Rent a vacation house for the price of a room
More homeowners are making extra cash by renting their properties to vacationers. But it may not be legal where you live.
The next time you travel, consider a setting that's unique and potentially more comfortable than a hotel: renting a home from a private homeowner.
The idea is simple: Instead of cramming yourself into a tiny hotel room, rent an entire house. You win by getting a lot more space and amenities for a similar price. The homeowner wins by bringing in 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.
Check out one super-deluxe Florida vacation rental in the following news story, then meet me on the other side for more.
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.
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 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 a 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 also have some caveats, starting with this one: Don't get ripped off. The person we interviewed in the video above had lost more than $1,000 by sending a deposit to a nonexistent homeowner for a nonexistent vacation home. So even on reputable sites, you've got to investigate any home you're considering to the best of your ability. For instance:
- Check a Google Earth view of the house to make sure it's actually there and looks like the pictures on the website.
- Look up the home's owner in county property tax records, to make sure the names match.
- Always pay with a credit card, not a cashier's check or money order.
Plenty of websites 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.
Because 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.
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