As an owner working with a professional short stay property management company like ours, you may have heard the term trust account mentioned when discussing rental payments and financial management. Trust Accounts for Holiday and Short Stay Rentals are a critical part of how we handle guest payments and disburse funds to you in a compliant and transparent way. Below, we break down what a trust account is, why it’s essential, and why managing one can be quite complex.
What is a Trust Account?
A trust account is a legally required bank account where we hold rental income on behalf of property owners. It keeps your rental earnings secure and separate from our business funds. This structure ensures full compliance with real estate trust accounting laws and prevents the misuse of funds.
Why Do We Use a Trust Account?
Trust accounts are essential for protecting owners like you, ensuring transparency, and complying with government regulations.
Key Benefits of trust accounts:
✔ Legal Protection – Trust accounts operate under strict real estate laws. These can be found at Fair Trading
✔ Owner Security – Your rental income remains safe, even if the business faces financial trouble.
✔ Transparent Accounting – Every transaction is recorded, providing clear financial tracking.
At Lakeshores Accommodation, we manage your rental income with precision so you can enjoy stress-free property ownership.
How Trust Accounts for Holiday & Short Stay Rentals Work
1. Owner Journal: Tracking Rental Income & Expenses
The owner journal records:
✔ Guest accommodation payments
✔ Regular disbursements to you
✔ Expenses like cleaning, linen, and maintenance
How Invoices Affect Your Journal
- When a guest books, their payment credits to the guest’s own journal
- These funds are transferred from the guest journal to your owner journal. (along with other journals)
- Cleaning and linen costs, and other booking expenses are deduct from the journal before we disburse funds to you.
- If an owner stay requires cleaning or linen, or there are some invoices to pay, we deduct these charges before transferring remaining funds to your bank account at the end of the month
📌 If rental income is low, keeping a contingency fund ensures a smooth operations.
2. Contingency Journal: A Safety Net for Expenses
The contingency journal holds a buffer fund for unexpected property expenses. Some owners keep a balance of $500–$1,000 to cover:
✔ Cleaning & linen for personal stays
✔ Emergency maintenance & repairs
✔ Unexpected expenses when rental income is low
When Do We Use Contingency Funds?
- If your owner journal lacks funds for an invoice, we deduct from your contingency balance.
- If neither journal has funds, we issue an outstanding balance notice for you to pay.
booking and maintenance costs for Holiday & Short Stay Rentals
Owner Stay Cleaning & Linen Fees
Even for personal stays, professional cleaning ensures consistency and high guest standards. Cleaning and linen costs will:
✔ Deduct from your owner journal if funds are available.
✔ Use the contingency fund if rental earnings are low.
✔ Show as an outstanding balance if neither journal has funds.
Related: How We Maintain 5-Star Cleaning Standards
Maintenance & Emergency Repairs
When a repair is needed, we check available funds:
✔ Owner journal pays if rental income covers the cost.
✔ Contingency journal covers the expense if needed.
✔ If both are empty, we request direct payment from you.
We recommend keeping a contingency balance to avoid service delays.
What Happens If an Invoice Is Unpaid?
If an expense is due but no funds are available in either journal:
- We notify you of the outstanding balance.
- Payments must be settled before the next disbursement.
- For a hassle-free experience, set aside a contingency balance.
Final Takeaways for Owners
✔ Your owner journal tracks all rental income & deductions
✔ A contingency fund ensures smooth handling of property expenses
✔ Cleaning & maintenance costs automatically deduct before disbursement
✔ Outstanding balances must be settled before rental payouts
Managing Trust Accounts for Holiday and Short Stay Rentals is complex, but we handle everything so you can focus on earning passive income. Want to check your account balance or update settings?
Our owners can Log into their owner portal.