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How does the Airbnb Security Deposit Work for Hosts?  - Vacation Rental Guide

More often than not, when a guest checks in to a hotel their credit card details are taken as a buffer just in case any damage is done to the hotel property by the guest. Similarly, Airbnb hosts can charge a security deposit of their choosing which is usually but not always 60% of a listing’s nightly rate multiplied by the number of nights with a cap of $5000. It is not mandatory for hosts to charge a security deposit, but, it goes without saying that guests will be more cautious of how they handle the property if they know they could be charged for it.  

In a nutshell, the Airbnb Security Deposit is a security measure taken by hosts to make sure that their vacation rental home is taken care of by guests regardless of the wear and tear. 

How does Airbnb Security deposit work? 

A popular myth that seems to be widely believed by guests is that they have to pay the security deposit amount to the hosts. In reality, however, an authorization hold for the security deposit will be placed on the payment method that was used to book the accommodation 48 hours prior to the check-in date. No money is paid to the host unless a claim is made (with proof) within 14 days of the guest's check-out date or before the next guest checks in, whichever comes first. If the host does not request the security deposit within this amount of time, the owner will no longer be able to retrieve the deposit. 

Note: Security deposits must be handled through Airbnb. Handling them in cash or through a third-party payment method is a direct violation of Airbnb’s Terms of Service

The pros and cons of adding an Airbnb security deposit to your listing

The pros: 

  • You will be able to claim for damages without having to pocket out for it or having to draw from your vacation rental insurance policy. 

  • It will encourage guests to be mindful of how they handle your property. 

  • It will deter guests with ill intentions (such as throwing a party without your permission) from booking your property 

The cons: 

  • Not all guests are comfortable with having a portion of their funds on hold for a period of 14 days. 

  • Makes guests suspicious of hosts and deter them from booking your property. 

Step-by-step guide on how to add a security deposit for your listing. 

Step 1: Log in to your host login page. 

Step 2: Click on ‘Menu’ 

Step 3: Select ‘Listing’ from the drop-down 

Step 4: If you have multiple listings select the listing that you want to add the security deposit to 

Step 5: From the menu on the side select ‘Policies and rules’ 

Step 6: Click on ‘Edit’ next to ‘Security deposit’ 

Step 7: Type the amount you want to charge. Make sure it is somewhere $100 and $5000 

Step 8: Click ‘Save’ 

And you are done! You now have a security deposit charged on every guest who makes a booking after this. While it may throw off a few suspicious guests from checking in to your property it will definitely keep those with ill intentions away. 

Security Deposit Issues 

A security deposit issue occurs when a property owner wants to make a claim from the security deposit. This should be taken care of soon as Airbnb can only hold on to the money for a stipulated amount of time (14 days). It is important to consider this when making claims. It is also important to ensure you have all the required documentation and proof required to submit the claim. 

How to make a claim against Airbnb’s security deposit? 

The claim process is not automatic. To file for a security deposit claim, you will have to go through Airbnb’s resolution center and send all the required evidence from bills and receipts to photographs, CCTV footage if available and all evidence to indicate that damage has occurred during the guest’s stay and the information that denotes actual cash value for repairs or replacements of all damages. 

It is only then that Airbnb will go about collecting the deposit via the dispute resolution center. Through Airbnb’s dispute resolution center host and guest (with an agent from Airbnb as a middleman) can come to an agreement on how much of the damage will be covered by the guest and how much will be covered by the host.  

In conclusion: 

Collecting damage deposits is one of the most effective methods of ensuring your Airbnb remains in the best possible condition. It gives hosts peace of mind, knowing that potential damages can be resolved without having to break the bank or having to claim from the vacation rental’s third-party insurance provider.  

There are heavy chances that it may put off guests looking for shorter stays, however, it will most definitely stop troublesome guests with questionable intentions from visiting your property. 

A quick go around to breaking the myth about damage deposits is to take time to talk to guests and explain that their money will be refunded in full provided that they don’t cause any damage to your property and adhere to the guidelines highlighted in the agreement you shouldn't have any issues setting up a damage deposit for your property. 

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