The 5 best ways to offset your short-term rental security costs

The 5 best ways to offset your short-term rental security costs, Autohost

Reports of COVID-19 parties and an increase in fraudulent bookings have shown property managers just how integral security is to the short-term rental industry. Without adequate security measures, property managers risk damaging their reputation and paying out revenue to cover—what should be—avoidable costs.

As a business, you have to implement the right security solutions to protect your guests, neighbors and community. But unfortunately, security can come with a hefty price tag, especially when you add up the costs of necessary security solutions like insurance, guest screening and property monitoring tech.

That’s why we’ve outlined the five best ways to offset the costs of your security solutions. Read on to find out more.

1. Include costs in the guest’s fees

Avoid including the security costs in your listing’s nightly rates. This will inflate your prices, making your properties appear more expensive than your competitors. Instead, include the security costs in your booking fee. A booking fee is an extra charge added to the overall price of the stay at the time of booking. Booking fees are used in the hospitality industry to cover the cost of your operations.

The extra fee is easy to apply if the guest makes the reservation through your direct booking site. If they’re booking through an online travel agency (OTA), there may be some extra caveats to adding a booking fee. For instance, on Airbnb you can add an additional fee to the stay only if you manage six or more properties. If you choose to add a booking fee, we suggest keeping it between $5 to $10 per stay. This should cover the costs of your security measures without scaring off guests.

Another option is to lump your security costs in with your cleaning fee, again upping it by $5 to $10. If you decide to do this, be prepared to justify the price increase to guests, especially if it’s more expensive than properties of the same size. Consider adding a note in the fine print of your listing or rental agreement explaining how your fees are set up.

2. Offer damage waivers to low-risk guests

In lieu of a security deposit, you can offer a non-refundable damage waiver as a way to cover the costs of any incidentals during the stay. Depending on the property, you can charge anywhere from $25 to $50. Assuming you’re dealing with good guests and there aren’t any incidents, you should be able to pocket this money as ancillary revenue and direct it towards your security costs.

But be sure to only offer damage waivers to low-risk guests. If a guest throws a party or damages your property, it won’t be enough to cover the costs of repairs and extra cleaning. If you’re worried about a guest’s behavior, keep them in check by charging a larger security deposit.

3. Add a fee explicitly for security

Rather than lumping extra costs into your booking or cleaning fees, charge the guest an explicit security fee at the time of booking. Most major OTAs, including Airbnb and, will allow you to add additional charges, but it may come with certain requirements, such as a minimum number of properties managed.

When determining how much you should charge for the security fee, base it off of what security solutions you use. Security fees can range between $5 to $25.

If the guest questions the security fee, explain to them that it covers the cost of protecting your property, your neighbors and your community from malicious activity. You can even add that the fee goes towards detering incidents that could threaten the safety and well-being of the guest.

4. Charge the property owner a security fee

Rather than charging the guest, you can include the security fee in your contract with the property owner as part of your managerial services. A good way to do this—so that you don’t overtax the owner—is to create multiple tiers of security service with each tier offering a different level of security. The tiers can range from basic security services, such as ID verification, to advanced security services, such as background checks and insurance. The price of each tier will increase as the security solutions become more advanced. The multi-tier system gives you the ability to generate more revenue from clients, while giving owners the choice in how protected they want their property to be.

When pitching the tiers, it’s worth reminding the owner of the added benefits of proper security. By putting in place measures like guest screening, insurance and property monitoring tech, you’re protecting the owner’s property against parties, property damage and criminal activity. All incidents that could leave the owner’s property liable to the cost of repairs—often ranging in the thousands—and missed bookings while the repairs are being completed. Integrating the right security solutions can prevent costly incidents, attract good guests and increase occupancy through positive reviews.

5. Pay for security credits in bulk

Your need for security is only going to grow as you scale your business, so why not think long-term about the costs. When investing in security solutions, pay for a year or two’s worth of credits rather than in monthly installments. By paying in bulk, you can negotiate lower costs with your providers, reducing your overall costs. There can also be tax benefits if you treat the bulk purchase as a capital expense rather than an operational expense.

Find the right security solution for your business

Security can be expensive, we get it. But saving on security costs is not worth the thousands of dollars in repairs that you could be paying if you’re not properly protected. And by leaving your property vulnerable to bad guests and criminal activity, you can negatively impact the entire short-term rental industry, causing increased regulations or out-right bans of short-term rentals. As an industry, we need to work together to prevent these kinds of incidents. That’s why opting out of security is not an option. Instead, get creative with the ways you offset costs.

For more tips on how to offset your security costs, reach out to us.



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