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How to Collect Money From a Group for a Vacation Rental

When friends or family pool resources, they can get a nice Vacation Rental in a great location that they might not have otherwise been able to afford. Such a plan works swimmingly if you know how to collect money from a group for a vacation rental. You don’t want to end up subsidizing other people’s accommodations especially if you can’t afford it.

Having mooches tag along on your vacation will crank up the tension and stress. The situation won’t be as amusing as it was in the comedy “The Great Outdoors” starring John Candy as Chet Ripley and Dan Akroyd as his brother-in-law Roman Craig. Chet has rented a cabin on a lake for his family. Without an invitation, Roman and his family show up to “share” the vacation with them. Roman proceeds to brag about how much money he makes. The truth is he’s out of work, broke, and hoping to lure money out of Chet with an “investment opportunity.”

The movie is very funny, but in real life it would be a borderline nightmare.

Assuming you can keep the uninvited from crashing your vacation, let’s talk about how to collect money from a group for a vacation rental. This is 100% a situation when a failure to plan is planning to fail. Clear communication of expectations and transparency about costs must be established from the beginning.

How to Collect Money From a Group for a Vacation Rental

Step 1. Set the Budget Before Booking Accommodations

For the best results, have everyone agree to a budget. This prevents people from having to back out of the trip because a vacation rental was booked that was too expensive. This preliminary discussion increases the chance that people will stand by their financial commitment. Everyone had a chance to express their maximum dollar amount without the pressure of a bill hanging over their heads.

This is a good time to bring up the option of buying trip cancellation insurance. It will pad your bill by 5% or maybe up to 10%, but it eases the financial sting if one or all of you need to cancel the trip. If your group is interested in the insurance, pad your initial budget to cover the expense.

Step 2. Decide Who Will Oversee Money Collection and Book the Vacation Rental

When you rent a house or condo for your vacation, the booking system will need a single point of contact for payment. Booking systems aren’t set up for multiple people to go in and pay parts of the bill to secure the reservation.

Normally, somebody will want to put the whole bill on his or her credit card to get all of the reward points. This person does not necessarily need to be in charge of coordinating the money collection. Another individual could collect the funds and release them to the person who wants to put the rental on his or her credit card.

Step 3. Pick a Communication Method

Communication is critical for avoiding misunderstandings. Your group needs to choose a centralized way to communicate. How you go about this is up to you. There are many options. Almost any messenger app with group chat will do. A private Facebook group for the purpose of discussing the trip would also work. The point is that all pertinent information needs to be written and shared in a place where every participant can see it.

The first message for the group should include details like:

  • Names of people sharing the rental
  • Amount owed by each person
  • Deadline for paying share of rental fees
  • Rules for removing or replacing people who do not pay

As planning moves forward, you can add the exact address of the chosen vacation rental, the final cost including taxes and fees, and rules for staying at the vacation rental.

You may want to create a Google sheet that can be updated and shared within the group chat. On the sheet, the payment coordinator can mark off each person who pays. Each time that a payment comes in, the coordinator can update the Google sheet and send a message to the group. This gives the people who paid confirmation that payment was received. It also circulates among group members the names of those who have not paid. This is an easy way to exert some social pressure to comply.

Step 4. Set Clear Rules and Expectations

The first rule to establish is your method for dividing the cost of renting the home. The most straightforward method is to divide the rent by the number of adults going on the trip. If the house rents for $2,000 a week and six adults are going, then each would contribute $333.33 (2000/6).

The issue gets trickier when children are involved because the kids can’t put in hundreds of dollars. Their parents will have to pay their share of cost. In this case, it might be easier to divide the rent by how many beds or bedrooms are being used.

For example, two parents, two children, and two grandparents are renting a three bedroom house. The parents and children will use two bedrooms and the grandparents one bedroom. In that case, the parents will pay two-thirds of the rent and the grandparents one-third.

Determining how to split the rent needs to be part of your preliminary discussions so that the final decision can be written clearly for all to see.

Your next major consideration is how to handle people who want to share the rental after everyone has paid. This can happen if a single person decides to bring a boyfriend or girlfriend last minute. The person may have paid for a bedroom and intends to share it with someone who has not paid. Another scenario could occur where a friend tags along and sleeps on a couch or hide-a-bed that no one was going to use.

What your group needs to decide is if you will allow extra people to get a free ride. Is this OK with everyone, or should the newcomers be expected to pay a share of the rent?

Also think about whether your group wants to let anyone be invited to the rental home that was not on the original list. Some people may not be comfortable with staying with someone’s random boyfriend or girlfriend or kids.

Step 5: Book a Vacation Rental

Secure your booking in the desired location for the budget that everyone agreed to.

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Step 6: Collect the Money

Share the booking details and exact costs with your group. Give out the exact dollar amount everyone needs to contribute. The person whose credit card paid for the rental should then receive the contributions. If someone paid in advance and needs a small refund now that you know the exact costs, return the change.

You have many options for collecting the money. People can send money through their phone payment apps or hand you cash. Venmo comes to mind.

There are several services available that help groups collect money for their trips. You may want to look into using one. These are useful because they include tools for sending individual invoices, tracking payments, and keeping everything transparent for the group. The fees for the tool might be worth it in terms of making things easy and staying organized.

Tools for Collecting Money for Your Group Trip

These apps focus on gathering payments from multiple people to reimburse someone. The tools let you send text messages and emails with links that enable payment by credit card or other online funds. You might find the apps useful during your trip to help your group split up payments for dining out and sightseeing. But you may also just use the tool to manage the vacation rental cost and let everyone handle their own expenses day-to-day.

Collctiv Group Payments

Cheddar Up

Splitwise

What If I Pay for the Vacation Rental and Some People Don’t Pay Their Share?

Someone who does not pay should not get to stay at the group’s vacation rental. From the outset, your group should have made the rule that nonpayment means nonparticipation.

Your options when missing one or more payments from group members are:

  • Cancel the stay at the rental house
  • Replace the missing people if possible or desirable
  • The remaining group members split the outstanding balance and stay at the rental house

You do not want people who flake out about paying for the vacation rental to accompany you. How are you going to have fun with a freeloader right in front of your eyes the whole time?

Of course, within friend and family groups there is a high chance that the closeness of the relationship will be leveraged to get people to ignore the nonpayment. Promises of future payment will be offered, or a friend wants to bring the nonpaying friend because that person is considered fun to hang out with. It’s certainly a thing that nonpaying people sometimes skate along on their charisma instead of their wallets, but someone has to be pretty fun for you to eat hundreds of dollars sheltering them for a long weekend.

As a final thought about how to collect money from a group for a vacation rental, choose your group members wisely. A group of conscientious people who value their relationships with each other will be more likely to pay their fair share. Don’t be too quick to put a vacation rental on your credit card unless you are confident about the character of the travel companions you are expecting to reimburse you.

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This post first appeared on Move Travel Home, please read the originial post: here

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