Category: Autohost AI

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 Booking.com, 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.

 

CONTACT US

It is with an aching heart that we share the devastating news of our Co-Founder and CEO’s passing. Anton died, in his sleep, on September 6th of an unexpected heart attack. He was 33, he was larger than life, and he will stay that way forever.

Those who had the pleasure of knowing him got to experience the raw energy that he spread wherever he went. He was ambitious and fearless, he was funny and charming, he was honest, determined, and true to himself. He was, and always will be, a source of inspiration.

Not many can claim to live life to the fullest, but Anton was one of those few. Life was an adventure and he absorbed every bit of it. Whatever the challenge, he went all in because he made a point to be the best. He was passionate about success, and not only his own. Success in business, in life, in overall growth, the success of his friends, our clients, and partners. He wanted to see people thrive and he touched so many lives in his pursuit to make that happen.

When we say that we’re committed to continue his legacy and strive to fulfill the mission we set together, that’s exactly what we mean. We will do everything we can to learn, innovate, and always be the best; we will embrace challenges and grow from them; we will go the extra mile to make sure we build strong partnerships and real relationships, focusing on continual collaboration, so that everybody wins, so that we all succeed, so that we make him proud.

Goodbye old friend
You’ll soar again
Forever young and free
We’ll hear your voice
In howls of wind
And every swell of sea
Goodbye old friend

A rise in fraudulent activity caused by the pandemic has cemented the fact that property managers can’t rent their properties out to just anyone. That’s how you get hit by parties, property damage and criminal activity. To prevent these types of incidents, property managers rely on security measures to vet their guests ahead of time.

One of the most common security measures is ID verification, which involves confirming that the personal information submitted by the guest corresponds with their real identity. While the end goal is the same, different companies approach the ID verification process in different ways. Larger property management companies may rely on third-party vendors to automate the process, while smaller property management companies may opt to do it manually—collecting and reviewing ID documents for every guest.

KYC in hospitality:

In the banking and finance sectors, KYC is a standard practice used to verify the identity of an individual or a business entity. In the hospitality context, KYC encompasses not just ID verification but a full spectrum of analyses—think of it as deep-diving into multiple pools of data to get a 360-degree view of your guest. It can include scrutinizing transaction history, social media activities, behavioral patterns, and even travel history to evaluate the potential risk of illegal intentions.

How Does It Work?

Imagine you’ve got a guest who’s passed the ID verification checks, but there are a few red flags in the reservation details—maybe it’s a last-minute booking for a single night, and the guest is local. Traditional ID verification may let this reservation slide through, but KYC will urge you to take a second look.

The KYC process will typically involve:

Document Verification: The initial step, similar to traditional ID verification.
Behavioral Analysis: Scrutinizing the guest’s actions during the booking process, like the speed of filling forms or the device used for booking.
Transaction Monitoring: Looking at the method of payment to see if it aligns with typical guest behavior or flags as unusual.
Social Media and Online Presence: Evaluating the guest’s digital footprint for congruency with their given “story.”
Previous Stays and Reviews: Checking feedback from other property managers or hotels where the guest has stayed before.

The role of ID verification in rentals can be explored further in articles about streamlining security in the hospitality industry.

Why It’s Crucial?

KYC allows you to create a comprehensive risk profile that can inform your decision-making process more effectively than just an ID verification. It acts as a complementary tool that fortifies your vetting procedure, giving you the confidence that you’ve done everything you can to ensure the safety and integrity of your property.

And let’s face it, while a fraudulent guest might go through great lengths to forge an ID or even provide a stolen one, it’s significantly harder for them to fabricate a convincing digital life or consistent behavioral patterns. In other words, the more layers of verification, the harder it is for fraudsters to slip through the cracks.

So, while ID verification remains a critical aspect of guest vetting, incorporating KYC into your hospitality business can make your preventive measures more robust. With the rise of increasingly sophisticated fraudulent tactics, it’s more important than ever to cover all your bases. Because when it comes to the security of your property and peace of mind, there’s no such thing as being too careful.

ID Verification and Background check:

Proper ID verification is a great first line of defense when it comes to preventing malicious incidents. But unfortunately, fraudsters are becoming more sophisticated, outmaneuvering current ID verification methods. This means that even property managers with the most thorough process can still be left exposed to fraud, parties and worse.

Debating the sufficiency of ID verification is linked to how security is streamlined in hotels.

How ID verification works?

There are multiple methods used to verify a person’s identity. They can range from verifying a guest’s personal information online to examining their physical IDs to using cell phones to confirm their identity. The process used will depend on the transaction and the level of risk associated with it.

In the case of short-term rentals, the risk level tends to be higher since you’re giving a stranger access to a major asset: your property. As a result, the short-term rental ID verification process should require the guest to submit a copy of their government-issued ID. Then it’s up to you as the property manager—or the vendor you’re using—to check the information on the ID against the booking information, ensuring it matches.

To confirm that the ID hasn’t been tampered with, you can use ID parsing technology to scan the document, checking whether there’s information encoded in the barcode on the back of the ID, and if that encoded information matches the information on the front of the ID.

To protect against stolen identities and impersonations, you can collect selfies and match the guest’s face to the photo on the ID document.

Related Post: How Does Vrbo ID Verification Work? The Complete Guide

Where ID verification falls short?

There’s no denying it—ID verification is an important part of any hospitality business as it helps remove anonymity from the guest’s reservation. By implementing the right tool, you can flag attempts to evade identification or deceive your guest services team.

For example, oftentimes when someone modifies information on their ID, they mess with the document’s security features, so by examining these, you can see if a guest is using a digitally-altered ID.

On the other hand, if a guest is using a stolen ID, you can catch them with facial recognition technology by matching their selfie with the photo in the ID they provided.

Requiring the guest to upload a photo of themselves creates an extra hurdle that might deter a fraudster, but it still can’t verify your guests with 100% certainty. These days, selfies, and other personal details, are available through darknet forums and marketplaces. Fraudsters can purchase legitimate user profiles, containing a real ID and other information they need to fool a basic identity check.

In the mix with legitimate (but stolen) IDs are professionally forged documents. Modern counterfeit IDs have become so advanced that they can go undetected by ID verification solutions, especially when the barcode information matches the information on the front of the ID.

The limitations of ID verification highlight the importance of understanding Vrbo’s ID verification process.

Booking.com id verification:

When we discuss ID verification and KYC in the hospitality industry, it’s worth noting platforms like Booking.com have implemented some advanced verification features. Their ID verification process typically includes requirements for government-issued IDs and often features real-time verification, which not only adds an extra layer of security but also complements the KYC procedures you may already have in place.

As a host, you receive a wide array of information about your prospective guest, ranging from past stay reviews to booking behavior. This data is invaluable for creating a more comprehensive risk profile of your guest, as encouraged by KYC practices. By leveraging the resources provided by Booking.com’s ID verification system, you can bolster your existing KYC measures, creating a more resilient and comprehensive guest-vetting procedure.
While it may be tempting to rely on third-party platforms like Booking.com to handle all aspects of ID verification, remember that these systems are most effective when used in conjunction with your own guest screening methods.

ID verification is not foolproof.

To keep up with the increasing sophistication of cybercrime and fake IDs, you need to be looking at other data points as well—not just the ID document.

Leveraging alternative data

To prevent all types of incidents at your properties, you need to analyze as many data points as possible.

Even when an ID verification is successful at either flagging or verifying a guest, it still can’t determine their intentions at your property. To do this, you need to assess the booking parameters. By examining details on and surrounding the guest’s reservation, you can get a better idea of who they are and what they’re planning to do during their stay. For example, there are certain booking conditions that might make a reservation higher risk, including:

• One-night stays
• Last-minute bookings
• Local guests

If a reservation is booked under these conditions, that doesn’t mean that it’s inherently risky. However, you should look at these risks in comparison with other data points.

There are data points connected to a guest’s reservation that can let you know whether or not they’re involved in suspicious or malicious activity. By analyzing the guest’s digital footprint, including their email address, phone number, IP address and social media presence, you can confirm they are who they say they are—or confirm any suspicions you had concerning their “story” (their purpose of stay, who they’re traveling with, etc.)

While ID verification is essential to your business, it’s just a piece of the puzzle. To properly determine the risk level of a reservation, you need to analyze the guest’s entire profile. That means looking at all data connected to the guest, their booking and their digital footprint.

 

 

PROTECT YOUR BUSINESS TODAY

Here are some highlights of the many recent features we released:

Improved Fraud Predictions

We are incredibly proud of this one. This month, our data science team released a significant update to the machine learning AI model we use to predict credit card fraud. This upgrade bring significantly improved prediction performance and accuracy. We expect this update to help further reduce chargebacks and other risks to our customers. Our screening AI will highlight concerns for each transaction on your dashboard for your team to review in priority.

Reseller and Channel Partner API

Our channel partners and resellers have requested better tools to help them manage the tremendous demand for transaction and identity validation solutions within their platforms. This new API aims to decrease onboarding times.

Authority Reporting Updates

The address field in the Police Reporting screen now uses faster auto-complete and address validation using Google Maps. This change improves the user experience and data accuracy.

Improved Billing Address Validation

We released an improved Screening AI validator for credit card billing addresses. The Autohost Screening AI will highlight anomalies and concerns on your dashboard.

International Digital Contracts

As our customers expand to new international markets, they also need to ensure legal documents are easy to read and understand. Internationalization support for our Usage Agreements and Digital Contracts screen was released to help our customers provide the best user experience.

Track HS Integration

Autohost now officially supports Track HS customers. Integrating Autohost with your Track account is easy. You’ll need to create a new API key and provide it with your subdomain on the signup page.

Updates to Stayntouch Integration

We released a few minor fixes and improvements to our Stayntouch integration. Improvements include better booking source name and guest info resolution.

Personal Info Collection Screen

You can now configure the Personal Info screen on the Guest Portal to collect your customers’ home address and date of birth for insurance and regulatory compliance.

At Autohost we are constantly innovating and looking for ways to make our customers successful. Here are some highlights of the many recent features we released:

• OFAC Sanctions – Every transaction and reservation are searched against the sanctions and embargo list. Previously this was only available via our Background Check product. We decided to enable this at no charge for all customer throughout 2022 in light of the recent tensions in Ukraine. 
• Device Fingerprints – Autohost will highlight reservations that belong to people who have been previously implicated with fraud or other issues within customers’ properties. 
• Zapier Integration – Connect your reservations and guest data to 4000+ apps, including SalesForce, Mailchimp, Asana and more. 
• Upsells – Charge for early check-ins, pet fees, resort fees and taxes. 
• Messaging Webhooks – Send API calls whenever Stargate is supposed to send a message based on its rules. 

As an industry dependent on mutual trust between businesses and customers, hospitality is a prime target for fraudsters. According to the Association of Certified Fraud Examiners, 5-6% of the $3 trillion of revenue generated by the industry annually is lost to fraud. That amounts to $150 billion in direct losses.

Identity fraud, especially, is rising year over year. And with an increase in COVID-19 related phishing scams, it’s getting worse. In fact, from January to Sept. 1, 2020, according to the FTC, consumers reported losing more than $130 million to COVID-19-related fraud.

In hospitality, particularly the short-term rental industry, fake and stolen IDs have become a prevalent form of fraud, used to book accommodations online. If you’re a property manager in the space, consider yourself vulnerable to identity fraud.

Where do fake IDs come from?

Fake IDs first appeared in the U.S. around 1970. Rare and unsophisticated, they were primarily used to sneak into nightclubs. Since bouncers and bartenders were unaccustomed to dealing with fakes, it was easy for minors to slip through the front door. At the time, there was also the added bonus that few states required IDs to have pictures.

But in 1984, things took a turn. New Jersey Senator Frank Lautenberg initiated a campaign with Mothers Against Drunk Driving (MADD), passing the National Minimum Drinking Age Act, which forced states to push their legal drinking age to 21. As a result, fake IDs flooded the U.S. market.

The challenge of spotting fake IDs requires an understanding of modern hotel security systems.

Fake IDs in hospitality

Fake IDs are now being used for more than just under-age drinking. They’re being employed to bypass hospitality security, allowing fraudsters to book stays in top hotels and rentals without sounding any alarms for operators. As a result, these major companies have no idea who they’re hosting, exposing them to increased risks.

Considering the growing number of identity fraud cases and the evolving savviness of fake IDs, many hospitality operators are at a loss for what to do. Insurance around identity fraud is murky with plans designed to cover those who’ve had their identities stolen, rather than peripheral victims. At best you might receive coverage on property damage inflicted by the fraudster. Ultimately, you’re left operating with a degree of vulnerability.

But identity fraud is preventable. You just need to be proactive. Stop fraudsters before they enter your property to save your business money and improve your reputation.

The issue of fake IDs in the hospitality industry highlights why robust ID verification is essential.

FIND OUT WHY ID VERIFICATION ISN’T ENOUGH

To help protect your business against identity fraud:

How to check for fake ids?

As a property manager or hotel booking staff member, your role in verifying IDs is crucial to ensuring the safety and security of your establishment. To identify a fake ID, you’ll need to pay close attention to various elements of the document:

Quality and Material:

Genuine IDs are made with specific materials and technologies that are difficult for fraudsters to replicate. A fake ID might feel flimsy, the lamination might be peeling, or it might just not feel right. The use of embossed text, microprinting, or holographic overlays are common security features that are challenging to counterfeit accurately.

Photo and Information Consistency:

Check the photo and personal details carefully. The person standing in front of you should closely resemble the photo, and the height, eye color, and other personal details listed should be consistent with the individual. Any discrepancy could be a sign of a fake ID.

Spelling Errors:

Counterfeiters often make mistakes in the spelling of place names or use incorrect fonts. Any typos or font inconsistencies are red flags that you’re dealing with a fake ID.

Holograms and UV features:

Most modern IDs have built-in holograms that become visible under certain light conditions or UV features that can only be seen with a UV light. If these are missing or poorly executed, the ID might be fake.

However, remember that fake IDs are becoming increasingly sophisticated, so staff training and the use of ID verification technology can be vital assets in the battle against identity fraud. These technologies can quickly scan IDs for all the security features, cross-check information with global databases, and flag any potential issues within seconds.

Remember, if you have any doubts about an ID, it’s better to err on the side of caution. Reach out to local law enforcement for further verification if necessary. Being vigilant about ID verification can help protect your property, your guests, and your reputation in the long run.

Know Your Guest

It’s important to catch fraudsters at the gate, before they do any damage. The first step is identity verification. In the finance industry, this is a requirement for Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance. By noting data mismatches in the transaction, businesses can reduce fraud. That’s why in hospitality, it’s important to Know Your Guest. Do your due diligence by learning about the guest and the potential threat they pose.

How to spot a doctored ID

Depending on your business model, you may provide in-person check-ins for each guest. Rather than handing over the keys right away, take this as an opportunity to verify their ID. When presented with the physical copy, feel for thickness around the photo and the edge of the lamination. If it feels uncommonly thick, it may be an indication that a second photo has been placed on top of the original and re-laminated.

If you’re performing the ID verification online, it can be trickier. Applications like photoshop have made it easier to produce fakes. Make sure the piece of ID submitted by the guest includes a photo, is government issued, is valid (not expired), and includes the guest’s date of birth. When scanning these features, also watch for any spelling mistakes and inconsistencies in the numbers and letters. Depending on the state and country, different IDs use different fonts. Compare the ID to a verified version on the state’s Department of Motor Vehicles to make sure they match.

Finally, take a close look at the ID’s photo. Many ID photos are taken in a way that is difficult to replicate, including the backdrop and how the photo is cropped. Some newer IDs will include a cross-hatching design across the face of the card and may also include a small hologram version of the photo in one of the corners—which is difficult to replicate on photoshop.

If something about the ID doesn’t add up, don’t be afraid to cancel the reservation. Stolen or damaged property will cost you a lot more than a missed night.

How to spot a stolen ID

Stolen IDs are becoming more prevalent as online travel agencies (OTAs) and property managers add age restrictions on their listings. To secure bookings, young people are using borrowed or stolen IDs, leaving them unaccountable in the cases of parties or property damage. Worse yet, criminals commit identity fraud to sneak into rental properties, using the space for illicit activities.

And while there are ways to check if you have been a victim of identity theft, it’s much harder to catch the perpetrator. With self check-ins especially, stolen IDs can be difficult to spot. The ID is technically authentic, so if your team analyzes a photo of it online, it likely won’t raise any red flags.

To monitor for stolen IDs, your team needs to thoroughly screen every reservation. Check the ID against the name of the guest who made the reservation and against the credit card they provide. If the two don’t match, reach out to the guest to inquire about the discrepancy. Try getting the guest on the phone. Guests using a stolen ID are likely to dodge your calls or give evasive answers.

Do hotels scan ids?

In an effort to combat identity fraud, an increasing number of hotels are now implementing ID scanning as a mandatory part of their check-in procedures. These scans provide a more accurate and efficient method of verifying guest identities and are a significant step towards enhancing the security and safety of both the establishment and its guests.

ID scanning in hotels often involves using specialized equipment or software to digitally capture and store the information presented on a guest’s identification document. This process allows hotel staff to swiftly spot any discrepancies or irregularities that may indicate a fraudulent ID. In many cases, the software can cross-verify the information against global databases or use advanced features such as facial recognition to compare the ID photo with a live image of the guest.

This procedure doesn’t only fortify the hotel’s defenses against identity fraud; it also aids in streamlining the check-in process, ensuring that accurate guest data is collected and stored for future reference. As such, ID scanning is becoming a standard in the hotel industry as it seeks to meet the growing challenges of identity fraud head-on.

Analyze the reservation details

When it comes to pinpointing stolen IDs, it’s important to analyze all details surrounding the guest and their reservation. If your property was booked by a high-risk guest, it’s likely the reservation will show other suspicious characteristics beyond the ID upload. Keep an eye out for specific techniques that are commonly used by identity fraudsters.

For example, many fraudsters use prepaid credit cards and phone numbers when booking accommodations. With these as a shield, they can mask their identity. To counteract this, have the guest submit a selfie and compare that with the photo on the ID.

Pay extra attention to the conditions of the reservation. For instance, fraudsters using stolen cards are more likely to book last-minute, giving you as little time as possible to look over their reservation. Do not accept a last-minute booking without thoroughly investigating the guest.

If a single person booked a three-bedroom condo in the middle of downtown, that might also be cause for concern. Embrace your apprehension and reach out to the guest for more information. It’s particularly useful to find out why they’re travelling and where they’re travelling from. Vague answers like sightseeing are a red flag, especially if they’re local. Ask them to elaborate. If they refuse, it’s not worth the risk.

What to do if you spot a fake ID

If you encounter a guest using a doctored or stolen ID, flag them immediately and report the guest to the associated OTA—they could be scamming others. Keep a record of the guest’s ID in your database. You may need to submit it as evidence to the OTA to secure a refund for the canceled reservation. Plus, it’s always wise to have all information pertaining to the reservation accessible in case you require documentation down the line.

If you’re uncertain whether the ID is a fake, reach out to the guest over the phone to collect more information or to confirm their booking. The act of phoning can be illuminating, allowing you to check the number’s area code against the address on the ID and whether the number actually belongs to the guest.

If you’re still unsure, you can ask the guest to submit to a police-verified background check, confirming that the ID does in fact belong to them. A guest using a stolen ID likely won’t consent and will instead cancel the reservation.

Automate your screening process

To keep your business safe, it’s imperative you screen every reservation. But even with a well-trained support team, this takes time and resources. Instead, consider automating the process for a cohesive and efficient check-in flow.

With a tool like Autohost, you can verify every reservation, using a global database of IDs to spot fakes and flag risky guests. The whole process takes seconds, keeping your operations smooth and efficient.

 

REACH OUT TO AUTOMATE YOUR GUEST SCREENING

The COVID-19 pandemic has flipped the vacation rental industry upside down, forcing many property managers to rethink their business models. One of the biggest changes has been a shift from short-term rentals to mid-term rentals as property managers navigate rental bans and capitalize on the current need for long-term accommodation.

Switching to medium term rentals, however, isn’t always easy. While both types of rentals bring in rental income, there are differences you need to consider.

Here are some tips on how to convert to a mid-term rental:

The differences between short-term and medium term rentals:

Rental Bans

The most notable difference between the two types of rentals is their length of stay. In most jurisdictions, short-term stays last 1-30 days, and mid-term stays last 1-12 months. Based on these terms, many cities have banned short-term rentals, but permitted mid-term rentals. In some cities this ban is a temporary response to the spread of COVID-19, while other cities have banned short-term rentals permanently, seeing them as disruptive to the community. Make sure you understand how your area differentiates the two.

Tenants’ rights

Another legal difference between these two types of rentals is whether or not the occupants are covered by tenants’ rights. In several states, occupants staying 30 days or less are not covered by these rights. But if your guests are covered by these rights, it’s important to clarify the intended length of stay so that you don’t have to deal with a difficult eviction process. Before switching to the mid-term rental model, familiarize yourself with your area’s tenants’ rights.

Types of guests

Each type of rental attracts different guests. Mid-term rentals tend to play host to people traveling for essential purposes, such as work, while short-term rentals attract people traveling for non-essential purposes, such as vacations or events. As a result, short-term rentals come with a higher risk of parties and a greater need for damage protection.

Understanding the mid term rental lease agreement:

An integral part of transitioning to mid-term rentals is understanding the mid-term rental lease agreement.

This agreement is a legally binding contract that delineates the terms and conditions of the rental, including the duration of the stay, monthly rent, security deposit, rules, and termination clauses. Unlike short-term rentals, where agreements are often less formal, mid-term rentals require a more comprehensive lease agreement due to the length of the stay and the tenant’s legal rights.

Having a clear and comprehensive lease agreement not only provides security for both the renter and the landlord, but it also sets clear expectations for both parties and can help to prevent disputes later on. While drafting a lease agreement, ensure it’s customized to your property, jurisdiction, and specific circumstances. For example, you may wish to include rules about pets, maintenance responsibilities, and procedures for resolving any potential disputes. You can also specify penalties for early termination or for failing to comply with the terms of the agreement.
Remember, it’s important to consult with a legal expert to ensure your mid-term rental lease agreement is compliant with local and state laws. Legal advice is crucial as regulations can vary widely, and non-compliance can lead to serious consequences. By understanding and implementing a robust mid-term rental lease agreement, you’re protecting your property, your business, and ensuring a positive and straightforward experience for your tenants.

Pros of switching from short-term to mid-term rentals

While they may not bring in sky-high rates, there are advantages to switching from short-term to mid-term rentals, especially as property managers fight to recover from the pandemic:

• People looking for mid-term rentals are more likely to be traveling for essential purposes.
• You don’t have to worry about hotel taxes or short-term rental bans.
• With fewer check-ins, turnovers are more manageable.
• You can reduce the frequency of cleaning, cutting costs.
• By dealing with fewer guests, you’ll be able to simplify your process.

Switching rental models can involve comparing background checks versus guest screening effectiveness.

Determine if your property is the right fit for mid-term stays

If you’re interested in listing your property for mid-term stays, the first step is determining whether it’s a good fit. People in the market for a mid-term rental aren’t on vacation; they’re looking for a place they can call home for a few months. This includes people in transition with work, students taking part in a co-op placement, frontline workers and so on.

These guests aren’t looking for the kind of amenities offered with short-term rentals, like a hot tub or ocean view. They want practical features, like larger square footage, a fully-operational kitchen, a laundry machine, separate bedrooms and friendly neighbours. To determine whether your property is an adequate mid-term rental, you need to be able to picture it as someone’s home.

Navigating Airbnb for Mid-Term Rentals:

For many property managers, Airbnb has become an essential platform for managing and advertising rentals. While traditionally known for short-term vacation stays, Airbnb also accommodates mid-term rentals or monthly rentals, providing an expansive marketplace for hosts and guests alike.

Airbnb’s platform is designed to make mid-term rentals seamless. You can easily set minimum and maximum stay durations, customizing your listing to attract the right kind of renters. Moreover, Airbnb provides a range of tools and resources for hosts transitioning to the mid-term rental model. These include features like the price setting tool, which helps you competitively price your property for mid-term rentals, and the availability settings, allowing you to block off dates for extended periods.

Remember, it’s essential to accurately represent your property in your Airbnb listing, ensuring guests know exactly what to expect. For mid-term rentals, guests are often looking for a comfortable, home-like environment, so highlight the practical features of your property, such as a fully-equipped kitchen, workspace, or laundry facilities.

And while Airbnb can be an excellent avenue for mid-term rentals, it’s just one of many platforms available. Be sure to explore all your options to find the best fit for your rental property and business model.

Steps to set up your mid-term rental:

1. Market your property

Once your properties are set up for long-term guests, start marketing them by listing on the right booking channels. Sites like Airbnb and Vrbo can be effective, but they tend to cater to vacation rentals and shorter stays. If you want to specifically target long-term guests, you should list on platforms like Kopa, which specializes in listing mid-term rentals. Craigslist, Facebook Marketplace, and local Facebook groups are other good places to list. Be creative with your marketing strategy. Think outside the box to get the word out.

2. Tailor your listing

To get the most money for your property, it’s important to make it stand out to potential guests. An easy way to do this is to create a description that’s tailored for a mid-term rental. While a short-term rental description might highlight its skyline view or nearby attractions, a mid-term rental description should be more practical. Include the distance to the nearest grocery store and the closest bus stop.

Also, think about what type of guest might be attracted to your property’s neighborhood. Is your property located within walking distance of a hospital or across the street from a subway station? Does it include a private entrance to limit encounters with other individuals? These are all marketable qualities a potential guest may be looking for.

3. Calculate your rental income

When deciding on a price for your property, make sure to list it within the local market range. Be aware that mid-term rentals typically earn less per night than short-term rentals. You should discount your mid-term rental rate by at least 25% of what it would cost for a month at your short-term rate.

For example, if your nightly short-term rate is $150, here’s how to calculate your maximum mid-term rate:

• One month’s rent at short-term rate: $150 x 30 nights = $4,500
• Twenty-five percent of one month’s rent at the short-term rate: $4,500 x 0.25 = $1,125
• Maximum monthly rent at the mid-term rate: $4,500 – $1,125 = $3,375 (but don’t forget to account for tax and service fees!)

While it may seem like a decrease in revenue, remember that your property will be fully booked for multiple months.

4. Choose the best guest for you

With mid-term rentals, it’s just as important as short-term rentals—if not more important—to screen your guests. After all, these renters will be staying at your property for months, not days. Collect personal information and contact details to paint a better picture of your guest. To ensure payment, request first and last month’s rent. And for ultimate peace of mind, consider running a credit check or asking for a letter of employment.

5. Have the guest sign a rental agreement

Once you’ve found a suitable renter, have them sign a legally-binding rental agreement. This should outline house rules, the price of rent, when rent is due, and other important factors. Security deposits for mid-term rentals are standard—usually the equivalent of one month’s rent. Having this agreement can also prevent guests from overstaying their welcome.

As with any rental home, it’s important to follow up with renters to see if they have any questions or concerns with the agreement.

Weighing the differences

While mid-term rentals aren’t necessarily the most lucrative type of rental, they’re often easier to manage, especially when compared to the break-neck pace of short-term rentals. If you’re looking to carve out a bit more time in your operations, consider converting some of your properties to mid-term rentals. You can focus your time and resources on streamlining your business and perfecting the guest experience.

Hosts learned the value of switching to direct bookings the hard way.

After losing control of their business through OTAs’ aggressive cancelation policies and reactions to the crisis, hosts realized there’s more at stake than the commission they pay.Having your own website allows guests to book with you directly, instead of through an online travel agency (OTA). Benefits of direct booking are:

• You don’t have to pay commissions
• You have full control over your short-term rental business
• You won’t be at risk if something happens to your listing on the OTA

Operators are afraid that direct booking sites will put them more at risk of hosting bad guests without the protection that some OTAs offer. Airbnb’s Host Guarantee covers up to $1 million USD of property damage. Without the OTA safety net, how can a host mitigate risk?

Hosts around the world have complained about the difficulty of getting OTAs to reimburse property damages. A South Carolina host claimed that Airbnb didn’t fully cover the damages he faced after guests threw a 100-person party. Even if it had reimbursed him the full amount, he still would’ve been responsible for cleaning and fixing his property. It’s risky to leave your property’s security in the hands of a third party.

The best security is proactive and done by the host and not an OTA. Fortunately, for hosts who allow direct bookings, there are ways for you to protect yourself more effectively than any OTA could.

Direct Bookings for Short Term Rentals

In the era of the shared economy, short-term rentals or vacation rentals have emerged as a popular alternative to traditional accommodations. Many hosts are now exploring the option of direct bookings, which allows them to regain control, eliminate commissions, and manage their businesses more efficiently. However, establishing a secure and safe direct booking process is crucial for both the guests and hosts. Here’s how you can set up a direct booking process that ensures your business’s security while providing a seamless experience for your guests.

Step 1: Design a Professional Website for Direct Bookings

Before you can set up a direct booking process, you need a professional website to showcase your property. Use high-quality photos and clear descriptions to provide potential guests with a vivid idea of what they can expect. Integrating a secure payment gateway is a crucial step in establishing trust with your guests. Implement SSL encryption and choose a trusted payment processor to ensure secure transactions.

Step 2: Install a Reliable Booking Engine

A booking engine allows guests to check the availability of your property for their preferred dates and make a reservation directly. There are many third-party booking engines available, offering features like calendar management, automatic confirmations, and integrated payments. Choose one that is mobile-friendly, easy to integrate with your website, and offers robust security features.

Step 3: Set Clear Booking Policies

Outline clear booking policies including your cancellation policy, check-in and check-out times, pet policy, smoking rules, etc. Make sure these policies are easily accessible on your website to ensure guests are fully aware of them before making a booking. Clear, transparent policies help set expectations, reduce potential disputes, and provide a framework for handling any issues that may arise.

As a vacation rental owner, establishing a secure and reliable direct booking process can be advantageous. It allows you to save on commissions, exercise greater control over your business, and build direct relationships with your guests. However, safety and security should never be compromised in the pursuit of independence. By following the steps outlined above, you can ensure a safe and secure booking process, protecting both you and your guests.

1. Implement a guest-screening process

With the increase in vacation rental scams, you need to have a structured way of screening and verifying guests. At a basic level, this can include:

• Emailing guests and verifying that they reply from the same email address
• Calling guests and asking them questions about their upcoming travel plans
• Checking the area code of guests’ phone numbers
• Asking guests for a copy of their ID
• Running a background check*

*You should be careful with a background check. It’s not directly indicative of whether somebody will commit a crime on your property, and may leave you liable with the FCRA (Fair Credit Reporting Act).

If you’re still on the fence about someone after you’ve screened them, you can choose to meet them in person as a final check.

Manual guest screening can be a lengthy and tedious process, involving many different elements—but it can pay off. To paint a better picture of the guest-screening flow, here’s an example:

Phone verification

Let’s say that someone reserves through your direct booking website. A first step could be entering the provided phone number into a validator tool to see if it’s a real phone number. (There are plenty of free tools available online.)

Then, check the area code of the phone number. Local reservations tend to be riskier since there’s almost no reason for someone to book a property when they live 20 minutes away.

While having a local number doesn’t mean a guest is a fraudster, it does raise some red flags.

Finally, you should call the guest. Fraudulent guests almost never answer the phone, preferring to text instead.

When they answer the phone, you can ask the guest a series of screening questions to verify their story.

For instance, if a guest is coming in by plane, consider asking for their flight number. You can phrase the question as you wanting to monitor their flight in case anything changes. The purpose of this is to check for inconsistencies. A guest who’s unable to give you their flight number or gives you a different one is probably fraudulent.

Benefits of Screening Guests

Screening guests may seem like a hassle since you’ll have to verify the identity and story of each guest. However, the benefits of doing so are long-lasting and can skyrocket your vacation rental business. Some benefits include:

• Improving your hosting reputation
• Removing unnecessary booking restrictions
• Cutting property damage and maintenance costs
• Avoiding situations like squatters

For instance, hosting on NYE can be extremely lucrative. This upside potential, however, does come with the increased likelihood of parties.

While many hosts may refuse all one-night NYE bookings, doing so means losing out on significant revenue. Having a guest-screening process allows you to remove these restrictions while securing your ideal guests.

If you don’t want to screen each reservation manually, you can always automate it. Tools like Autohost streamline the process, removing the grunt work for operators. (They also remove the possibility of human error.)

 

GET STARTED WITH GUEST SCREENING

2. Get Short-Term Rental Insurance

While screening guests is a great way to proactively protect yourself, some bad guests may still sneak through. That’s why it’s advisable to get your own insurance policy to protect yourself in case anything happens.

Depending on your insurance carrier, your homeowners policy may provide limited coverage. Most insurance carriers, however, don’t cover short-term rentals, and those that do, don’t usually provide sufficient coverage. That’s why many hosts and operators end up getting additional insurance for their vacation rental properties.

There are many insurance policies available, and choosing one might be overwhelming. Take the time to research your options and figure out which one is best for your specific situation. If you struggle with legalese, it may be helpful to speak with a real estate lawyer to figure out the best plan for you.

3. Draft and Enforce a Host-Guest Contract

Beyond a screening process and insurance policy, you also want to have a host-guest contract that guests sign upon booking. This document should mention:

• Guests: Outline the registered guests. Any unauthorized people will be considered trespassing, which is a crime.

• Property: Describe your property and the amenities included. For instance, if you have a room that’s off-limits to guests, mention that in the contract.

• Check-In/Checkout: Include check-in/checkout dates and times. Mention any fees related to early check-ins or late checkouts. This will help you prevent squatters, especially if you offer mid-term rentals.

• House Rules: Explain your house rules. Having a clear list of what’s allowed/forbidden will help you to set expectations with guests. You’ll also be able to punish guests for any violations.

• Costs: Break down the total costs, including rental costs, cleaning fees, and security deposits. That way, guests won’t be able to claim you overcharged or had hidden fees.

• Deposits & Damages: Outline what the security deposit covers. You should explain what constitutes damage vs. reasonable wear and tear. This will allow you to enforce your security deposit policy, even if guests complain.

These are only some of the items you should include in your rental agreement. To make sure that you’ve covered all your bases and that the contract is legally binding, you should work with an attorney.

4. Use Smart Devices for Security

For additional protection, you may want to install smart devices to unobtrusively monitor your guests. Some ideas include:

Smart Locks

Smart locks are installed on doors and are opened by punching in a code. Most smart locks can be managed remotely, allowing you to create and delete lock codes from your mobile device or computer. Some can even integrate with your channel manager. You’ll also be able to keep track of who uses what code to enter, so you know exactly who’s entering your property.

Doorbell Cameras

Combined with smart locks, doorbell cameras provide a great final layer of security. You can see who’s coming into your property at all times. So, if a guest makes a reservation for two, but five people show up, you can change the door code to prevent entry. Then, you can call your guest and inquire about the extra people.

Noise Sensors

With noise sensors, you can monitor noise levels within your property. Many noise sensors will notify you if the noise levels exceed a pre-set threshold, so you’ll know right away if a guest throws a party.

Protect yourself while maximizing revenue

With the right security measures in place, direct bookings can be safe and profitable. You’ll be able to host without fear of letting bad guests in.