You’ve got the newsworthy piece of vacation rental property to rent out. But why aren’t you getting the amount of bookings you’re expecting? Your potential tenants may be happy with what they see on the property, but not on the contract.
How can you, the property manager, make sure that you give potential clients of your vacation homes for rent a deal they won’t back out of?
The Security Deposit
Each time an interested party commits to staying at your vacation rental property, you open yourself up to a number of risks. As the property manager, you want to keep yourself safe from unplanned costs. That’s exactly what the security deposit is for.
However, there are times when the security deposit turns people off, leaving you with no additional costs, but no profit as well. So how do you find that perfect balance between risk-reduction and customer satisfaction?
These aspects play a huge role in figuring out if your security deposit is fair enough for both you and the tenant:
- Property Value
How much are the fixtures installed? How much were the costs for redecorating the place, or for modernizing the plumbing system? Things like these determine the overall value of your Vacation rentals. The area where the property is found also contributes to this overall price.
Evidently, the higher the value of the property, the bigger the security deposit should also be.
- Rental Price
How much is the daily or weekly rate for your vacation homes for rent? Most of the time, the security deposit is equivalent to 10% of the total rent. For others, they mandate a fixed amount, regardless of how much the rent is. This would all depend on the property and what’s inside it.
- Furnishings
Although the need for remodeling and renovations only come once in a long while, the need to replace or repair furniture may come more often. Remember that furnishing go through wear and tear at a faster rate, mostly due to frequent use.
Of course, if your Vacation rentals have expensive furniture, this means that the risks are also higher. In effect, a higher security deposit is also in order.
- Rental Instructions
One way to make sure everything is in proper order before a tenant comes in and after a tenant leaves is having a clear set of instructions for them to follow. Have these instructions printed and placed in visible areas around the vacation rental property.
When you have clear instructions, it is easier to justify any damage that can be caused by the tenant not following the instructions. Of course, the security deposit covers these kinds of damages.
Make sure the amount and the terms related to the security deposit are clearly stated in the contract. It is also best if you check around on what the standards are to make sure you are at par with the entire industry.
The Cancellation Policies
This is another common turn-off for potential tenants.
It is understandable for you to have cancellation policies. After all, sudden cancellations would not only mean wasted time on your part in terms of preparation, it also means that you hinder other potential tenants from renting your space and end up not renting to anyone at all.
Although the act of having a cancellation policy in place is justified, the important thing here is making sure it remains fair to the tenant. Extremely strict policies would only result in people feeling too restricted, while having policies that are too relaxed heightens the risk of loss on your part.
For a lot of Vacation rentals, having policies that give back 100% refund in the booking is cancelled 30 days or more before the scheduled date of occupancy is considered as moderate and fair. A 50% refund is often given to those who cancel at least 2 weeks before their schedule, while those who give very little warning do not get refunds at all.
Of course, this would also depend on how high the demand for the property is. For example, you can set stricter cancellation policies during peak seasons, but you can tweak them a bit and make the rules more relaxed during the off-peak months.
Policies are good, especially if you want to keep yourself and your property protected. But you have to remember that making your policies extremely strict would easily turn off potential tenants. Always find the right balance to ensure that both you and your customers are happy. At the end of the day, these happy tenants will be your source of success. Their satisfaction means increasing the possibility of them referring you to their own networks, increasing the number of bookings for your vacation homes for rent.
