If you have rented a cottage vacation rental in the past,
you have probably been asked to pay a security deposit. I have seen these deposits range anywhere
between $150, to $2,000 depending on the value of the cottage, the length of
your stay, the number of people in your group, pets, etc. This deposit is kept by the owner until the
end of your stay, at which time it is returned to you provided there are no
damages to the property or contents, outside of normal wear and tear.
There has been a movement lately from the cottage owner
community, to forego taking security deposits.
Only 2 percent of the time is there a need for a cottage owner to draw funds
from a security deposit anyway. For
cottage owners, there is a lot of work involved in collecting and returning deposits,
and there are very few times when a deposit is even used to cover any
damages. Of those few times, the
amounts are fairly small and usually are for damages that the guests fully
admit to causing and are willing to pay.
For the cottage owner, it is easier for the accounting on their end if
they don’t have to worry about collecting and returning the deposit. It is not that the owners are willing to give
up that added protection. There are two different
ways that cottage owners can still ensure the same protection against damage,
without having to directly charge the guests a refundable security deposit.
- Guests are all charged a small additional fee
hidden in the rental charge. Instead of
that cottage costing you $1,000 per stay, it is now going to cost you
$1,025. There is no additional security
deposit to be paid up front and there is nothing that will be returned after
your stay. You are simply paying $1,025
to rent the cottage with no security deposit.
Nice right?.... The owner then
takes these numerous extra $25 payments and funds a private damages fund. This fund is then used to cover any damages
up to a certain amount. (There would
still be wording in the contract that they could seek compensation for larger
ticket items), but for smaller damages they would draw from this private fund.
- The second model is to force guests to purchase a separate insurance. This is basically the same as the point above, however it is a more formalized cottage guest insurance, usually managed and run by a third party. Again, this is an additional cost to you the guest, which would have you paying more to rent the cottage overall.
So what does this mean to you the cottage rental guest? If you are the type of guest who loves to
come to the cottage and plan to take care of the cottage like it was your own,
it means you are paying an extra fee for damages that someone else will cause
in the future! Instead of paying $1,000
for a rental charge plus $400 which is returned to you in full after your stay,
you are now paying $1,025 or $1,050 for a loss of $50.
In the first scenario above, let’s consider a cottage that
rents 50 times in a year and charges a hidden $50 per rental to cover
damages. The damages fund now has a
total of $2,500 for the year. What
happens if the owner doesn’t have that much in damages over the year? You guessed it – the owner gets to pocket
that money
So if I’m a guest for your rental cottage I say charge me
the deposit! I know I will take care of
the place and I don’t want to pay more than I need to, paying for someone else’s
damages!
What do you think?
Would you rather pay a slightly higher rental charge? Or less in rental fee but with an additional
security deposit which is refunded to you after your stay? I’d love to hear comments and thoughts from those
of you who have rented cottages!
Dean Curtis
Serenity
Vacation Rentals
