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EFFECTIVE LEGAL GUIDANCE FOR FAMILIES AND BUSINESSES

Picking a platform for short term rentals

| Aug 28, 2020 | Real Estate |

It has become commonplace for property owners to occasionally or regularly rent out their property using a website. Gone are the days where rentals of a brick and mortar property were handled by the owner or a brick and mortar management company. Now Airbnb and VRBO have taken over the marketing of the property and payment for the rental. There are other smaller digital options, but these two are the standard, particularly for those comfortable with booking vacation stays online.

A little background

VRBO was founded in 1995 as Vacation Rental By Owner and is now owned by Expedia. It features 2 million listings in 190 countries. Airbnb launched in 2008 and now features 7 million listings in 220 countries. Both position themselves as an alternative to staying at a resort or hotel and have many of the same services.

How they are different

Owners can weigh the differences to determine the best fit for their property. If neither sounds right, Colorado has plenty of brick and mortar or online boutique options. Notable differences between the two include:

  • Types of property: Airbnb tends to offer more unique rentals, like a yurt in the mountains or a castle in Ireland, and offers room rentals in apartments. VRBO is a more typical vacation home rentals with no shared living space.
  • Fee structure: Airbnb charges 3% on completed bookings and 14.2% service fee for bookings but does not charge a listing fee. VRBO charges between 6% and 12% fee for bookings.  It has two listing fee models: A $500 annual subscription, or 5% commission and a 3% fee for credit card processing.
  • Cancelation: VRBO has five policy options with a two-weeks before scheduled check-in minimum for a full refund. Airbnb has three different policies with a minimum 24-hours before check-in for a full refund.
  • Guests: VRBO tends to attract families looking for a traditional vacation getaway at a tourist destination. Airbnb’s flexibility and style attract a younger clientele looking for a cheaper stay or a more adventurous travel experience.

Legal considerations part of the equation

There may be certain limitations dictated by homeowner associations or even municipal law. Owners or managers with questions about the legalities of renting a property should speak with a real estate attorney. These legal professionals can help explain the strengths and exposure of these platform’s rental agreements as well as what works best for a property. They can also step in if there is a dispute involving the rental agreement or the rental property.