You matter to us: the success of our business is predicated on your satisfaction with our services, processes, and results.
The goal of this article is to ensure you are aware of the importance of having Insurance that specifically covers Short Term Rental, that you are engaging us as a Holiday Letting Agency, not as an insurance provider and that the reality of Holiday Letting is that there will be unrecoverable expenses that you should plan for, and not be surprised by.
When we have a situation that a guest has done the wrong thing, or an accident has occurred, our first priority is to protect your asset and revenue. In most cases, your insurance will not be involved because we are able to determine the responsible party and successfully claim funds from guests. However, it is important to understand that some expenses may end up being paid by yourself (see
Claiming Funds from Guests for more information).
In the rare situation where you do have expenses, insurance covers you for large value claims however there may be smaller value claims where going through insurance is not the best approach (think: a broken taillight on your car is not worth making an insurance claim).
When we estimate your rental returns, we provide you with a Gross Rental estimate as a dollar figure. We also provide a % net return which highlights expected expenses associated with Short Term Rental. One of the expenses factored into these figures, are out of pocket costs for small repairs/missing items, etc, examples of which are referenced below. See
Expected Running Costs.
Example One
Broken furniture (e.g. chair or bed)
Scenario: Tom stays at your home for 2 nights and during his stay contacts us to report that one of his group lay on a bed and the frame collapsed.
What we don’t know is how this has occurred (other than what we’re told). For example, it could have been 5 kids jumping on the bed, it could have a large person simply sitting on the bed, or it could also have been an accumulation of usage and wear & tear. We send a handyman out who reports that they are not able to determine if the damage was caused maliciously.
Result: In this case, we would be unlikely to be successful in seeking funds from the guest (unless they volunteered it).
Example Two
Missing items (remotes, BBQ covers, minor linen items)
Scenario: You inform us that you’ve come to stay at your home and can’t find a remote control. We contact the most recent guest who states they didn’t use the TV in question. Subsequent searching by the cleaning doesn’t turn up the remote, and they’re not able to pinpoint exactly when the remote went missing.
Result: In this case, we would be unable to seek funds from any guests.
Note: Small items (like a remote) are good examples of things that a cleaner may not notice when doing a post- stay clean and inspection.
Example Three
Damaged items (a TV screen, appliances)
Scenario: A guest checks into your home and contacts us during their stay to advise that the TV screen is damaged, and therefore not displaying a clear image. Cleaners do not turn on and off appliances (such as TVs, ovens, speakers, etc) as part of their standard check.
As with other examples, we follow up with prior guests and are able to ascertain that the damage has occurred in one of the previous three bookings but are unable to ascertain exactly which group of guests is responsible.
Result: In this case, we would be unable to seek funds from any guests as we cannot determine accountability with 100% confidence.'
"Why can't you guarantee ALL of these are picked up?"
Setting up processes and checks to reduce (but not completely eliminate) these expenses, is a question of maths. They occur
infrequently, and making the post-stay checks significantly more
thorough would add significant cost (for you, the owner) in order to
meaningfully reduce these unpredictable (and often hard to notice)
expenses.
Other than the cost for people's time, this would also create a range of challenges related to areas of expert knowledge, and scope of responsibilities. In short – even if this was possible, it would cost much more for you to reduce these occasional expenses than accept that they are part of Holiday Letting.
We do not want to overstate the likelihood of some of these situations however it is in the best interests of all parties that there is absolute clarity around potentially unrecoverable expenses. It is for that reason, that we factor these small occasional incidences into our estimates for rental returns for your home.