Security Deposit amount suggestion

[Erin58]

Hi - I was wondering if anyone had any suggestions on what to set the security deposit rate as? I haven't even seen it on very many listings but it seems like a smart thing to do. Just curious what amounts fellow hosts have decided on, and why.

Thanks!

Erin

[Dede0]

@Erin58, the security deposit is actually sort of unecessary, but it *does* serve a purpose. I say it's not really necessary because AirBnB will (with great effort on your part), work to resolve damage issues even without a security deposit. But I contend tha the deposit serves a purpose because it gives the potential guest something to think about when booking. In my opinion, it mainly exists to deter the type of guest who is most likely to behave irresponsibly or (rarely) criminally.

That said, I think that the size of the deposit should be relative to your nightly rate. If you charge under $50-60 per night, a $100-150 deposit might feel right. If you charge more than that but less than $200/night, then maybe a $200 deposit. If you charge $300/night and maybe require a one-week minimum and a $100+ cleaning fee, then maybe the deposit should be $300-500. And so on...

An important thing to know is that the guest isn't actually charged the deposit at all. Instead, AirBnB merely pre-authorizes the charge with the credit card company. Nothing gets invoked unless the host makes a successful claim on the charge.

[Shana0]

I have a $500 security deposit listed and luckily haven't had to make any claims at this point.  Just keep in mind that you can only report a claim within 48 hours of the guest leaving.  I make sure I go to the property within the 48 hours in case I need to make a claim. Also make sure your insurance company allows short term renting.  My primary company doesn't, so I have to go through a secondary company.

[Daniel127]

For the first 8 months of me renting out through Airbnb I didn't have a security deposit. I brought 3 separate issues (All smallish) to Airbnb through the resolution center and they all were resolved in my favour. Then recently I had a guest leave my front door key in my front door and it was taken. Luckily for me he wrote all of this through the website. He refused to pay anything, claiming that the room was overpriced anyway...Bla bla. For a few days I was totally crapping it thinking I would have to cover the cost of new locks which would have costed more than he paid for the 2 nights he was staying.. Thankfully for me Airbnb compensated me for the new lock as I could show a receipt but they wouldn't compensate me for my time off work. 

  I don't have anything of value in my apartment really but changing the locks was expensive. Since then I thought of the most expensive thing that could get broken  in my flat and now my security deposit reflects that. 

 I have once had a guest that smashed my shower door, was expensive to fix but luckily for me he took responsibility for his mishap and just paid me what the costs would have been. Lucky for me he knew that he was in the wrong, it was an accident I don't doubt it but could have been very costly for me had he not have been so decent.

  The first incident that I've mention made me realise that I needed the deposit since not everyone (Most do in my experience) is willing to pay for their damages and will do their best to get out of it.

[Leisa1]

Just a thought.  Once I raised my security deposit to $900 (regardless if the stay is two nights or two weeks), I had less problems with items walking away and the quality of my guests improved.  This was not on an Airbnb site but when I was screening and renting the property.  However, listed the cabin this year, I continued that same security deposit.  

[John-and-Heather0]

Good question--we basically set the security deposit at an amount sufficient to replace the most expensive single item in the home that might accidentally be ruined. While this won't cover intentional harm (a criminal guests), that is what one's personal VR insurance is for. That number is $500 is our large home, $300 in our tiny home.

While you may get more interest without it, I agree with other hosts that the quality of your guests goes up when you have a security deposit. We also have a contract and the primary guest must agree to pay for any accidental or intentional damage caused by their group, children or pets. More responsible guests are willing to put that money on the line, party animals are not.

Our mantra is "it's just a math problem."  We actually understand that accidents happen, and don't necesarily dock stars from a guest who understands and takes responsibility for damage ("I'm so sorry, we broke X, how much do we owe you?"). We only dock stars if there are clear rules violations, or if a guest lies to us.

Some hosts just raise their prices to "average out" their total annual damage by guests. We prefer the deposit, because then excellent guests get a better price, and there is a deterrent if individuals know they will pay for damage caused during the stay. That means less wear and tear on your home in the long run.