Expert tips for reducing property risk at your short-term rental
Summer vacation season has well and truly arrived, and bookings for short-term rentals are on the rise. My expectation is that short-term rentals will be the preferred accommodation option in the upcoming months as people look for the safety and comfort of a home away from home. To capitalise on this demand after such a tough year, it’s more important than ever that property managers and owners protect themselves from unnecessary risk and, ultimately, cost.
So, how can short-term rental property owners and managers prepare for a financially strong yet safe summer? Here, I explore why guest screening and tailored insurance are fast becoming integral parts of property management, while sharing my tips on reducing risk at your property.
Be prepared with specialist, tailored insurance
The first step and necessary precaution to protect your property is to consider your insurance coverage. Navigating the complex world of specialist insurance can be a pain point for many property owners and managers. After all, who likes to dwell on the worst case scenario? But when it comes to insuring your short-term rental property, it’s essential that you have the right tailored coverage in place for peace of mind in the event that something goes wrong.
A robust damage liability insurance product for home, contents and bodily injury will remove any friction between owner, manager and guest, and ultimately ensure a more profitable and happy stay for all.
Consider screening guests
Having a comprehensive insurance solution organised is key to reducing risk at your short-term rental. But a further step towards avoiding property damage is managing misconduct by encouraging respectful guests to book your property.
The secret to this is unbiased, technology-backed guest screening – one of the best ways to prevent incidents occurring at your property. The main barrier for homeowners to rent out their property is anxiety over letting an internet stranger into their property, which is a very valid concern. Screening prevents disrespectful guests from ever getting through the door, while also preventing the chance of damage, fraud, parties and noise complaints.
Short-term rental property managers and owners already have many of the tools and instincts required to predict high-risk booking behaviour. For example, last-minute bookings, especially from locals, should be treated with caution. Also, ill-intentioned guests will often inadvertently reveal their plan through an escalating number of little requests to make the house just right for them with no regard for house rules.
To support your instinct, modern data science tools, such as those we use at Safely.com, can help identify high-risk booking requests. Property managers and owners can integrate comprehensive guest screening into their property management processes to ease owners' concerns over strangers sleeping in their beds - turning them into trusted guests and greatly mitigating risk to the short-term rental.
It’s important to note here that the quest for a respectful guest begins at the start of the booking process with the listing. Be intentional about how you describe your property. Do you want to appeal to a large party or a family? Be realistic about the amenities you offer and the image you want to project. Do you want to set a specific criteria guests must fulfil prior to booking? On Booking.com, for example, you can make it a booking requirement that guests must provide a verified phone number or their address.
Property managers and owners who take a proactive approach to managing guest misconduct by considering these things at the start of the process will be a step closer to hosting respectful guests in their properties, protecting their assets and ensuring good owner relations.
What about when things do go wrong?
Insurance and guest screening can be a complex field to navigate. Here are my recommendations for what you should have in place to protect your short-term rental property against accidental damage and guest misconduct:
- Commercial insurance that covers damage to the home’s structure, its contents and bodily injury (covering accidents and non-accidents). I recommend US$1,000,000 to my clients.
- Travel protection and cancellation insurance.
- Guest screening to identify disrespectful guests and prevent them from staying at your property.
Finally, remember to check the fine print, especially the exclusions, to make sure you’re aware of all the instances that may negate your policy.
- A robust damage liability insurance product for home, contents and bodily injury can help protect property managers and owners against unnecessary risk and cost
- Unbiased, technology-backed guest screening can help prevent the likes of damage, parties and noise complaints
- The quest for a respectful guest begins at the start of the booking process, with your listing. Be intentional about how you describe your property and the traveller type you want to attract