Setting a Security Deposit
The inside scoop on how and where to set a security deposit.
Many first time hosts make the mistake of not setting a security deposit, and risk major damage to their space. Not setting a deposit is an effective way to get bookings before having an established profile, but it also puts the host in danger of having to pay for damages guests may leave behind.
These possibilities make it seem silly not to add an Airbnb security deposit to our listing. However, high security deposits can reduce your number of bookings. Some people simply can’t afford to part with a security deposit for a number of months. That is why we need to equally assess our listing & possessions and our usual type of guest to really before setting the price of our security deposit.
The Airbnb Listing
When trying to figure out where to a set a security deposit it is good to take stock of the current listing. Imagine the worst possible scenario, and ask yourself, “if absolutely everything that could be damaged was left damaged what would the cost to replace, clean, and repair be?” That number is the largest a security deposit could be, but that’s probably way too high. Airbnb offers a free Host Guarantee designed for catastrophic scenarios, but it doesn’t cover something like red wine spilled all over your white furniture.
At the least, a security deposit should cover the cost of replacing and cleaning the most expensive items in your listing. If the Airbnb security deposit could cover our most expensive item then it will cover those below as well, and if everything is destroyed you can make a claim to Airbnb directly. This marks both the high and low of where a security deposit should be set.
Guest Types
Now that we know the gauge of where a deposit can be set at, we should understand where on that scale our Airbnb lies. The type of guest we attract will dictate whether or not an Airbnb security deposit is set too high. If we have a listing that is priced for guests that are usually on a budget we should keep our security deposit on the lower side. For guests booking an entire house ora luxury Airbnb, however, we should keep our security deposit high enough to protect us. Keep in mind, Airbnb won’t actually charge your guest the security deposit, so think of it more as a pre-authorized damage amount.
To be fully transparent two pieces of information should be made clear in our listing about the deposit. First, we should clearly list our security deposit price and second it is important that we explain the deposit is held from their credit and not withdrawn unless a formal complaint is made. Following these guidelines should help ensure that guest bookings continue rolling in despite setting an Airbnb security deposit.
Airbnb can be a great way to earn extra income. Some hosts have even quit their ‘day job’ to manage their listings full time. This can all be ruined if we aren’t protecting ourselves from guest damage, just in case. If we need to do some work on our listing right now, Payfully can really come in handy. The startup works hard to help Airbnb hosts get access to their future payments when they need them. Learn more on their website.
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