So who manages what and how do Airbnb payments work?
Understanding the payment system used by Airbnb can be a bit confusing at times but it's always a good idea to know who has to pay what and when. As a host you'll often find yourself faced with these questions from guests and it's extremely useful when you try and do your own accounts. The key to making sense of it is to understand that Airbnb aims to act as the middle-man in every way possible. Their key objectives are to simplify the booking process for both guests and hosts, increase security with relation to the payments as well as acting as the middle-man in case any issues arise.
The Airbnb host service fee
From the hosts perspective Airbnb charges a minimal fee to cover admin fees. This is usually 3% or 3.6% (In VAT countries such as the ones in the E.U.) of the total amount that goes to hosts. Take into account that Airbnb also charges guests a much larger guest booking fee which hosts are not able to view or are in any way involved with. Take into account that this Host fee is also charged on the cleaning fee and will be deducted from the amount that you as a host will set for your listing.
The controversial cleaning fee
There is some controversy as to whether hosts should charge a cleaning fee or not, in our opinion charging a once off cleaning fee makes more sense than adding a small additional fee per day. Ultimately it's up to each host to decide. If you do decide to charge that extra fee to cover the cleaners and laundry service this is paid at the same time as the rest of the booking. This is charged to guests when they confirm the booking and is passed on to hosts 24 hours after check-in. If you are doing your accounts take into account that Airbnb will deduct 3 or 3.6% of the cleaning fee which will be charged as part of the Airbnb host fee.
The host deposit - Deposit or no deposit?
Some might argue that charging a deposit on Airbnb discourages some guests to go ahead and book. Ultimately this is very possible but there are a few factors to take into account:
A. Guests are actually not charged the deposit when they make the booking or at any point in time if no damages are identified by hosts. The deposit is only taken from the guests account if a breakage is found and the host makes a request with Airbnb within 48 hours of the guests leaving.
B. If you do not charge a deposit and something is broken during the guest's stay you can expect to pay for it out of your own pocket. Don't expect the Airbnb host guarantee to come to the rescue. It simply does not apply in the case of involuntary breakages.
C. Charging a deposit actually encourages guests to take extra care of your property, so if you are worried in any way about guests behaving badly charge a deposit.
The thing to remember is that guests will only be charged the deposit if the host makes a request with Airbnb. The host has 48 hours after check-out to check over the property and identify any damages or breakages. If something is identified hosts should get in touch with Airbnb and submit any pictures and proof they have at hand. Once this is done the deposit is charged to the guests to cover the damages incurred. Airbnd acts as the go between to resolve any disputes with relation to the deposit and are generally very good at this.
Timing - So when are payments actually made?
Once both parties have pre-approved each other the booking is finalised and confirmed. At this point in time the guest will be charged the full amount (unless the booking is longer than 28 days) and includes all the different fees but not the deposit. The deposit is dealt with separately and is only charged once the guests have checked out and if the host has identified any breakages or damages. Once the guest has paid for the booking that amount will be held by Airbnb until 24 hours after the check-in day at which point it is transferred into the hosts account. This is to ensure that guests are satisfied with the property and that it lives up to the description and pictures on the hosts profile.
Note that for long lets that are longer than 28 days the payments are collected in monthly instalments on the anniversary of the check in day. This means that hosts will only receive payment for the first month when the guests check-in and that guests will not have to fork out the full amount on the first day of booking. Click here to find out more on long-term lets payments.
Once the guests have checked-out the hosts have 48 hours to identify any damages/breakages/missing items and make a claim with Airbnb, if any are identified this is when the deposit is charged to guests. Click here to find out more on how to make a damage deposit claim.
Setting up your payment method on Airbnb
Airbnb offers a number of options to receive and send payments. Setting up your payment method is very simple, simply go to "account" then "pay-out preferences". For full details click here.
1. Direct Deposit - this will let Airbnb deposit the amount due straight into your bank account. Note that it can take up to 5 days to first set up, this is for Airbnb to ensure that your account is valid and authentic.
2. International wire - the requirements to set this up depends on where your account is located.
3. Payoneer Bank Transfer/Debit Card - take into account that Payoneer may apply some extra charges for withdrawals or currency exchanges.
4. PayPal - once it's set up is extremely simple to use, Airbnb will simply top up your PayPal account when payments are due.
It's free to use to send money or receive money between people within the same country as long as the payment is made by a bank account (which is the case with Airbnb). To check out Paypal fees click here.
5. Western Union - Airbnb offers this option but it does not come highly recommended, expect extra charges for pretty much everything. From deposit charges, processing fees to currency exchange fees.
Keep it simple - and use our one-step hassle-free full management service
At Bedspoke we take great care to ensure everything is set up properly and that the booking process is kept as smooth and hassle-free as possible. We take care of everything, from managing booking requests to optimizing your listing on a daily basis, welcoming guests and taking care of the cleaning. With Bedspoke we take the hassle out of managing numerous short-term lets and simply transfer you the earnings at the end of the month.