Business Idea: clearing house for locals who offer rooms to rent

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greyswan's picture
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We live in a town with lots of older homes who have rooms to rent or potential for rentals.   My idea is to be a clearing house for them, a matchmaker of sorts.  I would be one of the resources for the homeowners - I would list a generic category on my website and refer people to them on calls for stays longer than we provide (2 weeks).  I would charge a finders fee or a percentage of the rental fee.  That would cover my advertising costs. 

Is anyone else doing that?  Are there any liabilities that I am setting myself up for?  I'd like to get your thoughts on this.  Thanks in advance!

greyswan's picture
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good points... and yes, a fun read

 

greyswan's picture
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thanks for all your responses - liability issues was one of my big thoughts.  I know a couple of people at city hall - I'll have to check with them about the regs for renters/taxes/regs.  Fair housing rules come to mind, too... I want to talk to a realtor here that handles rentals and a landlord friend.  thanks again

egoodell's picture
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greyswan wrote:

thanks for all your responses - liability issues was one of my big thoughts.  I know a couple of people at city hall - I'll have to check with them about the regs for renters/taxes/regs.  Fair housing rules come to mind, too... I want to talk to a realtor here that handles rentals and a landlord friend.  thanks again

check with the fire marshal too. The illegal rentals here don't have any equipment and the renal company does not have them get inspections. In our county they should have a fire extinguisher in the bedroom and common areas and a sign showing how to get out in case of fire.

RIki

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gillumhouse's picture
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The illegal rentals here don't have any equipment and the renal company does not have them get inspections

Thanks for the chuckle. They probably have internal fire extinguishers.

egoodell's picture
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gillumhouse wrote:

The illegal rentals here don't have any equipment and the renal company does not have them get inspections

Thanks for the chuckle. They probably have internal fire extinguishers.

oooops! 

RIki

egoodell's picture
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 I would be careful. I imagine these folks will not get the insurance for renting rooms, and most home insurance will NOT cover renting a room. And I will bet they are not planning to pay your local lodging tax or the state and federal taxes as well. Places like that here make the visitors pay in cash so you know they are not declaring the income.

RIki

Arks's picture
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I'd say you just need to do some homework. Many people think about liability issues, and just forget it. But it may be just a part of doing business and not insurmountable. A good full service independent insurance agent can make almost anything do-able though Lloyd's of London or a similar carrier. We used to run a nursery/greenhouse and NOBODY around here would insure such a thing. We finally got a very reasonable policy through Lloyd's and everything went fine.

If what you're planning looks like it will pay the costs of getting set up, go for it.

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They do that in Texas in some of the tourist areas - Fredericksburg, Salado come to mind.  I'm sure that you'd have to have additional insurance and all of that.  They are run as a separate entity, not as something attached to a specific B&B.   You might want to consider that as a separate business to keep your B&B apart from a reservation-type service.  Just some thoughts off the top of my head....

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Proud Texan's picture
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Samster wrote:

They do that in Texas in some of the tourist areas - Fredericksburg, Salado come to mind.  I'm sure that you'd have to have additional insurance and all of that.  They are run as a separate entity, not as something attached to a specific B&B.   You might want to consider that as a separate business to keep your B&B apart from a reservation-type service.  Just some thoughts off the top of my head....

The outfit in Fredericksburg,  is ONLY a clearing house.   Nearly every building there is some sort of guest accommodation.   Trying to run a B&B and do the other would be a headache without much benefit.

The last two time we went to Fredericksburg, the clearing house put us in "no host" "no breakfast" houses that were filthy.   There are a lot of good B&Bs in Fredericksburg, but you'd do better screening them yourself.

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GS, I had thought of that myself - several times but then the liability issues keep popping up in my thoughts and I back down.  I good thought, just comes with plenty of possible headaches on both sides of the issue and not worth the token change you would get as a finder's fee. 

Joey Camb's picture
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every now and again we get people here (for example we have an american base up the road and people often need rental properties) am happy to give advice or hand out phone numbers of people looking to rent places if I know of any or sometimes people with self catering places (vacation rentals) will rent them for a cheap price in the quieter months as if you need somewhere for say 3 months its very difficult to stay in a B&B but I don't do it as an offical service as its too much trouble to keep on top of all the avaliabity. One of the problems here is that the demand for rooms to rent outstrips supply.

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 I would be careful on this one.  So you want to set up a reservation service?

1. What are the zoning regs in your location for "renting" rooms?  

2. Liablitly for you ???

3. Sounds like alot of work..what will you get from it??  A % from the booking?

4. Will you be the person they call if there are problems? 

 

Gosh I can think of all sorts of reasons I would not want to get involved in this sort of thing unless you get a lawyer to do some kind of contracts for you so that it is VERY CLEAR who does what, who is responsible etc.  Sounds like something the Visitor Center in your area should handle. Or, do these people want to do it under the table?  A no no...they must pay their fair share to room tax etc. 

Proud Texan's picture
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 Been there. Done that.   Red Handed Jill is right.  The owners would have to take out liability insurance, which costs THEM.  

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I am certain our particular insurance carrier would take issues with that. :-/ YMMV, but you may want to check with your agent...

Arks's picture
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Don't you have a local tourist information office? That seems like the local ones to serve as clearning house for tourist accommodations.

Off the subject, I have always loved your dog with glasses avatar. Don't know why, but I always love seeing it. You could have used a grey swan, but the dog is much better!

Madeleine's picture
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Neat idea. I think it's called 'Air BNB' or 'Couchsurfing'. Eye-wink

Seriously, I would consider how being the middleman makes you in any way responsible for anything that goes wrong. Damage to the room or home the guest stays in; assaults on either guests or homeowners; loss of income if guests don't show. Long term rentals might also include evicting non-payers or abusive guests who now have 'rights' to stay put. Not that this is your issue, but it could become if someone thinks you steered them a bum 'tenant'.

A guest who shows up to no place to stay because the home owner is a flake would contact you as where they found the property. You should take a look at the airbnb website to see what they do to protect themselves.

Essentially, would you need to be insured as the middleman for the same things you insure your own business for? I don't know the answer. But I do know if anyone has cause to sue for anything they will go after all entities that had anything to do with the rental.

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We'll for nightly/weekly vacation rentals there is Airbnb.com. A very big company. But it sounds like you're talking more about long-term rentals? Not sure if there is anything for that, could be a good idea.

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