If you’re a novice or experienced host, you may be wondering whether you should charge an Airbnb security deposit for your rental home. You are aware, as a holiday rental owner, that renting is not a risk-free endeavor.
Regardless of how diligently you work to keep your property in good condition, accidents do happen and things get broken or damaged. As a precaution, adding a security deposit to your listings ensures that any damages, breakages, or missing goods are taken care of.
As is the case with many other decisions, adding a security deposit to your Airbnb home has several advantages and disadvantages. Continue reading to learn all you need to know about security deposits.
What Is an Airbnb Security Deposit and How Do I Get One?
Airbnb takes a predetermined amount of money from visitors as a security deposit. This covers any damage to the property that occurs during their stay. The security deposit is refunded if there is no visible damage to the property.
Airbnb hosts have the option of establishing a security deposit to cover small losses. For instance, if visitors break glasses during their stay at your house, you might charge them for thorough cleaning. Having a security deposit in place will enable you to subtract the cost of the cleaning charge from the amount. The visitors cover the cost of the damage, and you are not required to spend your money to resolve the issue.
How Does the Security Deposit Work?
The Airbnb website is responsible for processing any security deposit claims. They safeguard visitor payments and guarantee that hosts are adequately compensated for property damage. Outside of the Airbnb website, security deposit collections are not guaranteed.
When visitors make a reservation, the deposit is not charged immediately. If the host wishes to collect a security deposit from a guest, they must follow a specific procedure.
Should I Require a Security Deposit When Renting an Airbnb Room?
As a host, you have the option of charging a security deposit. While adding a security deposit protects your property, it also has the potential to deter potential guests from booking.
Hosts should evaluate their listings in light of the continuing COVID-19 outbreak. Consider eliminating any impediments that may hinder visitors from booking. Eliminating a security deposit may increase your occupancy rate. On the other side, without a security deposit, you may be responsible for property damage fees.
How Much Should a Security Deposit Be?
Airbnb does not propose a set deposit amount but notes that it might range from $100 and $5,000. Hosts will be responsible for determining the amount of the security deposit on their own.
According to the information provided by Airbnb hosts on several forums, there does not appear to be a set amount for an Airbnb security deposit. Though there appears to be a consensus that the security deposit should not exceed 20% of the total cost of the booking. The average security deposit per booking is between 100 and 500 USD.
Keep in mind that your listing description and house rules should be explicit about your security deposit requirements. Obtaining written confirmation of your demands might assist you in avoiding misunderstandings and complaints.
How Do I Recover My Airbnb Security Deposit?
If you, as a host, want to make an Airbnb security deposit claim, you must follow the steps outlined below, as outlined by Airbnb:
1. Within 14 days of the guest’s checkout date or before the check-in of a new guest, you can submit a request to Airbnb’s Resolution Center. You’ll need to describe the nature of the damage, provide proof, and submit a compensation request.
2. Your guest will have 72 hours to respond to your request. If the guest agrees to pay the requested amount, Airbnb will process and send the payment to you, which may take up to 5 to 7 business days. Your visitor may also opt to pay a different sum or deny your request.
3. If your visitor rejects to pay what you asked or declines to pay anything, you may then engage Airbnb. An Airbnb Support Representative will reach out to the guest to settle the issue based on the Host Guarantee Terms and Conditions. Airbnb will send the guest a payment request if they approve the request by the terms.
Which documents am I need to submit?
You must include documentation of the damages to your property as part of the request. This may include photographs, videos, repair receipts, invoices, or written estimates. Airbnb will look at this documentation, as well as documentation from guests to determine if it requires the deposit.
What Are the Consequences of a Security Deposit?
While a security deposit might be a good way for hosts to protect themselves and their properties, there seem to be some downsides as well.
• Guests are concerned about being charged unexpectedly.
Some owners fear that collecting a security deposit may dissuade visitors from renting their homes. According to what some hosts are stating on the web, this may be real. On Reddit, one Airbnb host said that he often got queries regarding the Airbnb security deposit from visitors who were new to the platform.
These visitors inquired as to whether the security deposit was collected in advance or was included in the reservation fee. Indeed, this host believes that some guests have opted out of booking because they believe they will be required to pay a security deposit in advance. However, according to Airbnb’s website, this is not the case. If no damage occurs during the guest’s stay, the security deposit will be refunded.
• Impairs the booking process by introducing ambiguity
Because security deposits are optional, including them in your advertisement may provoke more inquiries from prospective visitors. You will have to devote extra time to explaining how your security deposit policy works and what it implies for your visitors. As a consequence, the booking process might wind up looking more difficult, making passengers less inclined to book.
• Complaints regarding pending criminal charges
According to Airbnb’s official help pages, guests are not charged for the security deposit unless and until a host files a claim. However, some visitors assert the opposite. Several users have stated that Airbnb has established outstanding charges for their payment method for a security deposit. This damages hosts’ reputations by implying that they misled their guests.
• Hosts may still be required to appear in court with their guests
Possessing a security deposit does not preclude court proceedings. Certain hosts may still be required to sue guests if neither Airbnb’s Host Guarantee nor the amount of the security deposit covers the cost of damages.
While adding a security deposit to your listing may appear to be the prudent course of action, you must consider all of the above before making a decision. Examining the benefits and drawbacks of an Airbnb security deposit can assist you in determining whether it is appropriate for your rental business.
To figure out the best approach to ensuring that your property is well protected, consult with your insurance agent. That way you will be confident that you’ve made the appropriate option and that you have enough coverage.
Each host has the option of charging a security deposit. Consider your rental property’s contents, cancellation policy, and total booking rate before making a decision. This will ensure that you make the best decision possible for your rental business, regardless of its nature. Another proven technique to ensure your company receives the greatest amount of assistance is via software. Vacation rental software, such as Lodgable will help you increase your revenue and simplify your business.