Direct Booking Website: How Do You Protect Yourself?

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Direct Booking Website: How Do You Protect Yourself?

Gulliver R.
Rental Property Investor · Seattle, WA · Member since 2016 · 524 posts · 148 votes

Hi All,

I have an STR that's on Airbnb and VRBO right now. But I'd like to build a directing booking site and put my STR on that as well. I like that you don't have to worry about getting a bad review on Airbnb or VRBO when getting a booking from your direct booking site. But what about when bad things happen? How do you protect yourself? For example: when guests break stuff, when they break the rules, when they have a party in your STR, etc.? What I like about Airbnb is that if the guest breaks the rules and you can prove it, Airbnb will have your back and allow you to kick the guest out with drawbacks. How do I protect myself from the bad stuff?

Thank you,

Gulliver

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Matt Mertz
Leander TX · Member since 2020 · 179 posts · 150 votes
3y

We had the same concerns.  We solved it with security deposits.  OwnerRez has the systems in place to allow you to charge a real security hold on the guest's credit card.  It works with Airbnb, VRBO and our direct booking site (hosted through OwnerRez).

We prefer security deposits over damage/travel insurance because the guest goes into the house with money on the line.  We think this provides a greater incentive to behave.

In the time we implemented security deposits, we only had to dip into it once when a guest was super messy requiring another cleaning fee.  And we didn't have to deal with Airbnb AirCover to collect it.

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  • Bruce WoodruffPro Member
    Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
    3y

    Have them sign an ironclad lease that is legal and enforceable in your state. Don't allow stays longer than 29 days. No last minute bookings.

    Airbnb is not that much help anyways....

    1Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    3y
    Quote from @Bruce Woodruff:

    Have them sign an ironclad lease that is legal and enforceable in your state. Don't allow stays longer than 29 days. No last minute bookings.

    Airbnb is not that much help anyways....


     I agree with Bruce. Have a seperate contract. Get a photo ID.

    I also wouldn't put too much faith in Airbnb protecting you. 

    1Reply
  • Lisa Graesser
    Rental Property Investor · The Villages, FL · Member since 2017 · 341 posts · 397 votes
    3y

    I have many direct bookings , whether through Zillow, Google, Facebook groups or Houfy. I have a rental agreement and a damage deposit. I think your damage deposit would be determined by the size of your home, the party potential and your past experiences.

    My rentals are in an area that is populated with retirees and my party or unrespectful guests are limited.  I have had great experiences with direct bookings.

    1Reply
  • Wilson Vanhook
    Rental Property Investor · Oklahoma City · Member since 2021 · 108 posts · 103 votes
    3y

    Check out Safely insurance. You can purchase it per booking for a reasonable price. You choose the amount of coverage. For instance if you want $25k content, $1M dwelling and liability that should be somewhat comparable to what AirCover offers. The claims should be easy with them as well so you may not even have to chase guests down for damage reimbursement.

    1Reply
  • Gulliver R.
    OP
    Rental Property Investor · Seattle, WA · Member since 2016 · 524 posts · 148 votes
    3y

    Thank you all for the advise! I have good insurance now that covers me. I don't rely just on the AirCover. I will implement the collection of photo ID (I do this now because the city requires this), deposit, and have them sign a lease/rental agreement. @Lisa Graesser would you mind sharing your lease with me or a template of some kind? My email address is MHCinvestor at gmail dot com. I'll have a lawyer check it. Thank you in advance!

    -Gulliver

    0Reply
  • Luke CarlPro Member
    Rental Property Investor · Tennessee Florida · Member since 2016 · 4k+ posts · 5k+ votes
    3y
    Quote from @Gulliver R.:

    Thank you all for the advise! I have good insurance now that covers me. I don't rely just on the AirCover. I will implement the collection of photo ID (I do this now because the city requires this), deposit, and have them sign a lease/rental agreement. @Lisa Graesser would you mind sharing your lease with me or a template of some kind? My email address is MHCinvestor at gmail dot com. I'll have a lawyer check it. Thank you in advance!

    -Gulliver


     Lease is for tenants. Rental agreement is for guests. 

    Podcast Guest on Show From Surviving on $30/Day to 30+ Properties Thanks to Blue-Collar Skills
    1Reply
  • Elizabeth Howell
    Specialist · Nationwide services · Member since 2021 · 12 posts · 12 votes
    3y

    I just got back from the STR Wealth Conference which included a half day workshop on marketing that was led by Bill Faeth and Mark Simpson (Boostly). Mark is on a mission to help people create direct booking sites to decrease reliance on Airbnb and the other online travel agencies (OTA's). Mark has 2 books that cover all of your questions and more. The new one is called The Direct Booking Blueprint and the first book is The Direct Booking Playbook. Mark is a very generous soul and you can contact Boostly and ask questions. They won't put a hard sell on you to build a direct book website with them. I second Safely as a good insurance option and general source of info. Also Super Hog is another insurance company. Finally, Jeff Hampton, who worked as a personal Injury trial Attorney for ten years did a presentation - terrifying but excellent- on how to protect yourself as a business owner not just in terms of direct booking but overall liability. But his checklist is worth looking at to achieve the security you want for offline booking. Jeff's company is called STR Law Guys. I think you are smart to look at this. The general consensus with all of the presenters & experts at this conference was that Airbnb continues to act in the best interest of the guest, not the host. And how small changes to Airbnb's policies and algorithms can have drastic impacts on the smaller owners, hosts and investors. Hope this helps!

    3Reply
  • Andrew SteffensBusiness Member
    Tampa, FL · Member since 2022 · 3k+ posts · 3k+ votes
    3y

    As a mid size PM company we actually charge damage waiver to all guests and then self insure our clients up to a pre determined amount to protect against property damage.  In 7 years and over 25,000 reservations we have had damage over $500 +/- 25 times.  Off the top of my head the largest guest damage claim was $1,700.  I know without scale this does not help you too much, but if you get 5 bookings average per month x 12 month = 60 reservations and the damage waiver is $49 you can "make" $3,000 which should cover you for damages.  We also do as others recommend and have a good, attorney reviewed, Reservation Agreement and verify ID.  If we every had damages over $2,000 we would like pursue a legal remedy.

    [email protected]813-563-0877
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    2Reply
  • Brooklyn McCarty
    Investor · Member since 2022 · 1k+ posts · 754 votes
    3y

    You want a rental agreement, a deposit. you can also check out SuperHog

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y

    We use Proper for our insurance and it covers a lot of what you are talking about. Plus an umbrella just in case.

    Get a damage deposit as well. I do that even though we go through AirBNB and VRBO only.

    0Reply
  • Matt Mertz
    Leander TX · Member since 2020 · 179 posts · 150 votes
    3y

    We had the same concerns.  We solved it with security deposits.  OwnerRez has the systems in place to allow you to charge a real security hold on the guest's credit card.  It works with Airbnb, VRBO and our direct booking site (hosted through OwnerRez).

    We prefer security deposits over damage/travel insurance because the guest goes into the house with money on the line.  We think this provides a greater incentive to behave.

    In the time we implemented security deposits, we only had to dip into it once when a guest was super messy requiring another cleaning fee.  And we didn't have to deal with Airbnb AirCover to collect it.

    4Reply
  • Gulliver R.
    OP
    Rental Property Investor · Seattle, WA · Member since 2016 · 524 posts · 148 votes
    3y

    @Matt Mertz @Michael Baum@Brooklyn McCarty

    how much do you have your deposits set to?

    0Reply
  • Matt Mertz
    Leander TX · Member since 2020 · 179 posts · 150 votes
    3y
    Quote from @Gulliver R.:

    @Matt Mertz @Michael Baum@Brooklyn McCarty

    how much do you have your deposits set to?


     $750 security deposit.  Our cleaning fee is $375.  We have a cabin that sleeps 16 people so it's pretty big.  We feel $750 hits the sweet spot between being high enough to make people accountable without scaring them off from booking with us.

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y
    Quote from @Gulliver R.:

    @Matt Mertz @Michael Baum@Brooklyn McCarty

    how much do you have your deposits set to?

    We are at $500. Our house sleeps 10 or 12 in a pinch. Cleaning fee is $250.
    2Reply
  • Gulliver R.
    OP
    Rental Property Investor · Seattle, WA · Member since 2016 · 524 posts · 148 votes
    3y

    That's good info. Thanks you guys!

    0Reply
  • Trent Reeve
    Atlanta · Member since 2022 · 707 posts · 634 votes
    3y
    Quote from @Gulliver R.:

    Hi All,

    I have an STR that's on Airbnb and VRBO right now. But I'd like to build a directing booking site and put my STR on that as well. I like that you don't have to worry about getting a bad review on Airbnb or VRBO when getting a booking from your direct booking site. But what about when bad things happen? How do you protect yourself? For example: when guests break stuff, when they break the rules, when they have a party in your STR, etc.? What I like about Airbnb is that if the guest breaks the rules and you can prove it, Airbnb will have your back and allow you to kick the guest out with drawbacks. How do I protect myself from the bad stuff?

    Thank you,

    Gulliver


     how exactly do you think Airbnb has your back? do you think they are showing up at the door to make the guests leave? should be no different than if you do it yourself with your own booking.

    0Reply
  • Lisa Graesser
    Rental Property Investor · The Villages, FL · Member since 2017 · 341 posts · 397 votes
    3y
    Quote from @Trent Reeve:
    Quote from @Gulliver R.:

    Hi All,

    I have an STR that's on Airbnb and VRBO right now. But I'd like to build a directing booking site and put my STR on that as well. I like that you don't have to worry about getting a bad review on Airbnb or VRBO when getting a booking from your direct booking site. But what about when bad things happen? How do you protect yourself? For example: when guests break stuff, when they break the rules, when they have a party in your STR, etc.? What I like about Airbnb is that if the guest breaks the rules and you can prove it, Airbnb will have your back and allow you to kick the guest out with drawbacks. How do I protect myself from the bad stuff?

    Thank you,

    Gulliver


     how exactly do you think Airbnb has your back? do you think they are showing up at the door to make the guests leave? should be no different than if you do it yourself with your own booking.


     Charge them a refundable damage deposit 

    1Reply
  • James Nelson
    Member since 2018 · 9 posts · 3 votes
    3y
    Quote from @Michael Baum:

    We use Proper for our insurance and it covers a lot of what you are talking about. Plus an umbrella just in case.

    Get a damage deposit as well. I do that even though we go through AirBNB and VRBO only.

    How much is your damage deposit? How do you collect it?
    0Reply
  • James Nelson
    Member since 2018 · 9 posts · 3 votes
    3y

    Sorry just saw your answer later in the thread. Seems like 2x cleaning fee is a good rule of thumb.

    0Reply
  • Michael BaumPro Member
    Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
    3y
    Quote from @James Nelson:
    Quote from @Michael Baum:

    We use Proper for our insurance and it covers a lot of what you are talking about. Plus an umbrella just in case.

    Get a damage deposit as well. I do that even though we go through AirBNB and VRBO only.

    How much is your damage deposit? How do you collect it?
    It is just part of the standard payment. $500 smackeroo's. People behave when they have skin in the game. Most of the time...
    0Reply
  • Cliff H.Pro Member
    Rental Property Investor · Nashua, NH · Member since 2014 · 587 posts · 477 votes
    3y

    @Gulliver R.what others have said: the booking platforms are selling you on "faux safety" no more or less safe than direct booking with a deposit you control and refund as needed. Many channel managers have also caught onto the revenue available through STR per-booking insurance policies as well, which you can make mandatory on any direct booking stay.

    As the news outlets are finally realizing, the new hotness in the institutional STR market is already direct booking to cut out the platform tax:

    https://finance.yahoo.com/news...

    0Reply
  • Jarrod Covey
    Lender · Austin, TX · Member since 2018 · 241 posts · 136 votes
    3y
    Quote from @Gulliver R.:

    Hi All,

    I have an STR that's on Airbnb and VRBO right now. But I'd like to build a directing booking site and put my STR on that as well. I like that you don't have to worry about getting a bad review on Airbnb or VRBO when getting a booking from your direct booking site. But what about when bad things happen? How do you protect yourself? For example: when guests break stuff, when they break the rules, when they have a party in your STR, etc.? What I like about Airbnb is that if the guest breaks the rules and you can prove it, Airbnb will have your back and allow you to kick the guest out with drawbacks. How do I protect myself from the bad stuff?

    Thank you,

    Gulliver


    Good insurance that is molded to protecting STR operators is the best foundation for risk mitigation. I originally had Proper insurance covering my STRs, I now use Tower Hill Speciality. Half the price and the same coverage

    0Reply
  • Jeremy DeGrasse
    Real Estate Agent · Glenville · Member since 2019 · 7 posts · 1 vote
    3y

    Gulliver,

    I'm echoing most of the advice here.  Security deposit, ID and good insurance.  Not much else you can do.  The stats tell me that bad things will happen but overall guests are going to treat your places well.

    0Reply
  • Gulliver R.
    OP
    Rental Property Investor · Seattle, WA · Member since 2016 · 524 posts · 148 votes
    3y

    Thank you all! I’ve already reached out to boosty to get my direct booking site going.


    @Jarrod Covey  I’m using foremost insurance right night. It’s not expensive. How much are you spending on your insurance and what coverage are you getting ?

    0Reply
  • Jarrod Covey
    Lender · Austin, TX · Member since 2018 · 241 posts · 136 votes
    3y
    Quote from @Gulliver R.:

    Thank you all! I’ve already reached out to boosty to get my direct booking site going.


    @Jarrod Covey  I’m using foremost insurance right night. It’s not expensive. How much are you spending on your insurance and what coverage are you getting ?

    What I most liked about STR specific insurance was coverage if something happened and I couldn’t rent my place out. So if a pipe burst, they’ll pay for fixing the pipe, and they’ll replace the cash flow I missed out on by not being able to rent house

    Total policy with Tower Hill was $1340 
    0Reply
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