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Vacation Rentals: Navigating Timeshares as a Senior Citizen

Nov. 13, 2012
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A few years ago, Brian Chesky and Joe Gebbia had an idea: rent out space in their San Francisco loft for a few days here and there to help pay the rent. It worked. Then they had a more profitable notion: create an online clearing-house to help other folks do the same thing. Vacationers liked the idea. Investors did too, and the company, called airbnb, grew exponentially. Other apartment owners liked the extra money it generated. Some even rented additional apartments to turn them into airbnb dormitories. Landlords didn’t really go for the idea, but it took them awhile to hear about it. When they did, some of them decided to get into the game themselves. Neighbors often didn’t appreciate the extra traffic, however, and the whole thing was unavoidably an end run around all sorts of city laws and zoning regulations – not to mention everybody’s insurance.

But on the whole it worked – and worked well for a lot of people.

Then the bad guys got the idea. A woman in San Francisco came home to find her place ransacked and her identity stolen. A guy in Oakland returned to find meth pipes and his personal information strewn about, and “thousands of dollars” of damage done to his apartment. The staff at airbnb, which insist they have facilitated two million rentals without incident, were caught off guard, and the two high-profile cases from last year still don’t seem to have been handled to the satisfaction of the apartment owners. Since most people’s insurance wouldn’t cover renters starting a small B&B on the side, airbnb announced a $50,000 Lloyd’s of London “Host Guarantee” (they stress it’s not insurance) which they subsequently bumped to a million dollars. It covers damage to the apartment, but not such things as cash and securities, jewelry and pets. First, however, you have to try to recoup the damages from the guest – and your homeowners’ insurance.

There are a number of companies working the same side of the street now, each with their own set of rules, fees, and safeguards. Airbnb is arguably the most full-service site, since their version of “facilitating” the transaction involves positioning themselves between host and renter (while getting fees from both) and withholding rent from the host until 24 hours have passed and the renter is satisfied with the place. Other sites such as homeaway, flipkey, and rentmyplace serve more as online bulletin boards, although some offer their own versions of user reviews and trip insurance.

Should you get into the game? At this point it seems as though the risks are mostly borne by the folks renting out the spaces; for vacationers who do their homework and don’t expect something for nothing – daily rates aren’t particularly cheap – the process can be less impersonal and more adventuresome than standard hotel fare. If you’re thinking about renting out space in your home, however, you’ll want to get comfortable with the idea that you’re basically starting a business without playing by the rules that businesses are supposed to follow. This isn’t just letting a friend crash in your extra room; it’s entering into a commercial relationship with strangers that your neighbors, your town, and your insurance company probably never envisioned.

I’m not here to tell you what you should do – or what I would do – but it’s good to think about that before you get started. And it forces you to face a number of issues that will have to be confronted sooner or later. Will your neighbors be bothered by a bunch of new faces coming and going? Would they go to the city with a complaint before they talked to you? What will your insurance company say if you make a claim related to a business they didn’t know about? Remember, you’re advertising your place in great detail online. And you’ve never met these people. Before you rent, read their profiles on whatever site you decide to deal with. Look at their pictures; study their personal information; compare addresses and phone numbers; listen to your gut. Ask questions; take your time. If you can meet with renters before they move in, all the better.

As with any rental relationship, the ideal situation is when you (or someone you know) can be on-site from time to time to keep an eye on things. If that’s not possible, you’ll want to lock up your personal papers and valuables – ideally off-site; it’s not likely, but renters have burrowed through walls to get at the good stuff. Would I do it? As a renter, sure. It sounds like a great way to meet new people and get an insider’s view of a place I want to visit. In my own home? Only if I were still nearby. As Troy Daton, who came home to find crack pipes and chaos in his Oakland apartment, said “At the end of the day you are renting to a stranger.”



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