January 17, 2023
7 Vacation Rental Property Policy Recommendations
Thoughtful, clearly articulated vacation rental policies and procedures serve multiple purposes. They set expectations for your guests, protect your property and your business from unfortunate situations, and make it possible for you to operate legally in your market. Here are seven vacation rental policies you should consider adopting.
You require timely payments in the full amounts to operate, which make rules and procedures around payments essential. While every business model is different, here are the top recommendations.
It’s important that you spell out how you expect to be paid—how much by what date, and which method. You might consider adjusting payment amounts depending on the reservation: for example, a one- or two-night booking made a day in advance may require full payment upon booking, while a two-week booking made six months in advance may require final payment at least a month or so before check-in.
In terms of the type of payment, choose a method that is easy to verify and track: credit or debit cards, PayPal, or direct bank transfers. Cash, cash apps (like Western Union), or a check are not a great idea, as they leave you open to scammers.
These are used to hold a booking for someone, should cover roughly 30–50% of the final booking, and should go towards the final cost. A rental deposit gives you time to confirm that a payment method will work (and investigate if something seems amiss), and covers you in case something falls through.
A security deposit is typically a refundable deposit that acts as a “safety net” in case of unexpected damage. This one can be challenging since vacation rentals experience much more wear and tear than a long-term rental. If you find yourself needing to tap into the security deposit, be sure you have photos and an estimate of the damage to defend your choice. You may also want to consider spelling out the kind of damage that you consider worth withholding a security deposit.
There are a variety of cancellation policies in the vacation rental industry, with some that are more restrictive than others. OTAs, for example, offer their hosts a handful of policies to choose from depending on their preference.
The cancellation policy’s purpose is to ensure that you and the homeowner are receiving compensation if a guest cancels last-minute. But it’s also an opportunity to connect with your guests by making the policy as guest-centric as possible. That’s why, of all the kinds of policies, we recommend a “relaxed policy.” Here are two examples from popular OTAs:
- Vrbo policy goes like this: Vacation rental guests can cancel up to 14 days before check-in for a 100% refund or between 14 and seven days before check-in for a 50% refund.
- Airbnb is even more flexible, stating that guests will receive a full refund if they cancel a full 24 hours before check-in.
However you set your cancellation policy, make sure that it’s clearly laid out, easy to understand, and that it allows guests some flexibility.
Your deposit requirements and cancellation policy are some of the most vital policies. But there are others that you may want to consider adding because it makes sense for your specific business.
Whether or not to allow pets (and what kind) is a big decision that you and your homeowners should discuss at length. While pet-friendly rentals do tend to earn more revenue and appear in more search results on OTA websites and popular search engines, it’s a personal preference.
If homeowners do decide to host pets, then you need to decide how you want to charge for a four-legged guest. Will you set a daily pet rate? Require a deposit (or increase your security deposit to compensate)? Will you set species restrictions (yes dogs, no cats) or breed restrictions (check the property’s insurance to see if they set any limitations)?
Some property managers in certain markets will set age restrictions on their rentals, particularly those in spring break locations. They may require all renters to be over the age of 25 (and require ID to prove it). They may also require the credit card holder to be over 25. If college-age parties concern you or your homeowners, this may be a helpful policy to add.
As with an age restriction, some short-term rental managers opt to restrict their occupancy, even on their larger properties, to dissuade guests from throwing parties. This policy can be supported with noise-detection technology like NoiseAware.
You may also choose to limit the occupancy of a rental to cut back on the wear and tear, especially if the home is older or of historic significance. Limiting occupancy can ensure that homes of special significance, like those on the National Register of Historic Places, those with particularly beautiful architecture, or homes that are treasured family heirlooms can remain in good condition.
These policies and procedures are here to protect your business, your reputation, and your properties. Adjust them to suit your own business needs and your homeowners’ preferences so that they are effective, fair, and reasonable.