In order to help prevent damage from being done to your vacation rental property by your guests, it's important to let them know upfront that they must take care of your second home and if they don't, there will be consequences. There are a couple different ways to go about this.

The most common way to prevent damage is to charge a damage deposit (of around $250 or 10% of the total rental amount) which is refunded to the renter only after your housekeeper cleans the property and finds everything as it should be.

With the damage deposit, it's very important to define common instances where portions of the damage deposits would be held.

A second way to let your renters know that you mean business is to impose fines for specific damaged or missing items. In this case, a fine is a flat fee charged to the renters that is stipulated in the rental contract that your renters must sign. For example, you could charge a $25 fine if the remote control to the television is missing.

Other things that you could potentially charge a fine for:

• Evidence of pets on the premises (if you have a no pet policy)
• Lost or missing items (remotes, keys, garage door openers)
• Service calls for unreasonable maintenance requests.
• Evidence of smoking inside or outside of your home (if you have a strict no smoking policy)

If you're going to charge fines for specific items/damages, be sure to use the word “FINE” specifically in your contract.

It's important to clearly define and decipher the difference between damage deposits and fines in your contract, because damage deposits are very much regulated in the real estate industry.

Here's an absurd example:

DAMAGE/RESERVATION DEPOSIT- A damage/reservation deposit of $250 is required. This must be received within seven (7) days of booking the reservation. The deposit automatically converts to a security/damage deposit upon arrival. The deposit is NOT applied toward rent; however, it is fully refundable within (14) days of departure, provided the following provisions are met.

a. A $25 fine will be charged for each missing remote.
b. A $30 fine will be charged for each missing garage door opener.
c. A $200 fine will be charged if there is evidence of pets on the premises.
d. A $200 fine will be charged if there is evidence of smoking on the premises.
e. A $50 fine will be charged for unreasonable maintenance requests.
f. If you lose your keys or are locked out, a $75 fine will be charged.