5 Considerations When Paying for Your Next Vacation Rental

Paying for a Vacation Rental

The following is a guest post by Alan Lane, co-founder of DepositGuard, on 5 things to consider when paying for your next vacation rental.

By all accounts, renting a vacation home is becoming the preferred way to stay for millions of travelers. Combining a more authentic experience with getting more “bang for your buck" has proven to be a value proposition that resonates and will continue to gain popularity.

While browsing vacation homes online, it is indeed fun to imagine yourself hosting a dinner party with a few of your new friends from the neighborhood or maybe lounging by the home's private pool. However, when it comes time to submit payment, this excitement can turn to hesitation and doubt once you contemplate questions like – What if the pictures are dated or don't actually look like the property? Who am I sending my money to anyway?

My personal belief is that vacation homes are a far superior option than traditional hotels. However, with a business model that requires full payment in advance to reserve a property, there is certainly a level of risk the traveler must be willing to accept that is far above the norm when compared to hotels where you pay upon checkout. This risk requires the traveler to be smart and prudent when deciding which property to book.

Here are 5 things to consider when paying for your next vacation home with the hope it will reduce your reservation hesitation so you are able to “live like a local" more often.


Credit Cards

Becoming more widely accepted in the vacation rental marketplace, this is a recommended way to pay due to consumer protection laws for credit card transactions. As a consumer, if something goes wrong with your rental, you have the right to contact the company that issued your credit card and initiate a chargeback or reversal of funds. This is not a guarantee that your money will be refunded, however you will have the opportunity to submit your complaint and any supporting documentation to your credit card company. In turn, the property owner's credit card merchant account provider will collect the same from the owner. From here, the two credit card companies will make a determination based on what the consumer protection laws allow and what they believe are the facts of the dispute. You should be prepared to be patient as this process generally takes a few weeks to settle.


Once commonplace for vacation rentals, PayPal is becoming an increasingly rare way to pay. Property owners discovered that vacation rentals are not a type of transaction that is supported by PayPal thus burdening them with a risk they have no control over. In a similar fashion to a credit card chargeback, if you pay with PayPal (either their credit card or money transfer service) you can contact PayPal and initiate a chargeback. The difference is that because the owner is accepting payments for an unsupported service they will not be able to defend their position and will simply lose. Their entire PayPal account will be frozen and your funds will be returned. This process will again require some patience, however it is obviously good for the traveler, so if you can still find an owner that accepts this payment method you do have recourse so by all means, go for it.

DepositGuard / Airbnb

Another recommended way to pay, these services amend the traditional vacation rental payment model altogether in an effort to eliminate the traveler's risk. The rental payment and security deposit are submitted (via credit card or electronic check) to these companies instead of directly to the owner. The owner is notified when the payment is received and the money is held in a neutral account until the day after the vacation begins. Upon arrival to the property, if something is amiss, the traveler is able to hold the release of the payment and solve the problem with the owner. If needed, these services will help mediate the dispute in real time. Upon resolution, the money is released according to the traveler and owner's mutual agreement. These services will also help find alternate accommodations if required.

When an owner agrees to use this “trust but verify" payment model and knows funds are held until after the traveler sees the property, odds are, he will be more diligent in setting the correct expectations for the property. The difference between Airbnb and DepositGuard is that DepositGuard is a stand-alone service that can be used with any rental property and Airbnb only works with properties listed on their site.

Wire Transfer, Checks, Western Union, Money Gram, etc.

When you send payment via one of these methods, your money is gone and you have no safety net. We are too smart for that, right?

Trip Insurance & “Worry Free" Guarantees

These are not payment methods however they offer protection for unforeseen circumstances. Generally, trip insurance provides coverage for emergency medical while on vacation and trip cancellations/interruptions due to work reasons and involuntary job loss. Worry free guarantees are not as common in the vacation rental marketplace but offer protection against property misrepresentation, scams, double bookings, vacation home foreclosures and owner bankruptcies. Similar to all insurance type products, the devil is in the details. To file a claim, certain documentation has to be submitted within defined time periods and certain steps have to be taken. For example, one worry free guarantee mandates that to file a claim, the traveler must submit proof that they have already been through and lost the chargeback process with their credit card company or bank. Patience is required to try to get reimbursed but if you believe in insurance, you might want to buy one of these products on your next trip.

Alan Lane is a serial entrepreneur, avid traveler, and an advocate for vacation rentals. A native Texan and resident of Austin, his love for discovering the world started at the age of fourteen after running with the bulls in Pomplona, Spain. Alan is a co-founder of DepositGuard whose team has embarked on the journey of eliminating traveler's reservation hesitation when booking vacation properties.