Deposit And Balances

The amount of administration and accountancy involved in your business will be dependent on whether you employ the services of an agent or decide to do the work yourself.

If you employ an agent, they will be responsible for taking your bookings. A deposit will usually be requested at the time of the booking and this can be anything from, say, £50 per week to a percentage of the overall cost of the rental. Most holiday let agencies request the balance of the monies due eight to ten weeks before the holiday is to be taken. If you decide not to employ the services of an agent, then the taking of deposits and balances will lie solely with you. This may seem like an easy quest, but you should bear in mind that some guests may fail to pay the balance on time, or cancel at the last minute, and you should have a strategy in place for dealing with these situations.

When deciding on the amount of deposit to charge, bear in mind the following:

If you employ an agent, you should receive that deposit for a booking when your next payment is due from them. For example, an agent who pays their client monthly and receives a deposit for a booking in June should in theory be paying their client this deposit in July. This will of course depend on the date the booking was taken and the date the monthly statements are prepared. Large agencies often charge low or reduced deposits.

This is because they know that people are encouraged to book when a small deposit is needed and in the event of a cancellation, they usually have the means of re-letting the property at short notice. In the event of a booking being cancelled whereby a reduced deposit has been charged, the customer will be expected to pay the remainder of the deposit despite having cancelled their holiday.

The final monies due should be requested before the customer takes their holiday. Never allow guests to holiday in your property before paying the rental. Although this may seem like common sense, some people can be too trusting and allow guests to sample the property first. This is not to say that your guests are going to be disappointed and therefore refuse to pay, as this is most definitely not what you should be aiming for. If you follow the guidelines set out in this book you should be hoping for repeat bookings, not unhappy guests.

However, many people are unwilling to pay for something after they have had it and even if they do pay, you may have to chase your money up and still end up waiting many months for the cheque. All agencies will set a deadline for the balance of the monies to be paid and this can be anything from one to two months in advance. If a booking is taken less than four weeks before the start of the holiday, the agency will request the full amount when taking the booking, and this may be something you would like to consider if you are marketing the property yourself.

If you decide to market your property yourself, bear in mind the length of time it may take you to:

Of course, we can all be forgetful. If a guest who has booked their holiday and paid the deposit fails to deliver the balance of the monies on time, do not automatically assume they are untrustworthy and immediately offer the property for re-letting. A quick telephone call to remind the guest that the payment is due may be all that is needed. Inform them that you will allow them a further week to post the cheque, after which they stand to lose the deposit they have already paid and you will offer the property for re-letting. This is usually all it takes to get the balance owed to you. Of course, the number of weeks you request the balance of the rental prior to the holiday will need to take into account any further time you allow guests to pay up.

Agencies will have their own strategies for collecting the balance of the monies due. Often late payments can incorporate additional fees or the property would have to be re-booked and the initial deposit lost. An agency will of course furnish potential guests with a contract giving all the details for deposits and balances.

If you employ an agent to take care of the bookings for you, it will be impossible for guests to turn up at your property having not paid the full amount of money due as the agent will not give the property’s address and directions until they are in receipt of the full rental funds. Important information about the property such as its full address, direction, housekeeper details where to obtain the key from and if used, the code for the key safe, will only be sent out once the customer has paid the rental fees in full.

If how ever you are marketing the property yourself you may be asked by a potential guest for the address of the property. Avoid giving the full address at all costs and never give details of where to obtain the keys until you have received a firm booking and all the rental fees. Of course, it is acceptable to tell potential customers the vicinity of the property but do not give the precise location.

Remember, although the vast majority of the enquiries you receive will be from genuine holidaymakers, you may also fall victim to opportunists looking for empty properties. Never make things easy for them by giving away too much information early on. Of course, even after receiving the rental in full you cannot guarantee that the people holidaying in your property are honest people who will look after your possessions. If you employ a housekeeper, make sure they keep an eye on the property, without interfering or making a nuisance of themselves. Some property owners instruct their housekeepers to make a note of the car’s registration number and to check the property immediately after guests have vacated in order to check for damage and breakages.

Some guests may well abuse your accommodation, but in my experience this is far more likely to happen in a longterm let than in a holiday let. You may well command a rental fee in excess of £400 per week in the summer, even for a small property, and it is probably true to say that guests paying this kind of money usually treat their accommodation with respect, though obviously this is not always the case. Apart from the odd spill, dirty footprints, dog hairs and dirty ovens, on the whole my own rental property has been treated well.

You must learn to accept that accidents can and will happen. Unless you feel that your property has been badly damaged or wilfully abused, you must take any accidental damage in your stride as this is part and parcel of what should be accepted in a rental property. It is important when letting your property to see it as a business and not as your home. Although it is vital that your property is welcoming and comfortable, avoid furnishing your accommodation with family heirlooms and very expensive furniture, unless of course your rental more than covers any damage that may occur.

It is worth bearing in mind that the location of your property may also be a factor that contributes to the type of holidaymakers you will attract. For example, many landlords consider large groups of teenage boys to be undesirable guests due to their tendency to want to throw parties and consume alcohol. It is probably true to say that groups of teenagers are more likely to book a holiday in a lively resort where entertainment is on hand. If your holiday home is in the remote highlands of Scotland, this is probably a problem that you will never encounter.

You may prefer to rent your property to couples and families, although this is not something that will be easy to monitor. It may be worth considering how you will deal with an enquiry from a teenager, what questions you will ask and whether you will allow them to book. How, in fact, will you be able to tell the age of prospective holiday makers from their voice on the telephone? You could consider charging a bond, which you will refund should the property be kept in good condition, but of course you risk losing customers if you choose this method.