There are a few options:
1. Take a personal check for the deposit. You can choose to cash it and re-issue if there is no damage. You can also choose to NOT cash it and return the actual check to renter after stay.
2. Run an authorization on their credit card. (No fee) It is not charged to the renter but the funds are being "held". If there is damage you then charge the amount.
3. Run the amount on the credit card (there would be a fee) and then refund if there is no damage.
Thanks for your reply point 2 interests me (Run an authorization on their credit card. It is not charged to the renter but the funds are being "held". If there is damage you then charge the amount.)
How do I go about setting this up - bear in mind this is my only property and I don't have a credit card for the property but I do of course personally
Do you accept credit cards? If so, you can run an "authorization" on their card. Let's say your security deposit is $300. You would run the amount as an authorization NOT a charge. What this does, is it holds the $300 for a specific time (normally 7-14 days) on their credit card. Essentially, the credit card company has allocated that money to you. If there is no damage, then you do nothing, the hold falls off. If there is damage, you would go back to your credit card company and then charge any amount up to the $300.
You would need some kind of contract to specify these details. It doesn't matter if you only have 1 property. I started with one and took credit cards. I use paypros for my merchant account. I've used them for years and are very happy with them!
If you have an iPad or other tablet or smart phone, you can start accepting credit cards. I use Square ...you can pick it up at Target for $10 then they refund you the $10 when you set it up. Thats it no monthly charge, just a charge for the actual charge to the credit card. I too only have one property and this works great because there is no monthly fee.
However, as long as the rental is more than 15 days out, I prefer to take a check (no fees!) and I deposit it, when they check out I just send them a check back. If you do not cash the check, if they mess up your house they can easily put a stop payment on the check and you get nothing. I've been fortunate that in the year we've had the house, rented out over 80% and I've never had to hold back a penny for damages (should have once because we had to drain and refill the hot tub once) Additionally, a check identifies the customer and his home or business which you dont get on a credit card and they could misrepresent on a rental agreement.
We have a simple method that we have used for many years to manage our vacation home. We accept checks only for rent and security payments (personal and bank checks). We deposit the checks into a bank account set up for this purpose. It works as any other basic checking account. Checks are received and deposited to the account - the payment is ours (unlike a credit card where a hold or even a charge can be reversed by the guest). Returning funds requires writing a check and mailing it to the guest. We have deadlines for payment that allow for clearing checks well in advance of a stay.
We have been doing this for many years and it works. Minimal fuss and no fees.
I have never had a guest decide against my home due to my payment method.
If we have a late rental, I require overnight delivery of a bank check.
I'm surprised at the number of owners that eschew such a simple, straightforward system. It's old-fashioned, but it has worked nicely for us.
An unrelated benefit to accepting checks (and completely off topic) is the financial screening that is implicit in the guest being able to pay the rent, without relying on a credit card. My home rents for several thousand dollars a week during the peak season and it's reassuring to know my guests have the resources available for payment. It's a piece of information that contributes to my comfort during the screening process. I feel if there is a problem, there is some security in knowing the rental is not a "pay the balance charged by the month" credit card situation, which might lead to difficulties with the guest if there are any charges to be made to the the security or damage deposit. Perhaps a quirky view . . . .
I agree with what you do. The only difference is we've set up an account at BoA because they are pretty much everywhere and customers all over Texas, NM, Oklahoma and Arizona where we get most of our rentals from, can just walk into the bank and make a cash deposit on a last minute rental. The customers seem to appreciate that plus you can look at your account and verify that it was cash not check.
Sounds interesting and something I might try. Wells Fargo Bank is convenient to most of our guests.Would you kindly answer a few questions?
To what type of account do people make the deposit?
How do guests know the account information to make the deposit?
Does BofA charge you for allowing these deposits?
How do you know the deposit has been made?
Thanks for your help.
My booking process.
1. I email a $400 paypal bill. I explain its a non refundable "hold fee" that will convert to their refundable security deposit. Once this is paid, thier date is held for 10 days.
2. I also email their lease. They have 10 days to return the signed lease, copy of id, and a check- personal, bank, or money order- for 50% of the rent.
3. The other 50% of rent is due no later than 30 days before thier visit- check again.
4. I refund the $400 paypal assuming its left clean and undamaged.
This process works very well, and I never have guests balk. I dont collect security deposits from guests who return. The paypal fees on $400 are about $12, which is worthwhile for a solid booking. I call it a hold fee, for if they dont return the lease and check, Im not chasing them. They forefit it. The burden to keep in touch is on them.
I do a little of both. I take credit cards, and give the renter the option of sending me a check for the Damage Deposit, or for having me put an authorization hold on their credit card for the same anount. Some just provide me with their Debit Card info for the DD, that I can run just like a CC, but it comes out of their checking account.
Last minute renters ( less than 10 days out) must use a credit card.
One thing I find important is to hold all monies in "escrow". The Damage Deposit money goes into my business checking account and it is never touched until the renter has checked out, and all damages, etc. are settled. That way I never have to worry about having funds available - for refunds OR extra cleaning fees etc.
I do the same thing with all money sent as the 50% down payment. Once the due date for cancellation arrives, ( they know they forfeit the down payment if they cancel less than 32 days prior to date of arrival), then I'm comfortable to call it "income".
Works for me and I've never had anyone complain.
For return renters I will ask for a check for the DD, but do not cash it. If all's well I return it to them, uncashed. At least that way I've covered my you-know -what- just in case, and they think they are getting a good deal.
#1: Lets' define terms: I require a Rent Deposit for $300 when someone books well in advance. #2: I require the Rent Balance 60-90 prior to arrival. #3: I require a Security Hold (deposit) 10 days prior to arrival. I use these terms very purposedly in order to make sure my renters are 100% clear. The Security must be in CASH... when I say CASH I mean: Cash, deposited check, or credit card authorization (hold). To receive a check and not cash it is stupid and pointless... If someone breaks your $1000 flat screen TV and then voids the check they gave you or have no funds in their account the check is worthless!! That's while I require the security payments to be made 10 days in advance so if a check bounces I will know and the renters will have time to get me the cash prior to the arrival date.
Hush, with all due respect, I want to point out that I said I hold an uncashed check only for return renters ( those who've stayed at my home more than once in the past several years and have left it in excellent shape).
While I may be 'taking a chance" in those cases, the fact that I have a signed check with the notation of " Damage Deposit for xxx dates", and the Damage Deposit page of my contract with their signature stating that I am in receipt of their check for the Damage Deposit, has, according to my attorney, established a contract for the matter. Anyone can either cancel a check, or contest a CC charge, in today's banking world.
It would be great if I could require 'cash" upon check in for the Damage Deposit, but being 1400 miles away from my VR home prohibits that practice. We all do have to find a way that works best for us.
misdebj: Thanks for your response but I was replying to Tom's inquiry, not you. I have many repeaters and even though we've built up a wonderful rapport I still treat every rental and guest the same way with the same formula at all 4 of my properties... Now, with all due respect... If someone writes a check with insufficent funds in the account or voids a check you are behind the 8 ball and the only way you'll get back your money is through the court system, good luck! That is why all checks should be cashed, period. Anything less is bad business, is risking being bitten in the backside and creates sloppy habits. Regarding credit card authorizations and charges... Yes, someone can call the issuing company and dispute the charges... But if you have everything in writing and an excellent record with your credit card company you will win the "dispute". Additionally, the process of receiving a Security and emailing confirmation of it's receipt and linking that written communication with the emailed Welcome Kit (key code, directions, house info, local area guide) acts as a reminder that the guests must follow the rules or else. During the off-season and non-weekend rentals I'll discount my 2 night rate to $600 but still require a $750 security... When people leave my properties they leave them in great shape.... I rent to everyone from high school prom groups - college kids - families... Quite often the high school prom groups leave the house better than anyone else... The $750 means a lot more to them!! And yes, I agree with you 100%... We all find a way that works best for us... And that's why when a Newbie asks for advice it's good for them to receive many different opinions. All the Best!!