On VRBO, have you chosen damage protection or deposit? Why?

16 Replies

My thoughts:

Damage Protection:
Goods: The total cash paid by the guest at the time of the booking is less. Makes your property more accessible (at least on the surface).
Bad: Has a cost which is not used most of the time. I have setup the $59 for $1500.
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Deposit:
Good: Makes guests more responsible. Guest takes more care of the property, since you,  the host, are the only judge to decide if you retain or not the deposit in case of damage or issues.
Another Good: You can write in your contract that non respect of rules may lead to lose some of the deposit: Like noise, or a very unclean check out, etc... You can't file a DP claim for nuisance, for instance.
Bad: The out of the pocket cost shown at the time of the booking scares some guests. ($1500 in my case). And if you reduce the amount, you are reducing your protection.

I have tried both and I'm still not sure which way to go.
Airbnb's solution (neither one, just a virtual deposit, in case) is the best, IMO, but vrbo has not yet copied this one (I wish they would).

How are you dealing with this matter for those of you on VRBO?

I have tried both. I have settled on a $300 security deposit. Think about renting a car and you pay for the extra insurance. So what if the car gets an extra ding. You already paid for extra insurance so your covered. But if you had a deposit you'd take better care because you want your deposit back. I have never had to withhold a deposit except for one time. There was some burnt areas on s bedroom carpet. They paid the extra that the deposit didnt cover with no problems.

I don't charge any deposit or cleaning fee.  But my short term rentals are for people working at a refinery, not people vacationing.

My logic is this: most of the people I'm renting to are accustomed to getting screwed out of their money one way or the other.  They have told me that they have lost their deposits over really minor things like cig butts in an ashtray or empty beer cans on a table.  So I don't charge a deposit.  They usually leave it pretty clean.  I figure if I charged any sort of deposit, they will leave the place dirty enough to justify the extra work to clean it back up with the deposit money.

22 houses total.  At any one time there are usually 14-20 of them rented out.  Half are to repeat customers or to people staying 6+ months and paying every week.

I've tried both, and have decided to self-insure. I now have a $59 damage waiver fee and it is non-refundable. Over time the balance builds up in my account and will pay for any damage or lost items as needed.

I started this process about a year and a half ago for all 3 of my properties. In all of that time I've only had one situation that I would have kept any part of a security deposit for "damage" (to replace one new set of king-sized sheets.)

I'm in the "Airbnb has this one figured out camp" with @Kevin Lefeuvre but I hadn't thought of the damage waiver concept @Valerie Rogers is doing, that's interesting!  I have only kept one security deposit out of the hundreds we've taken and refunded.  That's a good chunk of change to realize as a secondary revenue stream to offset wear and tear and any actual damage. 

I've actually done both, but typically when it's more than 2 people, pets, or kids are involved.  I'll do the minimum insurance $59 and the $300 refundable deposit.  It has worked pretty well.  I've had to keep parts of deposits a time or 2 for broken/ruined items.  One time I had to file a claim on my sofa (which the insurance didn't fully cover), so the $300 helped.  

you may need both. If you use the damage deposit from a listing site, and they deny the damage, you may get nothing.

INSSURANCE on the expensive rentals. A deposit on cheaper ones...

I've beeN an Airbnb and HomeAway host on numerous properties for the past 6 years.  My experience has been that $59-79 on top of a $89/n studio may seem prohibitive to a guest.  Ponying up $500 that they'll get back in 14 days may seem more attractive -- but, I'd still consider this one a toss up.

However, in my "sleeps 14" ski condo INSURANCE is definitely the way to go.  My place sleeps a lot, and so, is often rented by large groups of "friends", no one with a majority stake in the collective negative outcomes of their behavior.  Towels get used on the shoes, fancy cutlery goes missing, no one wipes their feet, wine stains... Being forced to make a claim directly against the guest needlessly puts guest and host in severe conflict.  I've done both, and I'd much rather make a claim with the insurance company than call out my guests.  If you want to hear screams, just tell a guest that $500 of his/her deposit is being withheld.  You'll be the lying anti-Christ and they, Angels.   :)

I disagree with everyone saying that Airbnb has this right. I’m dealing with this exact issue as we speak.

Here’s the details:

Guest makes a reservation through Airbnb. At the time of booking guest agrees to house rules which specifically states fees for various items. In my case the only two that apply are no smoking $300 violation fee and $125 lost elevator key fee.

Guest loses elevator key, smokes in unit, causes various damages.

I message guest about damages. No response.

I escalate to Airbnb. They inform me that FEES are not covered and they will not be paid out. That no smoking clause is basically worthless and unenforceable. I had to submit a receipt for the replacement elevator key and they are only considering the actual costs (not the $125 as stated which covers my time in handling). I had to submit receipts for every dime (they won’t accept invoices created by me for time time) and it’s been two week and still haven’t heard back or received an update.

If you have a deposit, like on VRBO, this would have been a quick and easy process. Airbnb security deposits are garbage. They don’t even charge the guest. My total claim was LESS than my ‘security deposit’ but since the guest isn’t responding Airbnb will not charge it. No idea if I’ll even see a dime.

That is what I heard about airbnb's deposit. It is my belief that going to a lot of trouble for anything less than 1 or $200 is not worth it. And what what Airbnb think about you for trying to get your money? Will it impact your listings in their placement? Cost of doing business. If you must, filing in small claims court

Extra fees and deposits chase off bookings and lower your yields substantially. Damages are rare. I've owned one STR since 2005 that is occupied 240 nights a year and have incurred $1000 damage tops in 14 years.

If you need an extra 300 bucks deposit to help you sleep at night, it could be costing you 20-30-40 times that in lost rents each year.  That adds up to a LOT of lost income over a few years over an occasional broken stool or lamp.  

Penny wise, pound foolish.

I do both. Charge the $99 for $5K coverage and $500 deposit directly from guest (these are million dollar homes). The $500 cash deposit keeps the guest in check cause they know they have their hard money on the line. Plus, you can't go after the insurance company for extra cleaning fees or stuff you can't prove to their satisfaction. 

I have had better luck with the security deposit on VBRO.  I have found the CSA damage protection policy was worthless.  I use to make all guests purchase the $1500 policy.  I finally had the opportunity to file a claim.   The filing process was simple.  I was able to upload photos easily.  I received a notification quickly that a claim specialist would contact me in just a couple days.  Almost 2 months later, I have never heard from a claims specialist, instead I just received a notification that my claim was denied. There was no reason why indicated nor anyway to contact them listed.  Needless to say I no longer make guests pay for worthless polices that do not help me or them  (Just increase your rental by the $59 and put it in the bank to cover unexpected damage(s).

Remember that apartment you rented and they wouldn’t refund your deposit even though you left it spotless?  So does everyone else, which means it is false economy to charge damage deposits.  People are highly suspicious of damage deposits, as well they should be. You will lose far more in reservations dollars than any damage you might pay for with deposits.


VRBO and Airbnb have already figured out how to tack on big chunks of junk fees, so you don’t really have opportunity there, either.