Are you considering renting out your property over the holidays? Your property is probably one of your most valuable assets, so you’ll want to protect it. After all, you’re allowing strangers to stay in it and use it. Here are our top 3 recommended ways to protect you and your holiday rental property:
1. Use a Holiday Rental Agreement
A Holiday Rental Agreement is the most important way to protect yourself. It’s an agreement with your guests that sets out your terms and clarifies the rules for renting and looking after your property.
The agreement should be clearly worded and cover items like: rental dates, noise, damage, pets, when to vacate, inclusions like cleaning service, etc. It should also cover your payment terms, returning of security deposits and charges to replace lost keys, swipe cards, remote controls, etc. Your guests should sign the agreement and then return it by mail or a scanned copy attached to an email.
For overseas guests, request a photocopy of their passport or other identification document. This is protection for you that they are who they say they are, it is confirmation of their signature on your contract and it may act as a deterrent against any breach of contract or damage to your property.
2. Have the ‘right’ property insurance
Do you know if you have the right type of property insurance? Holiday rental property insurance is not the same as home and contents insurance or landlord insurance. And if you try and claim for damage by your holiday rental guests under ‘normal’ property insurance, your insurance company will probably reject your claim!
You need to have specific holiday rental insurance to cover you for damage to your property while rented to a holiday rental guest. There are many insurers who offer home and contents or landlord insurance but there are only a few insurers who offer short-term rental or holiday rental insurance. So be careful and check your insurance policy.
And most insurance policies require you to have a Holiday Rental Agreement with your guests too. So don’t cut corners, be professional and use a Holiday Rental Agreement.
3. Take your security deposit in cash
You need to take a security deposit when renting out your holiday property. But deposits made by credit card or PayPal can easily be voided – and usually just after your guest vacates your property. So make sure you take the security deposit in cash or it’s transferred directly to your bank account.
The security deposit amount is up to you but it should, at minimum, cover your insurance deductible. That way, if you need to make an insurance claim you’re not out of pocket.
Insurance companies generally deduct the security deposit from any policy claim and require evidence of this. So make sure your Holiday Rental Agreement clearly states the amount of the security deposit, the method of payment and terms for its return.
If you’re a holiday rental property owner, don’t forget to check out our helpful guide: How to Manage a Holiday Rental Property