The next time you travel, instead of a hotel, consider an experience more unique and potentially more comfortable: renting a home from a private homeowner.
The idea is simple: Instead of cramming yourself into a tiny hotel room, rent anything from a sofa to an entire house. You win by getting a lot more space and amenities for the same or a lower price. The homeowner wins by bringing in some extra cash.
While private, short-term rentals are most numerous in large cities and/or vacation destinations, the short-term rental concept has spread to many areas – where there’s a hotel, there’s a market. The economic bust has fueled growth, as homeowners teetering on the edge of foreclosure look for creative ways to make their next mortgage payment.
In fact, the business owner we interviewed in the video above, Mike Geraud of Tropical Vacations, Florida, got his start in vacation rentals because of the recession. He owned a home near the beach in Florida, and wanted to move to New Jersey. The problem: he didn’t want to sell his house for less than he’d paid for it. So he started renting it, found it to be a good solution, gathered other homeowners in similar circumstances – and a business was born.
But if you’re tempted to turn your home into a short-term rental, be aware there’s a good chance it’s not allowed by zoning or other laws where you live – and you could be shut down. New York City specifically banned the practice in July and San Francisco, which has had a ban on the books for years but never really enforced it, is thinking about it now.
The reasons? Obviously, hotels aren’t happy with the competition, nosy neighbors might complain about the all the noise and traffic, and laws designed to protect the public from unscrupulous hoteliers can’t be enforced. But with the chances of discovery slim and the money good (the house where we shot the video above rents for $3,000/week and stays rented 80% of the time) this is a business that may go underground but probably won’t go away.
If you’re a vacationer, you’ve also got some caveats, starting with this one: don’t get ripped off. The person we interviewed in the video above had just lost more than $1,000 by sending a deposit to a non-existent homeowner for a non-existent vacation home. So even on reputable sites, you’ve got to investigate any home you’re considering to the best of your ability. Check a Google Earth view of the house to make sure it’s actually there and looks like the pictures on the site. Look up the home’s owner in county property tax records, to make sure the names match, etc. And always pay with a credit card, not a cashier’s check or money order.
There are plenty of websites that hook homeowners up with short-term renters. Below are three – the one we used for the news story we did was the first one, airbnb.
Since these sites will often feature different listings, it pays to check them all. And don’t forget to do the same thing you should be doing with a hotel: negotiating to see if you can get a better price.
Sign up for our free newsletter
Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's '205 Ways to Save Money' as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.