"Home swapping" and "couch surfing" are short-term rental situations. Their popularity has grown in recent years, aided by the Internet and a tight economy. Renters get cheap accommodations and "landlords" can earn a few extra dollars each month. But there are some drawbacks. In some states, these informal arrangements are illegal. Plus, insurance doesn't always cover the homeowners when things go wrong.
Short-Term Rentals and Home Swapping
Short-term rentals usually involve vacations or travel. Someone needs accommodations for a limited period of time while away from home. These rentals are sometimes called "illegal hotels" because they serve a purpose similar to hotels.
Home-swapping usually means families exchange their homes for a week or two. A family in Miami might want to vacation in San Francisco, and a family in San Francisco might want to visit Miami. They spend their vacations in each other's homes, free of charge and saving expensive motel rates. Such exchanges don't always take place simultaneously.
What Is Couch Surfing?
Couch surfing is a short-term version of home swapping. Money isn't usually involved, and it's not necessary for the owner to move out. Surfers occupy a spare room, or even just a sofa, for a few nights. They could also agree to an exchange similar to home swapping.
Short-Term Rentals May Be Illegal
Unlike home swapping or couch surfing, short-term rentals involve moving out of your home for a few days or weeks so someone else can live there. It can break various rules and laws. In New York, it's illegal for a homeowner to rent for a period shorter than 30 days.
If you're a renter, not a homeowner, you could get in trouble with your landlord. Some leases include rules against subletting dwellings, and short-term rentals are a form of subletting. Some leases prohibit roommates, and couch surfers are temporary roommates.
Homeowners May Be Liable
Homeowners insurance may not cover damage to your property from a short-term tenant, and it might not cover any harm that comes to a short-term tenant while living in your home. You might need to add extra riders or provisions to your policy to cover these things. Some insurers may require a whole separate policy.
Homeowners May Be Taxed
Money you receive from a couch-surfer or short-term rental counts as income on your tax return. Some cities, such as San Francisco, are considering taxing homeowners who home swap or engage in the illegal hotel business just as they tax hotels, motels, and inns.