If you’ve used peer-to-peer rental sites before, you know they are an exciting, cost-effective way to stay in a new city. With millions of listings on websites such as Airbnb, Couchsurfing and VRBO, travelers around the world are taking advantage of the new sharing economy. More and more travelers are searching for lodging on these sites, meaning hosts and their spare rooms are in high demand. If you have a spare bedroom or couch and are considering hosting guests, check out the pros and cons listed below first.
Reasons to Consider Hosting
One of the biggest incentives for renting out your space is the extra income you could be making. If you have additional space you aren’t using, you can help cover the cost of your rent or mortgage or even cover them entirely. On average, hosts can expect to cover 81% of their monthly rent or mortgage by renting out one bedroom in a two-bedroom house or apartment full-time. Of course, if you host someone via Couchsurfing, you won’t make any money, but there are many more benefits to hosting besides the potential additional income.
With these sites, you decide when guests can stay with you and for how long, giving you the flexibility to make this venture a steady business or an occasional occurrence. Individuals request to stay with you, then you make the decision to reject them or accept them as guests in general and approve or turn down the days they request to stay with you. You can screen prospective guests by asking questions about them and their plans for their stay, helping to ease the anxiety associated with having someone you don’t know staying at your home. Sites such as Airbnb allow potential guests to link their Facebook page to their account, which lets you investigate them further.
Renting out your space has the potential to connect you with tons of new people from cities around the world. Particularly with Couchsurfing, where you can offer your space for free, it’s almost expected that the guest will share a bit of their culture with you. You might not be able to travel around the world yourself, but you can have small pieces of the world come to you.
At the same time, you’re able to share your own city’s culture. Showing off your city might give you a new appreciation for where you’re living and where you came from. I hosted several people free of charge at my flat in London, England, when I lived there, and I learned a lot about various cultures. I loved showing my guests my favorite non-touristy spots and telling them what I knew about the city. Several times, they offered to pay for dinner or cook for a night, and some even brought gifts! While I was doing them a favor, I sincerely enjoyed the experience.
Many of these websites boast stories about hosts and guests who have formed lifelong friendships. Oftentimes, guests are looking for a local to give them tips or show them around, allowing you to get to know them and influence their travel experience. If you keep in touch with them, one day they could return the favor – by allowing you to stay with them.
What You Need to Consider
Depending on your city and state, there may be regulations affecting whether you can rent out your space and for how long. For example, the New York Multiple Dwelling Law § 4(8)(a) states that “Class A” multiple dwellings, meaning residential apartments with at least three apartments, should only be used for “permanent residence purposes” and be occupied “by the same natural person or family for thirty consecutive days or more.” Because of this, some listings on Airbnb are actually illegal. If you illegally list your space, you could be looking at a large fine, so be careful to check your local regulations first. You also might need to get permission from your landlord if you have one, as you could be breaching your contract by renting out space. You definitely don’t want to lose your rental just to earn a few extra bucks.
Taxes and Fees
Depending on where you live, you might need to pay additional taxes, which will decrease your total profit. And you might be subjected to a fee assessed by your city. For example, the city of Grand Rapids, Mich., charges a one-time $280 license fee for any host who rents out a room. Before the law passed, hosts were forced to pay the $2,000 fee that a traditional bed and breakfast is subject to. After taxes, fees, cleaning costs and the time it takes to ensure that you’re adhering to regulations, you might find that the income you would be making isn’t enough to justify all the work associated with hosting guests. So be sure to check any applicable fees and taxes prior to hosting. Taxes and fees might be high, but they might not be. Judging by the testimonials on VRBO’s website, many people have found the fees associated with hosting to be manageable and were able to recoup the cost of the fees as well as make substantial revenue with little trouble.
Risk of Damage
The risk that your property or personal items might be damaged by your guests is definitely something to consider up front. Accidents happen, and individuals might not be as careful with your belongings as they would be with their own. Some websites allow you to review references or ratings for guests who have used the site before. For example, Airbnb allows hosts and guests to rate one another and discuss their experiences. This can help you vet your guests before you rent your space out to them. Individuals interested in renting can also send you direct messages telling you about themselves. You can decide if you want to rent to someone who is quiet and just wants a place to spend the night or someone a little more lively who wants to go out in the evening. This is not to say you will know everything about your guest or that accidents won’t happen, but it may help to set your mind at ease.
It is imperative that you understand your insurance coverage beforehand, as many homeowners insurance policies don’t cover damage sustained as a result of short-term renting. Certain websites have policies in place to compensate renters for any damage that might occur, though. For example, Airbnb offers its Host Guarantee at no additional cost: If your property is damaged, Airbnb will reimburse you for the cost of repairs, up to $1 million. Certain exclusions apply, so it’s essential for your homeowners insurance to cover you as well. You also have the option of requiring that guests leave a security deposit that covers small amounts of damage and wear and tear, such as a carpet stain or a broken glass.
With hundreds of thousands of Airbnb, Couchsurfing and VRBO hosts around the world, it’s clear that many individuals feel that hosting has more benefits than risks. Whether you’re in it for the money, the friendship or just a new experience, hosting someone new can be just as rewarding for you as it is for your guests.
Do you have experience hosting guests through one of these websites? Comment and tell us how it went!
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