With the proliferation of vacation rental sites like Airbnb, HomeAway and TripAdvisor Vacation Rentals, you’ve probably tried, or at least toyed with the idea of, staying in someone else’s home. After all, with competitive pricing and more space and amenities than you would expect at a standard hotel, it’s easy to see why the key players in the vacation rental industry lure those seeking affordable, off-the-beaten path accommodations. In fact, Airbnb now offers more lodging options than heavyweights like Marriott, InterContinental and Hilton.
Yet, for all the advantages that vacation rental sites can offer, there are also a string of caveats and nightmarish tales that have left would-be guests wondering whether branching into the vacation rental market is a smart choice. “We’ve all heard horror stories,” says Kris Getzie, founder of Volo Vantage, a hospitality consulting firm. She suggests finding a vacation owner who does not “view the homes in their fleet as a commodity” but rather “actively engage[s] guests to experiences beyond what they could have thought up themselves.” With this in mind, U.S. News solicited advice from top experts for spotting common scams and smart steps guests and hosts can take to maximize safety and comfort.
Red Flag No 1: Sketchy Payment Sites
“Firstly, customers should always book through a secure service,” says Jeff Mosler, chief services officer at HomeAway. If a host suggests communicating off the official vacation rental platform, that could also be a bad sign, he says, especially if they are offering a service or product that isn’t available through the rental vacation provider. It’s also important to trust your instincts and ensure you use a safe payment method, he says, pointing to the HomeAway Payments system, which allows you to pay with major credit cards and ensures automatic coverage of up to $10,000.
And according to TripAdvisor Vacation Rentals spokesperson Laurel Greatrix, another major tell is being asked to pay through an instant wire service or bank. Instructions to pay a wire transfer to the bank account of a vacation rental site, such as TripAdvisor, FlipKey or Holiday Lettings, could be a scheme, she says. “We’ll never ask you to do this,” she explains. “If you pay through us, payment is taken through our online systems, never by bank or wire transfers.” Greatrix advises booking through the TripAdvisor Vacation Rentals’ payment platform to be automatically ensured with Peace of Mind coverage, a protection that insures the payment is not sent to the homeowner until a day after a guest has checked in for his or her stay. “Paying online and protecting your payment is the safest, securest way to pay,” she adds.
Airbnb advises guests to connect with hosts through their website to prevent phishing scams and help protect you from fraud and other risks. By paying through the platform, you can help secure your personal information, and you can rest assured that your booking will be covered by the site’s cancellation policies. Plus, interacting online allows hosts to be covered by the site’s Host Protection Insurance program .
Red Flag No. 2: Limited or No Reviews
“If the listing ad just seems too good to be true and there aren’t any reviews, I recommend to do a cross-search on various sites to be sure someone didn’t copy the listing as a scam,” Getzie says. She also recommends calling the prospective host as a safeguard for a faulty listing or unreliable property manager.
Mosler suggests calling the homeowner on the listing site as well as conducting a quick Google search or social media search of the prospective host to ensure a trustworthy experience before providing payment. He says reading traveler reviews can also be helpful. “With the Wild West nature of the Internet, sometimes fraudsters go to a third-party site like Craigslist,” he cautions. For homeowners concerned about fraudulent activity, he recommends counteracting scams with sites like TinEye.com, a search engine that allows you to input a property image and then directs you to where the image can be found on the Web.
Airbnb also recommends that guests protect themselves by asking for references, reading traveler-submitted reviews from Airbnb guests and looking to see that host profile pages display a verified ID badge. These IDs are issued by Airbnb after a user or host connects personal social networks, confirms personal information or supplies an official ID.
Red Flag No. 3: Shady Rental Agreement
When it comes to identifying vacation rental contract loopholes, “there can be many and they can be varied,” Getzie says. A smart way to ensure you’re covered if you’re a property owner is to get in touch with an attorney licensed in the jurisdiction of your vacation rental, she says. And as for guests, she says the key is obtaining a short-term rental agreement that comes in the form of a booking confirmation or lease if you’re communication directly with a property owner. She also suggests carefully reviewing the contract. “If you are booking through a vacation rental site, review the owner’s uploaded rental agreement, and the site’s dictated cancellation policy, as both will help [you] understand potential issues,” she cautions. She also suggests that vacation owners purchase insurance either directly through the vacation rental site or on their own, pointing to an emergency like frozen water pipes as a potential issue you’ll want to have covered by your policy.
Greatrix also says that while booking contracts can vary, if key components are lacking, like arrival and check-out times and cancellation policies, it be an indication of suspicious activity. And according the Mosler, in a good contract, typically the payment terms, including the security deposit and cancellation policies, along with the types of amenities, are clearly outlined.
Red Flag No. 4: Suspicious Rules or Restrictions
It’s also important to keep in mind that “not all cities allow nightly rentals, and others require business licenses to operate,” Getzie says. “And any [municipality] has the authority to shut down an illegally run business, if a guest is staying there or not (potentially leaving you without accommodations),” she adds. To ensure your prospective vacation rental is in fact legal, Getzie says it’s a smart idea to conduct a Google search on the short-term and vacation rental as well as transient rental licenses available in your desired destination. “And by all means, ask the owner/operator if they have a current business license if they are required,” she adds.
“Rules and regulations can vary considerably from city to city, state to state and country to country,” Greatrix explains. She suggests doing your homework and understanding the varied requirements across the U.S. by visiting the Short Term Rental Advocacy Center website, which offers regulations for short-term destinations in a variety of locations.
On Airbnb’s site, you can navigate to a “Your City’s Regulations” section, but not all cities are listed. Conducting your own research is especially critical if you’re planning on traveling to an unfamiliar destination or visiting somewhere overseas. Doing so empowers you to understand individual regulations by town, city, country and state, as there are different tax regulations, zoning restrictions, safety and health standards and licenses required.
Red Flag No. 5: Request for a Wire Transfer, Expedited Payment or a Discount
If a property owner or vacation rental site asks for a wired or international transfer, that’s a major red flag, Mosler says. A request for a discounted payment or expedited payment could also be a telltale sign of a scam, he adds.
Another suspect behavior to flag: a request to pay the full amount too early, Greatrix says. “You shouldn’t be asked to pay the security deposit (usually up to 25 percent of the total booking) and settle the full cost of the rental until about eight weeks before your vacation,” she explains. And if there’s a switch in the email address of the person you’ve been communicating with during the booking process, that’s another clue of a possible scam, she adds.