find out;
How often will the management company contact you and through what means?
Where will they advertise your property (locally, nationally and internationally)?
Who will update any online listings (rates, photos, running special offers, etc)?
Do they guarantee a minimum level of bookings?
Who will interact with the potential traveler once a personal information is shared and a payment/booking request has been made?
Will the company provide a representative to welcome the traveler at your property or a welcome basket/reading materials of local attractions?
Do you, as the owner, have to inspect the property before and after each traveler, or is that something the cleaning/maintenance staff takes care of? If there is damage to the property or other maintenance that needs to be done, who is responsible and how will the costs be documented?
The most important thing to remember throughout this screening process is that whatever management company you choose, you are relying on them to alleviate some of the burdens and stress involved in handling one or more vacation rental properties. Ask for contact information for other owners who have used the company’s services, and then follow up by talking to them to get a feel for how the company operates. If you do your homework, your partnership with a management company may be so helpful that you are able to take a well-earned vacation of your own!
Setting the rates for your vacation rental can be tricky. Set your rates too high and you may lose travelers to your competition. Set them too low and travelers may abuse your home as a cheap rental. In this post I’ve included some helpful tips to help you set your rates just right so that you can get the most out of your listing.
Check out the competition
A great place to start when setting your rates is to check out your competition. Compare your property to similar rentals in the area making note of their size, amenities and proximity to attractions such as the beach or an amusement park. Take a look at what these owners are charging for nightly, weekly and monthly rates as well as taxes, fees and security deposits. You may also want to note which dates these owners mark as the high and low seasons; and take a look at their availability calendars to get an idea of how many days they book and how far out they book.
Know your expenses
You will also need to estimate your expenses so that you can calculate what you will need to charge and how many days you will need to be booked in order to make a profit. Expenses include your mortgage, taxes, the cost of routine repairs and renovations as well as emergency repairs, utilities, landscaping and insurance. Your expenses may also include permits or licenses, legal and/or accounting expenses, cleaning services, management services, supplies for amenities (such as a pool), advertising and transaction costs and of course, your time.
What will you charge for extra fees?
It is common for owners to pass along some of these expenses such as taxes, cleaning fees, and sometimes utilities directly to renters. FlipKey has specific fields where you can enter your rates for taxes and cleaning fees. You are also able to add custom fees if you would like to charge for other costs. For example, you may want to include a fee for air conditioning or pool heating because these will add to the cost of your utilities. Additionally, FlipKey has fields where you can enter an additional guest fees and a pet fee if you would like to do so to cover the additional utilities and wear and tear on your home.
Once you have entered all of your rates and fees under the, “Rates,” section of your listing, you are able to set your damage coverage under the, “Policies,” section. You may choose to collect a refundable damage deposit, which typically ranges from $200-$500. If you are renting a more high-end property you may want to consider selecting damage insurance instead. This allows you to insure your home for up to $1000, $3000 or $5000 worth of damage and only requires the renter to pay a small fee.
Give a weekly discount
When setting your rates, it is common to set the weekly rate as the nightly rate multiplied by 5 or 6. This encourages travelers to book a full week because they will receive a slight discount. It is also common to charge slightly more for weekend nights. FlipKey allows you to specify a weekend night rate and you can also select exactly which nights you would like this rate to apply. It is wise to enter nightly, weekly and monthly rate as well as seasonal rates for the upcoming year. Travelers can search for homes on FlipKey a variety of different ways, and having all of these filled in will best allow travelers to compare the value of your home to others.
FlipKey is a vacation rental marketplace with more than 240,000 rentals around the world. Find the perfect place to stay for your trip, and get great value along with the space, privacy and amenities of home.