Financial Matters • Guest Communications • Managing Your Vacation Rental • New to Renting

Quick Tip: What to charge for off season security deposits

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by Elizabeth Weedon
Written by Elizabeth Weedon
5/5 - (4 votes)

One of our homeowners recently inquired about whether he should require the same security deposit for an off-season and/or shorter stay rental as he does for an in-season, weekly one.  

We recommend that you require the same security deposit in the off season as you do in the high season. The reason is that, regardless of the season or your weekly rental rate, the security deposit is meant to both incent your vacationers to leave your property in good condition and to protect you financially in case they don’t. The cost of any damage is the same, whether in season or out. And, even if someone were to stay for ONE night, your risks are the same as a longer term rental, and you should protect yourself adequately.
 
Now, we understand that you may get some push-back from an off-season, short-term vacationer. But you can give them the above reasons to defend your policy – and you can also back off on a case-by-case basis if you choose.

See our other posts related to security deposits:
Security Deposits – Too Much or Too Little?
Withholding Security Deposits – Know Your Rights

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About the author

Elizabeth Weedon

Elizabeth Weedon - Although I’ve worked for WeNeedaVacation.com since 2008, I’ve been a loyal homeowner on the site since early 1998, just a few months after the website was launched by the Talmadges. I grew up summering on the Vineyard and managed my family's rental home there since the mid-1980’s. I’m passionately devoted to the Vineyard – and to WeNeedaVacation, which I credit with enabling me to hold onto the special property that has been in our family for nearly a century. An enthusiastic member of the WNAV Homeowner Support Team, I endeavor to keep my finger on the pulse of the Cape and Islands vacation rental industry so that I can provide homeowners advice about how to ensure their booking success with us. With owner Joan Talmadge, I am also responsible for editing and writing much of the text on our website, our monthly newsletters, and Homeowner Blog posts.

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2 Comments

  • If you take a security deposit on a 30 day or less rental, do you have to have a W9 from th guest, and open an escrow account, or can I put it in the company escrow account for sales escrow?
    Please advise,
    Holly C

    • Hi Holly. Good questions. I recommend checking state Landlord/Tenant laws, but in general, only rental periods of one year or more require an escrow account separate from the landlord’s personal bank account. This is because landlords must also return the interest earned on the security deposit at the end of the rental. As for a W9, these are most commonly used to request the taxpayer information of someone you’re paying. You then use the W9 to issue a 1099 which allows you to claim the expense on your taxes. Since vacationers will be paying you, you wouldn’t need to use a W9. If they want to claim the expense of their stay in your rental on their taxes, they can use the Lease Agreement as proof of payment. Best, Shannon