Security deposit
A security deposit is guest money — typically a $500–$1,000 hold or charge — collected before a stay and returned afterward if no damage is found. Recovery is capped at the amount held, and withheld deposits are frequently contested through chargebacks or platform arbitration.
By Andrew Bate, Co-founderReviewed by Stuart BateUpdated
Why this matters for property managers
Deposits were designed for one landlord and one tenant. At portfolio scale they create friction at checkout, tie up staff in per-guest disputes, cap recovery well below the cost of real damage, and produce the dispute threads that homeowners remember. They also earn nothing: the money goes back. That is why most professional operators have moved to a damage waiver program, keeping deposits only where a channel or jurisdiction requires them.
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Security deposit: common questions
How much security deposit should a vacation rental charge?
Where deposits are still used, $500–$1,000 is common, scaled to the property's nightly rate. Above that level abandonment at checkout rises sharply, which is the main reason operators replace the hold with a modest non-refundable waiver fee.
Can a property manager keep a security deposit for damage?
Yes, if the rental agreement allows it and the damage is documented. In practice, withheld deposits are often disputed by the guest's card issuer or the booking platform, and the manager may lose the dispute months later.
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