If you’ve thought about renting property on vacation, keep in mind that it’s become a lot easier – and in some ways, harder.
Much of the vacation rental process has moved online, making the process simpler and more accessible. Also, the so-called “sharing economy” has allowed more people in the lodging business renting rooms and dwellings. In fact, a 2015 study by consulting firm EY notes that in one year alone, the world’s dominant online room-sharing company – less than 10 years old – added more listings to its inventory than the largest global hotel companies added rooms during the same period.
So vacation rentals are easier than ever, right? Possibly, but you still need to protect your money against disappointing choices and possible fraud. Before committing to any kind of property rental or property-sharing vacation, do your homework. Here are five tips to get started:
1. Evaluate your destination fully. The busiest tourist destinations generally have the broadest range of lodging options – from luxury hotels to hostels. Vacation rentals are usually a happy medium, located in desirable neighborhoods with a homey feel and kitchen availability that can make a stay a lot cheaper. However, every destination has certain ways of handling vacation rentals. While the newer generation of property-sharing companies might be active here, evaluate traditional options like vacation property brokers and listing services to compare prices and offerings. Also, search the name and address of the vacation property you’re considering with the words “vacation rental scam” to see if any indication of fraud, crime or other trouble turns up.
2. Check local short-term rental laws. While it’s generally easier to do this domestically than abroad, make sure the kind of vacation rental you’re considering is legal. Check recent news clips or contact a local tourism bureau or chamber of commerce to see whether your target municipality doesn’t have legal or zoning restrictions on your chosen rental.
3. Verify the renter personally and with local experts and agencies. If your renter is reputable, he or she should be more than willing to have a detailed conversation about the property, costs, financial arrangements and onsite rules – including deadbolt locks you can control if you are renting rooms within their residence. Make time to call the local tourism bureau, chamber of commerce, or the local chapter of the Better Business Bureau (http://www.bbb.org)
4. Ask for any details about the renter or the property. Ask the renter for referrals from previous renters, if possible, and consider the Federal Trade Commission’s (FTC) Scam Watch travel page (https://www.consumer.ftc.gov/taxonomy/term/877 ) for extensive updated advice on renting out-of-town property.
5. Ask for all completed agreements and liability insurance documentation before paying. Before you reserve, ask to see all contract information with pricing and scheduling information filled in as well as proof of insurance on the rental property. You should understand all payment and property rules affecting your stay and what might happen if there is accidental damage to the property while you’re there. Share these documents with your home or rental insurer for input before you sign. If a renter hesitates to share this information, you might want to consider other options. Also, review your personal health, property and liability coverage to make sure you’re protected during the trip.
6. Weigh all spending risks of the rental transaction. If you’re planning to rent vacation property, take the extra step of calling your credit card and travel insurance companies to determine whether they offer any particular protections in case something goes wrong with the rental. It’s a good way to review the full range of protection available to you on any out-of-town trip. And if a vacation landlord asks for advance cash payment – particularly wired money – be very cautious. Many travel scams begin with wired cash.
Bottom line: Planning an upcoming vacation? Before you commit to a vacation rental, vet the owner and the property thoroughly.
Nathaniel Sillin directs Visa’s financial education programs. To follow Practical Money Skills on Twitter: www.twitter.com/PracticalMoney.