The 7-day rule is a general rule of thumb for vacation rental owners trying to keep the deductible losses to zero for their taxes. If a property is rented for an average of 7 days or less then owners will be eligible for tax-deductible losses.
A portion of the total rental amount which the guest pays in advance of their stay.
An extra amount guests pay an owner or property complex in order to access certain amenities, such as tennis courts, golf, beach chairs, etc.
American Society of Home Inspectors (ASHI)
ASHI, the American Society of Home Inspectors, sets and enforces high standards of practice and a code of ethics for its members to promote excellence and professionalism in the industry.
Defines the terms and conditions of payment schedules, cancellations and damage deposits.
A breakage deposit, also known as a security or damage deposit, is a sum of money paid in advance by guests to cover potential damages or extra cleaning costs during their stay at a vacation rental or hotel.
A signed and sealed document between you and a selling agent that notes that the agent cannot show anyone else a specific property until you confirm that you are no longer interested in purchasing it.
Typically a sum of money the guest must pay if they cancel a reservation after the cancellation deadline has passed.
The set of rules which dictate what happens if a guest cancels their reservation within a certain notice period.
A commission that a third-party distributor charges a property owner for listing their vacation rental on their website.
A one-time fee hosts charge guests to cover the cost of cleaning their property after guest departure.
Choosing a property that meets most of your vacation rental goals, but may not be exactly what you wanted.
Any additional fee that is unique to a property. For example, most properties will have a cleaning fee, but only those with hot tubs can charge a “hot tub cleaning fee”.
Sometimes called a breakage deposit or security deposit. This is a refundable sum of money (typically around $200 or 10% of the rental rate) which a property owner collects from their guests in addition to the total booking amount. The deposit guarantees that guests return the property in the same condition they found it. In case of damages, the property owner will make appropriate deductions from the damage deposit.
Damage protection insurance
A product that the traveler purchases, usually when paying for their booking. This one-off insurance cost is around $50 to $100 per stay and is bought instead of leaving a damage deposit.
Damage waiver fee
A damage waiver fee is a prepaid, non-refundable fee included in a rental home’s total price that covers accidental damages to your property during the guests’ stay.
A written and filed right to have complete access to a certain property. For example, if you purchase property near a lake but not on the shorefront, your house might have deeded access through the neighboring land to get to the lake.
The act of returning the amount that renters have paid for the damage deposit (provided everything has been left in the same condition).
Partial payment guest makes at the time of booking in order to secure a reservation, usually a percentage of the total amount.
The lawful expulsion of an occupant from any property.
A predetermined plan that takes into account everybody’s interest in a joint ownership arrangement. An exit strategy gives a business owner a way to reduce or liquidate their stake in a business and, if it’s successful, make a substantial profit.
Fair Housing Act
The 1968 Fair Housing Act is a federal act in the United States intended to protect the buyer or renter of a dwelling from seller or landlord discrimination based on race, color, religion, sex, handicap, familial status or national origin.
Specific insurance coverage against property loss from flooding. Flood insurance is a requirement in federally designated flood areas.
Additional guest charges beyond the initial price. For example, a guest fee can refer to a service fee, cleaning fee, pet fee or extra person fees.
A form of property insurance that covers losses and damages to an individual’s house and to assets in the home. Homeowners insurance also provides liability coverage against accidents in the home or on the property.
Set by the host to cover anything that’s important for guests to know during their stay at a property. They are an ideal opportunity to clearly state what you expect of guests, what they can and can’t do and what penalties will occur if the house rules are broken.
A document which helps guests keep track of their expenses and can be also used as proof of payment.
Depending on the location, certain documents are required before you can legally rent out space within your home to travelers.
The Minimum Length of Stay is a policy that is normally used during a period of high demand after a period of low demand.
Typically lower rates that have special booking conditions. For example, guests will still have to pay the full price if they cancel, make changes or don’t show up. In other words, they will not receive a refund in the event of cancellation.
Occupancy-based pricing sets multiple price points for the same property or unit depending on how many people stay there. Typically, the more guests you host, the higher your daily rate is.
Payment Card Industry compliance is a set of standards and guidelines for companies to manage and secure credit card related personal data during and after financial transactions. PCI compliance is required by all card brands.
Per Person Sharing
Per person sharing is the price each guest pays when sharing a room. PPS ensures that the space is not taken advantage of or overcrowded with more guests than is approved by the owner.
Pet fee and deposit
A sum of money beyond the total rental rate which covers the stay of any pet and costs associated with it (i.e. cleaning). Pet fees are non-refundable, but pet deposits should be refunded if no damage has incurred during the stay.
Cybercrime in which a target is contacted by email, telephone, or text message by someone posing as a legitimate institution to lure individuals into providing sensitive data such as personally identifiable information, banking and credit card details, and password.
Pool heating fee
An extra service charge vacation rental owners and property managers can charge to guests who wish to heat the property pool or hot tub.
Property management agreement
A legally binding document between a property manager and property owner which clarifies in writing any arrangements that have been made between the two parties, including house rules and repercussions if broken.
A legal agreement between a property and an OTA, providing the same rates for the same room on all the distribution channels – including the property website.
A reservation or booking that qualifies for a refund under specific circumstances.
Location-specific restrictions that are applicable to short-term rentals with respect to the total amount of days they rent out each year and other requirements.
Also known as “Preparation Time Before Arrival (PTBA)”. The minimum number of days in advance a booking has to be made, e.g minimum of two days before arrival. This allows property managers to gain better control of last-minute bookings and gives them time to prepare for the guest’s arrival.
A legally binding document between homeowner and guest which clarifies in writing any arrangements that have been made between the two parties, including house rules and repercussions if broken.
An amount of money (usually equivalent to one night’s stay) collected at the time of booking which validates the rental contract. The purpose of the advance deposit is to guarantee a reservation, and the full amount is applied to the guest’s bill upon check-out.
Most states in the US require people who rent out their vacation homes to charge and collect state sales or lodging taxes on the income they earn from these short-term rentals. These taxes are collected by the state, county and/or city, and like all sales taxes, they are paid by the guest, not the host.
A fraudulent scheme to gain money. As the industry grows, scams are becoming more and more popular. Warning signs to look out for are: a lack of basic language skills, strange email addresses, unwillingness to pay via your preferred method, last-minute or same-day bookings, and uncertainty or too much flexibility on travel dates.
See damage deposit.
Significantly Not As Described – a term used in disputes for properties that do not look anything like they appeared online.
The arrangement whereby several joint owners have the right to use a property as a holiday home under a time-sharing scheme. Most often this is limited to one or two weeks per year.
See guest fee.
Similar to a welcome app, but a physical book for the guests to hold. In a welcome book, hosts can compile all important information into one place, helping to reduce questions from guests while reinforcing their impression of you as an organized owner.
Introduces guests to your property, even when you can’t be there in person. The welcome letter has one main purpose: to give guests a personal, warm reception to your home.