These days, house-sharing companies have turned this alternative to hotels and short-term leases into a billion-dollar business. While some hosts simply hope to earn a little profit from their spare bedrooms, others invest in property just to use it to rent on Airbnb and similar house-sharing websites. Obviously, the online platforms that match guests with hosts fill a demand; however, not every house-sharing host has positive experiences to report. Read some stories of house-sharing rentals gone wrong to learn why you need to prepare yourself against a variety of risks.
Tales of House-Sharing Gone Wrong
Property Casualty 360, an insurance industry site for professionals, reported on the blog post of a woman who only identified herself as “EJ.” She said that she returned home to find that her Airbnb tenants have vandalized her property in multiple ways. They even broke into a locked closet to take cash, personal identification, jewelry, and electronics. As probably the least of her problems, the vandals also left her kitchen a smelly mess. After “EJ” posted the story on her blog, Airbnb did send her compensation, but she still had concerns about future damages that might arise from identify theft.
Even if tenants aren’t usually outright thieves, many don’t always adhere to the host’s expectations of house rules. You can find multiple stories of hosts who returned to their property to find blatant evidence that the home had been used for a wild, adult party. In some cases, the guests had even left traces of illegal substances.
Naturally, you should post your own house rules on your profile to try to deter guests that may hope to use your home in recreational ways that you don’t approve of. You should also clearly state your expectations for general tidiness and of course, adherence to laws. You can’t control every aspect of your guest’s behaviors, but you should put your expectations in writing.
How to Protect Your Property as a House-Sharing Host
While many larger house-sharing companies attempt to run background checks on guests, even they admit that these searches aren’t always complete and can’t uncover everything. Airbnb, for instance, advises hosts to use their online tools to learn as much as possible about their prospective guests before they choose to confirm a rental reservation.
You also need to spend some time acquainting yourself with building, neighborhood, and city rules about renting. Some cities have cracked down on these hotel alternatives for a variety of reasons, and you also risk running afoul of your property management company or community association.
What to Learn About Homeowners Insurance and House-Sharing Rentals
Finally, you can’t count on your old homeowner’s insurance policy to cover damages that paying guests might cause to your furnishings, appliances, and building. Most of these policies focus on personal property use. They strictly limit and sometimes even exclude business use from claims. Larger house-sharing sites may provide some coverage for hosts, but you should make sure you understand the limitations of these policies too. An insurer will probably ask you to upgrade your policy or buy additional insurance to protect your home while you’re renting out rooms.
If you only plan to rent your home temporarily while you’re away on vacation or during some major event, you can find some companies that offer month-to-month policies that they’ve tailored for house-sharing hosts. If you keep your rooms rented throughout the year, you may find that a more typical landlord policy suits your needs. Either way, you can speak with a homeowners insurance agent to figure out what coverage gaps that you may have and how to close those gaps sensibly and affordably.