Official Airbnb Policies on Deposits and Host Guarantee

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To Be Continued..

Hello Guys, I’m back!

My name is Diego Demelas and I’m an Airbnb Super Host.

Let me tell you my short story on How To Start an Airbnb Business With no Property? The True Story of Aribnb Life..

 

For who don’t know who I am, please check the >>> welcome post here.

So recapping.. In the previosly episode we have talked about The Cheapest Way To Pick Up an Income Property but time is gone so I left you guys almost here.

So the deal here is to basically find landlords that needs you.. These landlors are hurting because they still have to pay their mortgage but they have zero cashflow, zero income becuse some times is hard. The winter is extremely hard in here.. Is just really hard to find new tenants, so you know you just need to play smart enough to catch the right deal at the right time! So these landlords, the ones who have the occupancy issue that’ll want that problem fixed they’re likely says yes to you, you take over the property, you furnish it and you put it on Airbnb. You might end up like me not paying the first month rent, not paying the last month rent, just paying half of the security deposit that they asked for each unit with just a bit of negotiation and be able to start making some great money since the first week of lease.

Welcome back to Airbnb Life! In the last episode we have talked about The Cheapest Way To Pick Up an Income Property so Today we’re going to talk about the Official Airbnb Policies on Deposits and Host Guarantee.

Airbnb has RARELY given straight answers on how security deposits work, until today. In this airbnb tutorial: Airbnb hosts, here is a series of emails i received from airbnb directly on security deposits and host guarantee payouts. What deposits can be used for, (what you cant) and more. This definition is part of a playlist called Airbnb MBA, created by Airbnb Life. Subscribe for more blogs! Airbnb Life is committed to providing you the best Airbnb advice possible, real Airbnb hosting tips, Airbnb strategies that you can apply, and short term rental reports and news in real time as we discover information that you need to know.

We hope to be your number 1 source for Airbnb instruction. So let’s go trhough the very today’s topic guys!

An Airbnb security deposit is an optional feature, something that you can add to your listing or a guest would agree to put on hold with you, a couple of hundreds of euros per say, in order to make sure that everything gets paid just in case anything gets broken or stolen. Or so we think that’s how a security deposit should work but that’s not how it actually works, and this article has been so hard to make for you because I’m having the hardest time to get the straightest answer from Airbnb until yesterday..

They sent me a few emails and I had a conversation with somebody who’s finally fourthcoming about the security deposit proccess, and this is going to help you understand what is a security deposit, how does it work, how can you use it, what can you use it and what can’t, so the pros and cons of the security deposit and what you should plan to do either way security deposit or not..

See, guests don’t understand either, and this is going to matter big time later in this article, and hosts are learning that a security deposit doesn’t actually charge a guest for anything when they agree to one. So, the way the security deposit works for Airbnb is you can advertise a 200€ security deposit and let’s say the reservation is 100€ per one night, 50€ cleaning fee and those 200€ of secutiry deposit.. The guests will see 350€ of charge in the advertised costs of the reservaton on the Airbnb platform, but when they’ll go to check out they actually pay only 150€.

A lot of guests won’t even get that far because they could get deterred by your 200€ security deposit, so this is actually the first visual con of the security deposit, but people argue this.. The pros and cons of that are, bad guests won’t book with you because they don’t want to like potentially lose their money cause they’re going to do something worng. Sure! But also new guests on Airbnb, like who you have no reasons to believe that they’re bad guests, they don’t want to put that big deposit down because they’re used to stay at hotels the entire times that actually charges you 50€ security deposit per night for incidental instead of 200€ like you do, so they’ll be turned off by that. and savvy Airbnb travelers who are good guests too but know that results may vary with hosts what they’ll find is, they might not trust you as a new host to give you that much money on security deposit. They might not want to risk it because they don’t know what kind of host you are.

So if somebody stays with you a few more times, they might book with you again, but by then you’ll know wether or not you’ll need the security deposit for that kind of guests. So security deposit, in this way, can make getting booked harder even though there are hosts that actually successful implemented security deposit, but let’s dig down into it a bit more..

Security deposit are for damages and loss only! Not for fees, so you cannot claim the security deposit for smoking fees per say.. for example let’s say you have a pet fee. Some people have pets and some don’t, so you’ll put a pet fee only for pet owners and let’s say it’s in your house rules, which is where it actually has to be, 50€ pet fee per say. That guest needs to pay that pet fee before they arrive, and if they won’t do it in time, you can actually ask Airbnb to cancel tjeir reservation in accordance to your cancellation policy, that means if you have a strict cancellation policy and then the guests doesn’t pay the 50€ pet fee before they arrive, you can cancel them and the won’t get a refund because they didn’t pay the pet fee and so they broke your house rules.

But, as soon as that person or guest checks-in Airbnb cannot enforce any fees! So smoking fee and stuff like this can’t really be done because they have to check-in and only then be actually able to smoke. But you can still advertise this home as a smoking listing for an extra 50€ per day if you’re wiling to get paid for it and so before they arrive you can actually collect it, but we basically don’t want smoking people and that’s why we put that rule in all our listings..

I honestly have had Airbnb pay me for my smoking fee, I have had Airbnb paying me for an extra cleaning fee for being too dirty, I mean more dirty than what was supposed to be. so this is actually up for Airbnb interpretation, but let’s say you want to use the security deposit to collect on something like this.. You need to prove the associated damage for, you cannot  collect the fee but you can collect costs in relation into the specific action.

So, le’ts say somebody actually smokes in your home, and your costs to remediate to smoke smells is 150€ rental for an ozone machine, and then you have like 4/5 hours of extra labor for your house keepers to come and clean it at 35€ per hour  which is 270€ in costs and if a company bills you that amount and invoice yo,u then you can charge them with proof of that invoice and you don’t have to file the host guarantee because that is damage related to labor. So if they don’t have a security deposit because you didn’t collect one, you take that invoice and then you’ll file a host garantee.. So this works too and it’s basically what we do when things goes wrong. So we do so many of these even though it’s about of 20/25 € and let me explain why..

That’s the hard truth about being an Airbnb host. See, a hotel would charge a card say 50€ per day for incidental and they will bill you for any of those mistakes, but a lot of hosts out there, if a guest ruined a set of sheets they won’t charge them cause they’re afraid of a bad review or they think it’s pity. Now, I really don’t like getting bad reviews so I usually try to hold off and charge them a couple of weeks later and we’ve done different articles for that, but I’m telling you, do not take a bunch of 20/30 € losses just because you’re trying to be a good person. See, in slow season especially let’s say you only have 20/25€  on the reservation for a single night stay, some how after the cleaning and operational costs, so if somebody have done 20/30 euros of damages there will goes out of your profit, and that’s why you really need to look out for you, you’re running a business here right? You’re not running a charity!

You can go to the host garantee and you can charge people for as little as 10/20€ for those little things. The smaller the amount is the more relaxed Airbnb tends to be about that stuff and some times they tends to pay all those little money even without going through the host garantee process, but as soon as it starts to get big they won’t..

  • You need proof of ownership
  • You need proof of damage
  • You need to contact Airbnb before the next guest checks-in
  • And if it’s a loss like a theft for moe than 300€ you need a police report.

You can chose to cut the security deposit and be able to chase away a peace of this, but in my experience big security deposits scares away small reservations and we do a lot of small reservations.. So if you really want to cover your tail, you need to focus on the host garantee  more than anything else. I just really recomend to get extremely good at the documentation process and the resolution process for host garantee.

I hope it was helpful, I hope you’ve been enjoying this little blog format thing, so live your dream, take only some risks and if you have any questions leave them in the comments! If you like it or not, just let me know in the comment or just contact me with the side form. Let me know what do you think about it and how does it better works for you..

Thank you guys to follow me and to read this blog! I’m just sharing my experiences trying to help you as much as possible to scale your business and become a Full Time Airbnb Super Host 

Time for now is gone! I will tell you more in the next episode. So Keep in touch guys, we’ll catch up soon!

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I wish you the best guys, and we’ll catch soon in the next episode of Airbnb Life! 😉

Caka Iela – Riga – Latvia

Caka Iela - Riga