As King Solomon reminds us in his Proverbs, knowledge is an essential part of wisdom. For today’s investors, that means keeping an eye on market trends and new developments that affect planning for the future. And for some property owners, the home swap — an old trend for vacationers – may be worth watching for the impact it may make on short term rentals.
For travelers and vacationers, renting a place for a short-term stay had always been an attractive alternative to staying in a hotel. But another alternative is gaining traction among money-conscious visitors: home swapping, or home exchange; a growing trend that offers a way to bypass the rental markets altogether.
Whether you want to spend a summer in the South of France or do temporary work two states away, exchanging dwellings with a like-minded individual can save lot of money – nearly $4,000 worth in an estimate provided by Love’s home Swap, a London-based home exchange service. And while those numbers may change depending on the cost of accommodations in the target area, a home swap is almost certain to be less expensive simply because it is a swap – the “rent’ paid by each party is offering the use of their own home to the other.
Home swapping isn’t new. The concept began in 1953, when teacher David Ostroff came up with the idea of swapping houses with other educators. Since then, his typed list of people willing to swap houses for summer stays and other occasions has grown to over 70 home swap clubs worldwide, with listings of dwellings half a world away or just down the street.
Membership in home exchange clubs and services comes with a price, averaging around $100 per year. That offers access to a club’s services and listings, where prospective swappers can find compatible people to swap with. That’s as far as the service goes, though – members must make contacts and work out details on their own.
Those details include things like paying utility bills and managing day to day home care during the swap, liability in case of accidents, visitors, mail and keys. Home exchanges stress that it’s essential to get all these things in writing, and some organizations offer templates and sample contracts for swappers to customize to their own needs.
Advocates of home swapping say that a swap offers just that — a home, complete with its own lived in feel and amenities, unlike an impersonal rental. Swappers step into the life of a community and a network of friends. On the downside, though, a swap depends on finding somebody compatible to swap with in a given area. Rental listings are available year round with more options to choose from. And unlike a rental house, a home exchange comes with all the owners’ personal belongings.
Though it’s growing rapidly, the home swap movement may not have much of an impact on most investors building wealth in income property as Jason Hartman recommends – unless they’re dedicated to offering short-term rentals in high-demand areas. Still, the trend toward home exchanges for both local and international stays is one worth watching in the rapidly changing real estate world. (Top image:Flickr/WillStoneburner)
Miller, Shirley. “Yes, You Can Home Swap – Si Se Puede!” HuffPost Travel. The Huffington Post, May 3, 201
Learn real estate investing in a weekend with Jason Hartman’s Meet the Masters Investing Event in Irvine, CA January 18-19, 2014. Learn more here.
The Solomon Success Team