Security deposits are paid by your guests, and allow you to protect your properties from any kind of deterioration or additional cleaning fees.

Almost all bookings being made online, you can choose from several options when managing your security deposits.

How can you define the amount of a security deposit? Which option should you choose? We tell you all you need to know in this article.

Security deposit: under which conditions?

No matter how long the stay lasts and the cost per night: you should always require a security deposit!

Then, how can you receive the payment in due form?

As you can imagine, asking for a payment in cash -which cannot be tracked or counterfeit- or by check -facing risks of unfunded accounts and being geographically limited, as creditors and debtors must be domiciled in the same country- aren’t the best options.

The amount of the security deposit isn’t set by law. In practice though, the amount doesn’t exceed 20 to 25% of the rental cost. This amount must be written in the rental contract. Cashing is then made during the check-in inventory, which must be followed by a check-out inventory when the guests leave the property. This allows you to take stock of your rental situation and handle contentions, if there are any.

If no damage or degradation is observed, guests should be refunded within a timely manner. This period often lasts between 7 to 10 days depending on the rental managers and must be written in the rental agreement.

However, if works or excessive refurbishment are needed in the property, provide the related bills and subtract the amount charged to the security deposit.

Handling security deposits: 5 possible solutions

There are 5 common solutions allowing you to handle security deposit payments and refunds:

• Online credit card payment terminal: simple and effective online payment solution, using the guest’s credit card. Stripe, Paypal, Verifone or Ingenico (in addition to an online payment contract with your bank) can be used for such payments. Fees and commissions vary depending on the solution used.

• Card imprint: with this solution, travelers are not debited when paying the security deposit. The imprint is valid for 7 days and is renewable. You can also directly make an imprint on the day the guests arrive, which will then be valid during the whole stay. This service is also offered by Stripe, you just need to untick a box when cashing:

• Bank transfers: in general, no commissions are taken on bank transfers but transfer fees can be applied, depending on banking establishments. A period going from 1 to 3 days can be necessary before to receive the payment. Also, note that adding bank account details, especially internationally, can be limited by some banks.

• Paying security deposits through vacation rental marketplaces:

Let’s take, for instance, the 5 rental marketplaces with which we’re connected. Here’s how you can manage security deposits:

• Airbnb: the easiest one! Airbnb keeps a credit card imprint et gives you a 48-hour period after the guests have gone to report any incident and use the deposit.

• HomeAway: as a BookingSync client connected to HomeAway through the API, the payment gateway which has been set up in your BookingSync account is used for the HomeAway bookings cashing. It’s up to you to then decide on whether you want to cash the deposit during the booking payment -generally, along with the balance- or if you prefer to handle this during the check-in.

• Booking.com doesn’t handle security deposits. Usually, managers receive the travelers’ credit card details and can manually debit them, or they proceed to a credit card imprint through their payment gateway. They can also choose to handle this during the check-in. We'll soon offer the same payment integration as with HomeAway, it will then be possible de debit both the security deposit and the booking when paying.

• TripAdvisor cashes the travelers’ security deposit and gives you a 7-day period after they have left to report any incident and use the deposit. If no incident is being reported, TripAdvisor refunds the travelers.

• misterb&b doesn’t handle security deposits.

Concerning HomeAway, Booking.com (soon), TripAdvisor and misterb&b, if you decide not to cash a deposit at the same time as the rental payment, and not to collect it through these marketplaces, you can ask for the security deposit payment by sending a BookingSync notification. This will send a secured payment link and collect the money through your payment gateway, for example.

Handling security deposits can be tricky, but it’s an essential point to your vacation rentals management and your peace of mind. Take the time to compare the existing solutions to find the one that best suits you, depending on your priorities: time gain, money saving or user-friendliness.

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Did you know? BookingSync allows its clients and partners to access its API (Application Programming Interface) for free.

An API makes it easier for vacation rental companies to develop their very own program, working with our platform.

Since BookingSync was created, we’ve always wanted to work hand-in-hand with our partners and clients, by bringing them efficient, flexibility & freedom solutions. As our programming interface is open, each one of our clients and partners can create their own complementary tools to answer their own needs.

Owners, travelers app or even vacation rentals stats… Let your needs run wild and connect them to our platform.

Want to know more? Watch this short presentation right now!

How Air Rental overhauled their property management strategy to hit their goal of 95% occupancy with BookingSync + Rental Ninja

You'll find the Slideshare presentation at the end of this article.

About Air Rental

Air Rental started managing vacation rentals in Montpellier, France less than two years ago. As a VR management startup, Air Rental grew quickly by word-of-mouth among property owners in France because of their objective: to maintain 95% occupancy while managing all aspects of the rental process.

CHALLENGE

At the start, Air Rental only listed on Airbnb and had an average occupancy around 60-70%. They needed a way to manage their growing portfolio of rentals across more channels in order to meet their occupancy goals.

When Air Rental found BookingSync, suddenly they had a platform to manage all their properties across 10+ channels including sites like Booking.com and HomeAway. BookingSync takes the complex data of property managers and makes it effortless to manage. In addition, Air Rental could create individual websites for each property, opening the opportunity to receive direct payments from renters. Increasing visibility through BookingSync boosted both their occupancy and profits. 

With all their rentals synced to a single platform, Air Rental then began to look for a way to automate their day-to-day property management needs. “We needed a visual aspect in terms of data analysis, which we didn’t have when we began,” said Thomas Servais, Partnership Manager and Co-Founder of Air Rental. “We were using very complex Excel sheets to try to manage our finances. Then we discovered Rental Ninja in BookingSync’s app center.”

BookingSync has an open API which means that they host a lot of other applications that are compatible with their software. This opens up a whole other world of possibilities to meet their users’ supplementary needs.

Just before they found Rental Ninja through BookingSync, Thomas contacted a large development company to ask about building an app to meet the day-to-day needs of short-term rental management. They wanted an app that would use BookingSync's calendar to offer real-time alerts for administrators, cleaning staff, and check-in agents.

“In the end,” Thomas said, “we realized that Rental Ninja was the exact solution we were looking to create for ourselves. It was a huge surprise to us because we immediately had the final product that we were planning to develop ourselves.”

SOLUTION

Air Rental uses Rental Ninja to give their staff a single mobile app to manage everyday bookings across multiple channels. In the office, Air Rental administrators can see all their VR data in a way that paints the bigger picture: the scale and profitability of 40+ vacation rentals across 10 different VR platforms.

“Rental Ninja gives us the visual graphics of the profitability of each rental with an excellent overview of the general business. We know exactly how many people are staying in our flats tonight, for example,” Thomas said.

“We can see the revenue from all the listings, how many nights were booked in the last 30 days, how many rentals were active.” There are two more graphs on the dashboard that give them the occupancy evolution over time and the revenues by booking. They can access reports instantly.

Rental Ninja has a unique advantage: it was built by software engineers with over 15 years of rental management experience in the complex, evolving Barcelona market. Rental Ninja has created the features VR managers need to harness the valuable data that BookingSync provides.

Rental Ninja’s mission is to simplify the entire short-term rental management process. To that end, they welcome feedback and collaboration from users. “We sent them a detailed list of the developments we wanted,” Thomas said, “and they added push notifications and implemented a chat window in their application.”

This mobile app allows administrators to give client and flat information to their teams in charge of the operational and logistic aspects of their work. Through Rental Ninja, each team member is assigned a role, and Air Rental can grant Permissions to team members according to their job and what they need to be able to do.

Before Rental Ninja, Air Rental used several calendars and had to communicate appointments and changes by phone or email. Now, their staff get real-time push notifications and alerts from a single calendar in the app.

“The people we work with use the calendars every day. They have the contacts of the travelers who are coming, they have all the information about when people are arriving or leaving--all specific to the flats that they’re managing,” Thomas said.

Air Rental's staff now stay informed in real time. They use the app every time a client checks in and can add fees and photos of important documents instantly. “They just click on the app, go into bookings, and they know where they’re at.”

The ability to give staff permission to only the listings and features that they need cuts the digital clutter and saves a lot of valuable time for everyone.

RESULTS

Before Rental Ninja, each new check in agent had to download at least 5 different apps to access all the calendars and information they needed. Now, they just need one.

The roles and permissions management features simplify onboarding and reduce the daily communication between the in-office managers and the check in agents and cleaning staff.

Air Rental now enjoys user-friendly access to all their statistics and reports using BookingSync data. It helps them maximize everything from revenue, channel performance, occupancy, to client profile--all in the web dashboard.

Because Thomas and his colleagues can see their growth and channel performance on a long timescale, they are able to reduce risk and make informed decisions about when to expand.

“Thanks to this new management strategy, we’ve opened a new city: Marseille. In the last two weeks, we’ve added 10 new listings. I know that’s directly linked to the way we’re managing our teams and our data.”