The Property Manager’s Guide to Wear & Tear for Vacation Rentals
As a host or property manager, you know vacation rental wear and tear comes with the territory. While you may set a portion of your revenue aside to pay for small replacements and repairs here and there, where do you draw the line between expected wear and serious damage?
You can’t charge guests or make a claim for every small dent or scratch, but it’s important to know what constitutes wear and tear and what is considered serious damage to protect yourself and your property.
This guide will teach you what you need to know about vacation rental wear and tear so you can try and minimize it, plus know how to react when serious damage occurs.
Protect your business from costly damages with Safely’s short-term rental insurance.
What is recognized as wear and tear damage?
Wear and tear is the damage that occurs naturally as a result of the use of a property and is one of the most common problems for hosts. This can include things like small dents on hardwood floors, snags on a carpet, and minor stains on a couch. Take a look at how to determine whether something is typical wear and tear or more serious damage.
Measure the extent of the damage
When you notice that something is not as it should be at your short-term rental property, the first thing you want to do is investigate the extent of the damage.
Determine whether the damage is small enough to pass unnoticed by most guests or if it’s something that could hinder future guests’ experiences at your vacation home.
Calculate the cost of the damage
Typically, wear and tear damage is less costly to repair, or it doesn’t have to be repaired at all: A worn-out pot here, a scuff on the counter there. However, if the damage you encounter was caused by a single incident, it may go beyond typical wear and tear. This could be something you take up with your short-term rental insurance company.
Analyze the cause of the damage
If you can’t pinpoint one concrete cause of the damage, chances are it’s considered normal wear and tear. However, if the damage is very noticeable and didn’t exist before your last guest’s stay, they may be at fault and could be responsible for reimbursing you. Alternatively, a vacation rental insurance policy may be able to cover it without you having to contact the guest at all.
How often should you inspect a vacation rental?
Aside from the basic walkthrough that you or your cleaning crew does after every guest’s stay, how often you should inspect a vacation rental depends on a number of factors. The biggest factor is the number of guests you have rotating through your property.
If you have a busy season, you may want to inspect your property for wear and tear once a month or even once every few weeks while you have a high influx and turnover of guests. But during the off-season, you could space out wear and tear inspections to every few months.
Also take into account the condition of your property. Do you live in an area with extreme weather? If so, you’ll want to do more frequent inspections. How long ago was the property built? A house that was built 100 years ago should be inspected more frequently than a property that is just a few years old.
At the end of the day, it’s up to you to determine how frequently your vacation rental property should be inspected for wear and tear, but it’s always better to err on the side of caution.
|Pro tip: When you inspect your property, it’s a good idea to take pictures so you have a record you could submit for an insurance claim in the event of a guest causing damage.
The size and nature of a stain is what determines whether it is classified as normal wear and tear or moves into the realm of property damage.
Normal discoloration of couches, towels, and other surfaces won’t typically qualify as property damage, but, a major spill that can’t be cleaned or an item that needs to be replaced, could. It all depends on severity.
So, if a guest were to drop an entire bottle of red wine on your white carpet, they could be held responsible for the damage they caused to your property.
As we’ve mentioned, the extent and cause of the damage is what determines whether something is wear and tear or if it can be reimbursed. Minor scuffs, oil marks on walls, and even small dents caused by repetitive use of your home are to be expected when you have a high volume of guests. Plus, these are small inconveniences that don’t need to be addressed between each stay, since most guests won’t even notice a small scratch on your wall.
However, a guest leaving a significant dent or hole in your wall is definitely considered property damage and is an example of the type of expense short-term rental insurance could cover.
Most minor floor damage is considered normal wear and tear, as floors get scuffed, scratched, and dented over time. But, if a guest causes a significant dent in the floor, something that was clearly the result of blunt force or dropping a heavy object, it would be reasonable to classify that as property damage.
In this case, you could request that the guest pay for the repair, or rely on short-term rental insurance to reimburse you for the cost of repairs.
House appliances & belongings
When identifying the cause of damage to house appliances, it’s important to take into account the age and quality of the appliance in question. A high-quality toaster that is a decade old may work better than a $20 toaster that you bought last year, so be sure to take those factors into account when determining whether a guest broke an appliance or it simply stopped working because of age or quality.
When it comes to belongings and miscellaneous items, accidents happen—and even though a broken glass here and there is inevitable, your short-term rental insurance policy may cover it, depending on your deductible.
Additionally, you can further minimize risk by using a guest screening tool to cut back on the types of guests that treat your property poorly and cause more severe damage to your belongings.
|Pro tip: You should feel comfortable potentially parting with every belonging you leave in your vacation rental. Over time, it’s likely that guests will damage at least some of your personal property, so it’s best to fill your vacation home with non-sentimental items that you wouldn’t be upset about having to replace.
As a host, you can choose to allow pets at your property or prohibit guests from bringing their furry friends. If you have a no-pet policy and a guest brings their pet that causes damage, they are obviously responsible for covering the related expenses.
If you allow your guests to bring pets, you should expect minor levels of wear and tear (after all, most pets aren’t quite as tidy as humans). However, if a guest’s pet causes significant damage, like ripping up furniture or leaving significant stains on a rug, this moves into the realm of property damage, which is where a short-term rental insurance policy may be able to help.
How to protect yourself from wear and tear issues
By being proactive, you can avoid costly repairs. Follow these tips to stay on top of your property’s condition and protect your vacation rental properties from both wear and tear and significant damage.
Maintain updated imagery
A key tip for dealing with wear and tear is maintaining updated imagery of your property and its contents. In order to identify if something is actual damage or just gradual wear and tear, you need to have up-to-date photos on hand.
A guest isn’t likely to inform you if there’s a dent on the wall after they check in (they aren’t renting a car, after all), so it’s up to you to closely document the state of your rental units. Take photos once a month or every few months, depending on how high your occupancy is, to protect yourself against undisclosed damage and excessive repairs.
Screen for high-risk guests
One of the best ways to minimize wear and tear and damage is by filtering out high-risk guests. Guest screening helps you vet potential guests so you can be confident you’re not renting to people who have a history of causing issues at short-term rentals.
Take advantage of specialist short-term rental (STR) insurance
When the damage at your vacation rental goes beyond basic wear and tear, turn to short-term rental insurance to help cover those expenses. With the right insurance provider, you can enjoy a seamless claims process and quick payout so you can stop worrying about damage-related expenses and get back to running your business.
Be proactive to combat the costs of vacation rental wear and tear
While managing wear and tear is an inevitable part of your job as a short-term rental owner or manager, there are steps you can take to limit the costs and protect your business.
First, understand what constitutes wear and tear vs. serious damage so you know when you are responsible and when your guest is.
Also, be sure to keep close tabs on the state of your property through thorough and frequent inspections, documenting everything with updated imagery.
Finally, protect your business and minimize your spending with guest screening and dedicated short-term rental insurance: Do your best to prevent risky renters, and be confident you’re covered in the case of serious damage.
Protect your business from costly damages with Safely’s short-term rental insurance.
Frequently asked questions about vacation rental wear and tear
Can you deduct losses on a vacation rental property?
Depending on how many days a year you rent out your vacation rental property to guests, and how many you use it yourself, you can deduct certain losses, like casualty and thefts, on your taxes. This can include things like natural disasters and vandalism caused by guests.
Though, be sure to consult with a tax professional to learn whether your business is eligible for these deductions.
How much is the average annual wear and tear?
The average annual wear and tear for short-term rentals can become complicated to calculate considering the various factors that affect the amount of wear and tear your property will undergo. Your occupancy rates, where your property is located, and the age of your property all have an impact on how much wear and tear it will undergo.
What are the costs of wear and tear?
The costs of wear and tear will depend on the traffic your property sees, and the current state it is in. But generally speaking, wear and tear expenses should be much lower and more manageable than the cost of repairing any single incidence of significant damage—but if you have specialist STR insurance, you might not incur any costs at all.
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