Skip to content

Security deposit

A refundable amount of money that a property owner collects from their guests in addition to the total rental amount at the time of booking. The deposit is to cover any guest damages to the property. The deposit is returned at the completion of a visit if the property in the same condition they found it. Also referred to as a damage or breakage deposit.

Security deposits are a common requirement when renting an Airbnb or VRBO property. Security deposits help protect the rental owner against potential damages, such as accidental destruction of porch furniture and walls, theft, and malicious damage to interior decor.

What is a Security or Damage Deposit?

A security deposit is a sum of money that is typically paid upfront when renting a vacation home. This deposit is intended to cover any damages that may occur during the rental period. The amount of the deposit varies depending on the rental property and the length of your stay, but it is typically equivalent to one night’s rent. In some cases, the security deposit may be used to cover the cost of cleaning if the rental unit is left in an excessively dirty condition.

If a guest damages the property or if any items are missing upon check-out, the property owner may withhold part or all of your security deposit. Therefore, it is important for guests to take good care of the rental property and to leave it in the same condition as when they arrived. As part of the house welcome book, you might want to ask guests to note any existing damage to ensure they are not defending a previous guest’s issue.

What are the Different Kinds of Deposits?

Most people are familiar with the concept of a security deposit but did you know that there are different types of deposits that may be required when renting a vacation home? Here is a breakdown of the different types of deposits and what they mean:

  • Security Deposit: This is the most common type of deposit and is intended to cover damages to the property beyond normal wear and tear. The amount of the security deposit will vary depending on the value of the property.
  • Damage Deposit: A damage deposit is similar to a security deposit, but is typically only required for high-value properties. The amount of the damage deposit will vary depending on the value of the property but is typically equal to one week’s rent.
  • Pet Deposit: Some rental properties may require a pet deposit if you bring a pet on vacation.

When is the Security (or Damage) Deposit Refunded?

The security deposit is refunded to the guest after the property has been inspected for any damages. The inspection usually takes place within 24 hours of the guest’s departure. If no damages are found, then the full security deposit is refunded. If damages are found, then the cost of the damages will be deducted from the security deposit and the balance will be refunded to the guest.

Pros and Cons of Having A Security or Damage Deposit

There are both pros and cons to having a security or damage deposit for your vacation rental. On one hand, it gives you peace of mind knowing that you will be compensated if any damage occurs during your guests’ stay. On the other hand, some guests may feel put off by having to pay an extra fee on top of their rental rate. Ultimately, it is up to you as the owner or manager to decide whether or not a security or damage deposit is right for your vacation rental. Here are some things to consider:


  • A security or damage deposit provides financial protection in case of damages.
  • It deters guests from causing any intentional damage to your property.
  • If damages do occur, the deposit can help cover the cost of repairs.


  • Some guests may be discouraged from renting your property if they have to pay a security or damage deposit.
  • There is always the potential for disputes over damages, which can be time-consuming and costly to resolve.
  • You may have difficulty collecting a deposit from guests who cancel their reservation at the last minute.

Administering the Security or Damage Deposit

For many vacation rental property owners, administering the security or damage deposit is a challenging aspect of the business. In most cases, the deposit is refundable to the tenant if there is no damage to the property during their stay. However, if there is damage, the landlord may use the deposit to cover the cost of repairs.

There are a few different ways that landlords can administer security or damage deposits. The most common method is to simply hold onto the deposit until after the tenant has vacated the property. Once the property has been inspected and any damages have been noted, the landlord can then determine if any of the deposit needs to be used to pay for repairs.

Another way that some landlords choose to handle security or damage deposits is to charge a non-refundable fee upfront. This fee is usually much smaller than the actual deposit itself, but it does not give the tenant any protection against damages. This option is often used by landlords renting out properties in high demand and can easily be re-rented if there is damage.

Finally, some landlords choose to use a third-party company to hold and manage security or damage deposits. These companies will typically charge a small percentage


There you have it! Now you know everything there is to know about security and damage deposits for vacation rentals. Be sure to keep these things in mind when hosting a short-term rental, so that you can avoid unpleasant surprises.