All You Need to Know About Airbnb Security Deposit
Airbnb security deposit acts as a shield for the hosts against the small damages caused by the guests. While some guests consider it necessary to charge a security deposit, the others are not so sure about it. Every host has to decide whether to charge an Airbnb security deposit or not. The hosts also get to decide the amount they want to be charged which can vary from $100 to $5000.
Significant damage to the property may be rare, but small damages and cleaning issues are common. You can use the Airbnb security deposit to cover various small breakage or damage ranging from breaking of a wine glass to finding vomit on the floor. It seems fair to ask the guests who caused the damage to pay for the repairs or the cleaning. But there are certain cons of the Airbnb security deposit as well. Charging a security deposit is not always the best step.
Before deciding whether to charge an Airbnb security deposit or not the host should understand its meaning and functioning. Airbnb security deposit can be both an opportunity and a threat. Every host has to decide wisely to charge or not to chare.
Definition of Airbnb security deposit
Airbnb security deposit is the amount the hosts charge from the guests in case any damage is caused during their stay. If the guest is held responsible for damage then they are required to cover the consequent bills. All the damaged items, deep cleaning requirements, breakage, or stolen items will be covered by the Airbnb security deposit. If the guest is responsible for the damage then the guest will pay for the repairs through the use of Airbnb security deposit.
The nature of Airbnb security deposit
- How to add a security deposit to your listing?
Hosts can charge Airbnb security deposit through the website only. There is no method to charge a security deposit without involving Airbnb. If you decide that you want to charge a security deposit then you have to add the information to the listing. For doing this you have to go to Listings, then select Pricing, next click on Edit, and then enter the amount under the security deposit option. Now all the travelers interested in your property will know that you require a security deposit.
- How is the Airbnb security deposit charged?
Airbnb security deposit is not charged when guests book the property. Airbnb informs the guests that they will be charged up to the specific amount you mentioned if they damage your property and no advance deposit is requested.
If after the check out your property is in the same state as before the check-in then no charges will be requested. But if there is any kind of damage caused during the stay of the guest, then the security deposit will be charged. Airbnb security deposit follows an organized system in order to ensure the safety of the hosts as well as the guests. Airbnb wants the uncertain losses of the hosts to be covered while protecting the guests from unnecessary exploitation.
- How is the claim for reimbursement processed?
The hosts are given 14 days from the check out date to claim for any damage, breakage, or theft. If a host wants to claim a charge on security deposit then he/she has to contact the Resolution center of Airbnb. The host is also required to submit the relevant documentation supporting their claim. Airbnb allows the host to contact the guest through the resolution center. Hosts are expected to politely ask for reimbursement and settle the dispute. If the guest agrees to pay the security deposit then Airbnb will process the payment and the host will receive the required amount.
- What happens if the guests refuse to pay?
In case the guest refuses to pay the charges, then you have to contact Airbnb. Now Airbnb will take care of the matter as per the terms and conditions of Airbnb Host Guarantee. Remember, Airbnb security deposit and Host guarantee are two different things. Airbnb security deposit covers the general small damages while host Guarantee protects the host against the rare huge losses. While the Airbnb security deposit is limited to $5000, the Airbnb Host Guarantee extends to $1,000,000.00
When Airbnb handles your claim after the guest refuses to pay then you can not contact the guest. Airbnb will request for the payment, process it, and deliver it. Airbnb needs to follow the whole procedure to ensure the convenience of both the hosts and the guests. It may be a systematic procedure, but if your claim is valid you will receive the payment eventually.
Now you understand the functioning of the Airbnb security deposit so it’s time to read the pros and cons and make the final decision.
Advantages of charging Airbnb Security deposit
- Protects your property
When you charge security deposit then guests know that they will be charged for any damage they cause to your property. The fear of being charged will persuade the majority of the guests to take good care of your property.
Whereas if you don’t charge Airbnb security deposit the guests will be carefree and would not think twice before damaging your property. The majority of guests will protect your property only when they will be held responsible for the damages. Airbnb security deposit helps the host to inculcate the sense of responsibility in the guests so that your property is safe.
- Covers the losses
If the guests cause any damage to your property you can request for reimbursements. When you charge security deposit all the breakage, theft, or damage caused by the guests are covered by the guests. If you do not charge an Airbnb security deposit then you will not be able to request the guests to pay for the small damages caused by them.
If you want the repair bills and deep cleaning charges to be covered by the guests who are responsible for the mess then you should charge a security deposit. Airbnb security deposit is the only way to cover losses caused by the small damages during the stay of a guest. While Airbnb Host Guarantee takes care of the big losses the Airbnb security deposit protects you from the petty damage costs.
- Offers a sense of security
You feel relieved after charging a security deposit from the stranger you allowed into your property. The thought that a stranger could do anything to your precious property could be terrifying. Airbnb security deposit is the stress relief that assures you all the damages will be covered by the guest. As a host, you have to take care of both the guests and your property. You can not risk your property nor the comfort of your guests. It’s the Airbnb security deposit that allows you to maintain the balance.
Disadvantages of charging Airbnb Security deposit
- Discourages travelers to book the property
A security deposit is a deal-breaker for certain guests. Charging security deposit could lower down the number of bookings affecting your business adversely. Airbnb security deposit acts as a repellent for some guests. The guests doubt that they will be charged wrongly and will be exploited in the name of the security deposit.
Many guests are not aware that you don’t have to pay a security deposit upfront and that is why they frown the idea of security deposit. Guests feel that the Airbnb security deposit is not safe for them. Furthermore, the low budget travelers do not require an additional charge to attack their budget. Travelers tend to ignore the other qualities of your listing just because you are charging an Airbnb security deposit.
- Confusion and additional inquiries
By looking at the Airbnb security deposit mentioned on your listing legion questions pop up in the guests’ minds. Airbnb security deposit provokes the potential guests to inquire more. A question like When to pay a security deposit? How is security deposit charged? How can I trust the Airbnb security deposit? Are very common and will be asked frequently. If you charge a security deposit you have to engage in clarifying the confusion as well. You are required to devote time and answer each and every inquiry. Guests will book your property only when all the questions are answered and they are satisfied by the responses.
- Increases the gap between a host and a guest
Airbnb security deposit widens the gap between the host and the guest by using the tool of trust. The guests feel that you are asking for the security deposit only because you don’t trust the guest. Bad relations with the guest could lead to a bad review.
Airbnb security deposit is both a protector and a repellent. It protects the hosts while repelling the guests. Security deposit is a sensitive issue for some guests and thus it risks the progress of your short-term rental business. Now you are aware of the meaning, working, advantages, and disadvantages of the Airbnb security deposit. So, you are ready to decide whether to charge or not to charge. Consider all the aspects of the Airbnb security deposit and then take a wise and fruitful decision.
If you manage multiple accounts and listings on Airbnb, then it could be difficult to update security deposit on each listing individually. To avoid the exhaustive logging in and logging out from individual listings you can use Hosty’s Airbnb management software. Hosty will allow you to manage all the listings from a single dashboard thus it will be easy for you to update security deposits on all the listings and manage all the properties with ease.