Hello,
I have recently pruchased a Winter rental property and was wondering if anyone had good suggestions for establishing cancellations policies and security deposits. I am trying to determine what the best policy is, such that I am not scaring potential renters away, but at the same time, not exposing myself to significant risk.
I greatly appreciate the help!!
Security deposits and cancellation policies
Welcome to the forum, NYCamps!
Sounds like what you're talking about would be covered by the rental agreement -- and there is a collection of forum users' rental agreements here:
viewtopic.php?t=695&start=0
Our security deposit is 25%, and our initial rental payment is 15%. The initial payment is non-refundable, and the rest is due four weeks in advance, and becomes non-refundable at that time.
However, I believe we're actually on the lenient side -- more typical initial rental payments are higher, and it's also more typical to have full payments be due 8 weeks in advance and for them to become non-refundable at that time. In fact, at the end of this season we may be changing our policies to reflect that.
Sounds like what you're talking about would be covered by the rental agreement -- and there is a collection of forum users' rental agreements here:
viewtopic.php?t=695&start=0
Our security deposit is 25%, and our initial rental payment is 15%. The initial payment is non-refundable, and the rest is due four weeks in advance, and becomes non-refundable at that time.
However, I believe we're actually on the lenient side -- more typical initial rental payments are higher, and it's also more typical to have full payments be due 8 weeks in advance and for them to become non-refundable at that time. In fact, at the end of this season we may be changing our policies to reflect that.
Brooke
Re: Security deposits and cancellation policies
Welcome to the forum, NYCamps!NYCamps wrote:I am trying to determine what the best policy is, such that I am not scaring potential renters away, but at the same time, not exposing myself to significant risk.
For the cancellation policy, I think it is good practice to always spell it out when you are talking about rates and payments.
My cancellation policy, which for me meets your above criteria, is: if you cancel, I will return any money received (minus bank charges) if I can find another booking for your dates.
If you ask for the final payment to be made 8 weeks before the rental period, that means that in the worst-case scenario you have 8 weeks to find a replacement.
That serves me well and doesn't scare potential renters away.
Paolo
Lay My Hat
Lay My Hat
Hello New Best Friend,
Finally a fellow New Yorker! I think I'm the only other person on the forum renting a place in NY (who has raised their hand anyway). May I ask where your rental home is located?
Regarding your questions, here's what we do:-
CANCELLATION POLICY:
Advance rent paid is refundable, less a $50.00 processing charge, if the premises are re-rented for the same period at the same rate or higher rate, otherwise the difference is forfeit.
(The 50 bucks is to cover the cost of extra advertising to fill a last minute cancellation)
PAYMENT TERMS:
We ask for 50% rent to secure the house, the balance payable 45 days in advance of arrival together with the security deposit. Security is normally $500 (I would like more). If a booking is made for the next financial year, then for tax reasons, I take only a $500 deposit now and the rest is payable after Jan 1st.
One small thing to watch - deposit checks. Traditionally around here, Realtors who handle rentals do not bank the security checks, rather they return the original checks to Tenants after they check out and are not in any hurry to do it. Our policy is different. We bank all checks and return funds very fast, but because the legacy is slightly different, we do make a point of explaining this to visitors in advance, then there are no misunderstandings.
One big thing to watch - NY sales tax. We walk a very fine line. PM me if you would like to discuss this aspect further or post in the US thread.
Wishing you lots of luck with your new venture.
Finally a fellow New Yorker! I think I'm the only other person on the forum renting a place in NY (who has raised their hand anyway). May I ask where your rental home is located?
Regarding your questions, here's what we do:-
CANCELLATION POLICY:
Advance rent paid is refundable, less a $50.00 processing charge, if the premises are re-rented for the same period at the same rate or higher rate, otherwise the difference is forfeit.
(The 50 bucks is to cover the cost of extra advertising to fill a last minute cancellation)
PAYMENT TERMS:
We ask for 50% rent to secure the house, the balance payable 45 days in advance of arrival together with the security deposit. Security is normally $500 (I would like more). If a booking is made for the next financial year, then for tax reasons, I take only a $500 deposit now and the rest is payable after Jan 1st.
One small thing to watch - deposit checks. Traditionally around here, Realtors who handle rentals do not bank the security checks, rather they return the original checks to Tenants after they check out and are not in any hurry to do it. Our policy is different. We bank all checks and return funds very fast, but because the legacy is slightly different, we do make a point of explaining this to visitors in advance, then there are no misunderstandings.
One big thing to watch - NY sales tax. We walk a very fine line. PM me if you would like to discuss this aspect further or post in the US thread.
Wishing you lots of luck with your new venture.
Waves from America
"My cancellation policy is: if you cancel, I will return any money received (minus bank charges) if I can find another booking for your dates. "
I would add " & less administration costs of xxx".
"...the final payment to be made 8 weeks before the rental period...... doesn't scare potential renters away."
Agreed!
I would add " & less administration costs of xxx".
"...the final payment to be made 8 weeks before the rental period...... doesn't scare potential renters away."
Agreed!
Best,
Alexia.
Alexia.