Vacation Rentals - The Failing Industry

Since at least 2004, the vacation rental business has been growing at exceedingly rapid rates

. Vacation rental listing sites, property management companies, and even free websites are being developed and overrun by this popular emerging business. An increasing amount of individual owners are attempting to empower themselves by actively managing and operating their investment property as a vacation rental. The economic recession of 2008 - 2010 has proven that even this massive new phenomenon is facing some serious challenges, and perhaps the largest is coming from the owners of vacation rentals themselves.

Why in the world would a homeowner rent out their investment property for $100, $75, or even $50 without considering the larger costs involved? Time involvement, wear and tear, and even security issues - does it make much sense for $350/week? But this is exactly what is occurring on advertisement sites such as Craigslist. Not only is this terrible business sense, but it is undermining the very industry principles that created their business in the first place.

Why are these types of price points dangerous? The danger lies in the fact that because this is such a deregulated industry with no formal watchdog overseeing vacation rental transactions, the legitimacy of the industry is being increasing undermined and distorted. True value-added businesses suffer at the hands of these unsavvy home owners, who are only destroying the ultimate long-term value of their home by offering these types of rates. Where does it stop? If home owners are willing to rent out their home for $50/night, then obviously a case of beer or Pizza Hut coupons would also suffice. Your bemusement at that example is exactly how I feel when I hear about a 2 bedroom/2 bathroom unit in the Gaslamp Quarter of San Diego rent for $75/night, with no required damage deposit.

But that's not the only factor which is problematic with these types of rates and declining quality of the vacation rental industry. What type of quality control is being done by these owners at such rates, advertising on Craigslist? Will the unit be clean, have all of the advertised amenities, or even be in the advertised location? As consumers, vacation rental customers must be extremely wary about finding the lowest price rather than the best value for money. "Value for money" indicates not only that the pricing is fair, but also that the entire experience is done in a professional manner, ensuring the safety of both your vacation experience and your family.

The best way to secure your vacation and to ensure that your vacation rental transaction is conducted on the highest level, renting through a vacation reservation service or property manager is the way to go. Most individual owners do not take credit card payments and operate with cash or Pay Pal only. This provides you, the renter, with zero recourse in the cash that something is amiss. Why take that risk, especially when it is during your precious vacation time? A professional service will take the worrying out of the booking experience, leaving you with the confidence to enjoy your vacation to the fullest.

Without the open interaction between all of parties, renting a vacation rental from anyone other than a reputable online company or a property manger is risky business. Until the formalization of the industry re-occurs and the wild west attitudes of the individual homeowners cease, the vacation rental industry is in danger of losing value fast.

by: Charles Tipper

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