VRS151 - The Case For Abandoning Vacation Rental Damage Deposits

This episode might trigger some argument and I think that’s a good thing. It’s a discussion that’s populated forums across the the VR world since the business really began and as we move into the mainstream of tourism accommodation we might need to revisit our practices.

Why do we insist on punishing 98% of our guests for what we anticipate the 2% might do.

On the one hand are owners who will argue their case for damage deposits thoroughly and will never back off on insisting they are covered for potential damage. Then there are those who trust in their guest’s honesty and transparency and have never taken a deposit.

I’m in the second camp.

Here’s some of our statistics.

Over 10 years of managing 6 of my own properties we charged one guest for a broken hot tub cover…and even that was because I got personally offended because the guest rubbed me up the wrong way. In retrospect I would probably have let that one go as well given the stress and anxiety it caused.

That is not to say it was the only issue we dealt with. There were broken beds; stains on mattresses and linens; broken knobs on appliances; cracked toilet seats; disappearing towels; tears in sheets

In an average year we’d be managing 180 rental periods. You can do the math here.

Similarly, in our rental management company we have minimal damage reports.

In an average summer we’ll check out 1500 families, and this year we dealt with a handful of significant damage issues.

As an agency we play a different role since we have two distinct groups of clients – our rental guests and owners.   A damage report from an owner triggers a robust investigation that involves examining photographic and video evidence, and then mediating between the two parties.

It’s a lengthy process and one we’d rather avoid, so we’ll often pay the owner the amount of damage claimed and save ourselves the considerable cost in time and stress involved in pursuing it.

This doesn’t mean we allow our guests to “get away with damaging property” as one owner put it. Rather, we err on the side of tolerance and understanding that the majority of our issues are purely accidental, and a result of guests being in unfamiliar surroundings.

In this episode I talk about the range of damage issues we’ve dealt with over the last 15 years; what owners can do to protect themselves and the insurance alternatives that are available.

I cover:

  • The pros and cons for collecting damage deposits
  • Whether having ‘skin in the game’ makes a guest more careful
  • Damage versus wear and tear, or when the leather finally splits
  • How to combat being offended by the actions of guests
  • Why we can’t blame a single guest for a broken bed
  • Cost benefits of self-insuring and other insurance options
  • 5 tips for reducing the risk of damage to your home

Rental Guardian

CSA Damage Protection