How to determine a rental deposit?
By Olof Kernell • November 25, 2025
A security deposit is an important part of the rental process and benefits both landlords and tenants. For landlords, it provides protection against potential damage or unpaid rent, while tenants can get their money back if everything is in order at the end of the rental period. In this article, we explain the factors that influence the size of a security deposit and how Guestit can help simplify the process.
Quote:
"Clearly communicating the terms of the deposit reduces the risk of misunderstandings and builds trust between both parties."
"Clearly communicating the terms of the deposit reduces the risk of misunderstandings and builds trust between both parties."
The purpose of a security deposit
A security deposit is an amount paid in advance by the tenant as protection during the rental period. The purpose is to cover possible damage to the property or unpaid rent.
If the property is left in good condition and all payments have been made, the deposit is returned to the tenant. This creates security for both sides and gives tenants an incentive to take care of the property.
Deposit for short-term vs long-term rentals
The size of a security deposit can vary depending on whether the rental is short-term or long-term. For long-term rentals, it is common for the deposit to equal one or two months’ rent.
For short-term rentals, such as those done through Guestit, the deposit is often lower and adjusted to the shorter rental period. Regardless of rental length, it is important to clearly communicate the deposit amount and the conditions before signing the agreement.
Read also: What is short-term rental?
How to set a reasonable deposit
When deciding on a deposit amount, consider the following factors:
- Property condition and standard: A newly renovated or high quality home may justify a higher deposit.
- Length of the rental period: A longer rental means more wear and tear.
- Furnished or unfurnished: A furnished property may require a higher deposit to protect furniture and inventory.
- Tenant background: References and credit reports can influence the deposit amount.
Guestit handles the deposit
Guestit makes the rental process easier by managing the deposit securely. When a property is rented out through Guestit, we collect the deposit and return it according to the agreed terms after checkout.
This gives landlords protection against unexpected costs, while tenants can feel confident that the deposit is handled professionally. Clear terms and transparency at every step reduce the risk of misunderstandings and conflicts.
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