
Accepting Direct Payments As A Host

Accepting payments directly as a host has become even more important during COVID-19. If you were a host that didn’t offer refunds to guests when they couldn’t make it to your property the OTAs have penalized your listing’s rankings.
If that is you, getting guests to your property outside the OTAs is going to breathe life back into your vacation rental business.
Along with accepting direct payments, you should also look for ways to get more visibility.
One way is to setup your own website with branding for your vacation rental. That takes some money and time to establish but it’s well worth it.
Another alternative is to setup a listing on Houfy.
How To Accept Payments Directly As A Host
There are a bunch of online payment processors you can use. The three most popular are PayPal, Stripe and Square.
We have an account with 2 of the 3, we’ve never used Square. We do have a Stripe and PayPal account. Between PayPal and Stripe – we use PayPal more often. Paypal has a really easy interface that allows you to create invoices and more importantly for us, it was easy to setup partial payments. As far as the transaction fees they charge they are about the same.
In this post we’ll go over setting up your PayPal account and creating invoices that you send to your guests for payment. Guests can pay using either their PayPal account or a credit card.
First – Creating A PayPal Account
You’ll want to create a business account. If you don’t already have a PayPal account you’ll need to create one. Click sign up on the link below
https://www.paypal.com/us/signin
If you have a personal account, you’ll need to convert the personal account to a business account. The business account allows you to send invoices.
The business account doesn’t cost anything to setup.
Follow the Prompts
They make it really easy to setup an account, just follow the prompts and it’ll guide you through the process.
Two questions that can come up in the business account prompts.
1 – If you don’t have a legal entity setup for your property you should select Individual/Sole Proprietorship as your Business type
2 – In the Product or service keywords section use Lodging – Lodging-Hotels, Motels, Resorts, Central Reservation Services for the Describe your Business field since that seems to describe vacation rentals the closest.
Other than that the prompts are pretty self explanatory.
Once you filled out all the info, congrats! You now have a Business PayPal account!
Link Your Bank Account
Once you’ve linked your bank account, you’ll be able to transfer money to and from PayPal. You can also add a credit card to your PayPal account if you plan on using it to make payments out of it.
To link your bank account Select Pay & Get Paid on the Menu bar, then Select Banks & Cards
It’s Time To Create An Invoice
Here come the fun part… creating invoices!!
To get to the invoices page click Pay & Get Paid on the Menu bar, then select Create & Manage Invoices
That will bring you to the Manage Invoices screen.
On the Manage Invoices screen click the Create Invoice button on the upper right and you’re on your way to creating your first invoice.
Adding The Invoice Items
The invoice is pretty easy to fill out. And after you do it once, it’ll be even easier because PayPal will remember your previous entries.
In the Bill To field you can enter either the guest’s name or email address.
If you’re planning on sending the invoice directly from PayPal then it would make sense to enter the email address here.
The Line Items
Rental Amount
The first line item we enter is the rental amount, followed but additional charges (like the cleaning) then the security deposit.
For the item name we use something descriptive like:
February 7, 2020 – February 18, 2020 (11 Nights)
Then we add the tax. Click the Tax field and click + Add Tax
For the tax name we just name it Tax (I know, crazy! lol) then enter the tax rate and click add
Additional Charges
Any additional charges are treated the same as the rental amount.
If you have additional charges like cleaning, linens, hot tub fee, pool heat, etc, add a line item for each with the cost and select sales tax for each.
Adding The Security Deposit
We call the security deposit a Refundable Security Deposit on the invoice.
It’s almost like the other line items, the only difference is that we don’t apply a tax to it.
That is the basics for creating an invoice. At this point you have the bare minimums for the invoice.
Message to the customer
This is a note that is toward the bottom of the invoice when the guest opens the invoice.
If you’re going to send the invoice directly from PayPal then this is where you would put in your message to them.
We don’t send the invoice directly from Paypal, more on why later…
Terms and Conditions
Click Add terms and conditions on the bottom of the invoice to communicate your cancellation terms. Basically when they get a cancellation refund, what percentage, etc…
Adding Attachments
And lastly, under More options you can add attachments (like the lease agreement).
This is also more important if you plan on sending your invoice directly from PayPal.
Allowing Multiple Payments
To accept multiple payments click the Allow partial payment check box. On PayPal’s new interface it’s in the box to the right of the invoice, the older interface has the check box toward the bottom of the invoice. Just do a search for Allow partial payment on the invoice page and you’ll find it.
Sending The Invoice
Now that you filled in your invoice you have a couple of ways to send the invoice to the guest.
You can either:
1 – Send it directly from PayPal by clicking the Send button on the upper right (we don’t recommend this)
2 – Or you can copy the link to the invoice and send an email with the link (recommended).
To copy the invoice link, click the arrow on the right-hand side of the Send button and you’ll see the option to Share invoice url
With the dialog that opens it’s important that you DO NOT just copy the URL.
Instead click the Copy Link button, that will copy the link and save your invoice.
If you just copy the link and click done, the invoice won’t be save. Really not good.
Why Not Send The Invoice From PayPal
(And What We Do Instead)
So why not send the invoice directly from PayPal?
I mean, you totally could.
It works essentially the same way, and the guest can pay the invoice PayPal sends them without a problem.
We decided to use the copied url option instead.
We copy the url into an email along with our message and include the rental agreement as an email attachment.
Since we use an email sequence, this isn’t going to be the only email we’re sending them, and having all our messages come from a single email address just makes sense.
Additionally, the message dialog is limited in characters. They increased the limit to 4000 characters (which is a lot!) but the dialog also doesn’t support formatting.
The message dialog looks ok when there are only a couple of sentences but once you add more text in there the invoice just looks messy.
Customize The Invoice Header
You can customize the top of your invoice by adding your vacation rental’s logo, website, and phone number.
If you have any of those things setup then it makes sense to add them to your invoice.
If ya don’t have any of those things setup, ya should : )
Send that invoice out to your potential guest first, but add a house name, logo, website and seperate phone number to your to do list!
Mission Accomplished!
You now have your invoice! One thing to keep in mind is if you break up the payment PayPal will not remind you about the remaining balance.
We setup reminders in Outlook that trigger a couple of days before the balance is due.
Update, we now use our own tool to remind us when these payments are due. We may be making that tool available to others very soon!
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