Every year, vacation rental homeowners hope that a few of our past tenants will choose to return to our homes the next season: they obviously are a great fit and love the home, and we can trust that they will be responsible tenants. But how do you deal with a return tenant? Do you charge them the same rate, even if you have raised it for next season? Do you insist on a lease and security deposit again? How long do you give a past tenant before you require a commitment from them to reserve a specific week, what’s more send you a deposit?
Rental payment timing and amounts: Many of our homeowners generously reserve stays for their past tenants with no commitment requirement until January. But can you afford to turn down prospective vacationers who might inquire in the meantime?
We recommend that you extend to your past tenants a right of first refusal policy soon after they express an interest to return. Explain that you will tentatively hold the week for them but only until you receive an inquiry for the same week. At that point, you will notify them and insist that they commit to the week with a signed lease and deposit within a day or two.
And if they want you to reserve the week, they should be willing to give you a deposit. You could suggest half of the week’s rent up front and the remainder 1 to 3 months prior to their arrival. Or you could suggest a smaller, up-front deposit, perhaps 20%-30%, then another deposit in January/February, and the final payment 1 to 3 months prior to their arrival. Read more about pricing and payment schedules.
Pricing: It’s advisable to reward past tenants with a bit of a discount, but don’t feel that you have to honor the same price you asked 5 years ago! We usually suggest that you offer the rate that you asked before your last increase. In other words, if you charged them $2,000/wk for this past season, let them know that you will reserve a week for them and charge them the same rate despite the rate increase for others.
Lease: We encourage our homeowners to insist on a lease even for past tenants. Sure, you may have had a great experience with them last season, or even for the past few years, but things can always change. It’s just safer, more professional, and of benefit to both parties to use a lease. It costs you nothing and takes very little time for you to prepare one – why not protect yourself?
Security deposit: Although not as important as a lease, it is a good idea to continue to require a security deposit – regardless of the way your past tenant left your home the last time. Again, things change, and it doesn’t hurt to have that added incentive for your tenants to continue to respect and care for your home.
For those of you who use our website’s email marketing feature to contact past tenants, consider editing the template you use for it to convey your policy regarding return tenants.
Do you have any other tips for dealing with past tenants while still seeking new ones?
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