# BNB house rental trashed



## carverman (Nov 8, 2010)

as always.if it's too good to be true..it often is.
Airbnb and vacation home rentals can attract people who the house was never rented out to..trashed and in the Toronto case..jewelry and booze stolen.
This also happened recently to a Calgary Airbnb "client" where over 150K in damages were done to the house. The party animals destroyed many things in
that house.
<She> owns a stylish Victorian semi is in a trendy Toronto neighbourhood and has three separate units. Perfect, she thought, for making a little extra income as a vacation rental. 
A friend of hers who lives nearby and who *claims to have made up to $80,000 a year renting his property encouraged her to list on HomeAway.*

*The bait and switch.*


> At the time he was supposed to check in, two other men showed up saying the man whom she had been talking to would arrive later.





> Everything seemed fine." she says. "I checked up on them a few times over the course of the week that they were here. They seemed very pleasant."





> The balcony was covered in rotting food, the bedroom had condoms on the floor, mattresses, bedding and clothing were strewn about, drawers had been pulled out and dumped, even her bathroom products, expensive hand creams and moisturizers had been emptied.
> 
> Worse, the guests had *broken into two locked rooms upstairs and stolen thousands of dollars' worth of alcohol, rare clothing and jewelry.*





> "That's what's killing me the most," Carrubba says. "Some of it was family heirlooms."





> Besides the damage, thousands in lost jewelry, including family heirlooms, Carrubba had also spent $20,000 renovating her home to prepare it for use as a vacation rental, money she says she won't recoup because she no longer feels comfortable having strangers in her house.


of course HomeAway does not have insurance to cover the damages nor the stolen property. They say it's up to individual homeower to get the
extra insurance..which of course you won't get in Ontario...as soon as the insurance company finds out you are trying to make money from
your principle residence..watch out for a cancellation of your insurance policy.
http://www.cbc.ca/news/business/hom...t-house-trashed-by-vacation-renters-1.3125646


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## OhGreatGuru (May 24, 2009)

A sad experience for the Homeowner. But I don't see that Homeaway has any liability. They're an on-line advertising board for B&B's. They don't do security checks on renters. Prospective renters can make payments on-line through Homeaway if both tenants & homeowner wish, for which I am sure Homeaway charges a fee to the owners. But they're really just providing an on-line payment service like PayPal. Some owners prefer to deal directly with tenants. 

I wouldn't consider it wise to store valuables in a house you are renting out to strangers - and I rather suspect her insurance company is going to think the same.

I suppose she thought she was doing the sensible thing by making copies of their drivers' licenses and health cards. But from the sound of things they were probably fakes. She can file a police report; and if they can verify the identities she could try a civil suit for damages. But they also sound like the kind of people you might not want to take to court yourself. As the article says it's a cautionary tale. Don't rent out your home on 24 hours notice to strangers without a better paper trail.


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## carverman (Nov 8, 2010)

OhGreatGuru said:


> > I wouldn't consider it wise to store valuables in a house you are renting out to strangers - and I rather suspect her insurance company is going to think the same.
> > I suppose she thought she was doing the sensible thing by *making copies of their drivers' licenses and health cards.* * But from the sound of things they were probably fakes. *
> 
> 
> ...


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## Beaver101 (Nov 14, 2011)

^ Needless to say, greed and stupidity went hand-in-hand with her. And some friend she had advising an easy and quick money making scheme - dumb and dumber!


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## carverman (Nov 8, 2010)

Beaver101 said:


> ^ Needless to say, greed and stupidity went hand-in-hand with her. And some friend she had advising an easy and quick money making scheme - dumb and dumber!


Yes, and another saying 'stupid is as stupid does".

These days with so much crime out there...you can't run the risk of renting out anything to anybody without being present in the house pretty much all the time.
As soon as you take money for a room or a house, you open yourself up to far worse than the few dollars you may receive in rent.

Just like on the internet, where you can assume anyone's identity, it's going that way now with licences...even the ones that have holograms on them.

I'm not saying that everyone that registers with these online travel accommodation services is going to get trashed or robbed, but it's a safe bet that
there will be a percentage that will wish they never tried this scheme.

There was another incident in Calgary a while ago, where again a couple went on vacation themselves and rented out their house to "a nice young man"
and when they came back the house was trashed...over $150k in damages. However AirBnB did have insurance to pay for the damages...lucky for them.


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## OurBigFatWallet (Jan 20, 2014)

$80k a year on short term rentals?! Either that amount is grossly overstated or that person hustles 24-7 for the rent money


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## nathan79 (Feb 21, 2011)

I definitely wouldn't do it, unless the house was stocked with junk furnishings that didn't have any great monetary or sentimental value. I hate it when people touch my stuff. Tenants are always hard on places, It would be easy for them to break something even accidentally. Can't imagine just giving someone my house for a week unsupervised.


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## carverman (Nov 8, 2010)

OurBigFatWallet said:


> $80k a year on short term rentals?! Either that amount is grossly overstated or that person hustles 24-7 for the rent money


She claimed she rented it out for $300 a night x 6 nights (with a $500 damage deposit..LoL!) 
Lets say that IF she rented it out to different clients at $1500 for 5 nights x 50 weeks..that's $75k of possible income right there. 
Very lucrative if one is extremely lucky to get good clients every week that stay for 5 or 6 nights. ..
..but like everything else..on paper it seemed like a good idea. She didn't check on who would be responsible for damages and that
was her fault. You can't always take the word of neighbours that suggest these ideas.

Not sure what she spent the $20,000 on in renos..maybe extra bathroom?


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## james4beach (Nov 15, 2012)

I'm surprised how many of these smart phone fuelled fads are convincing people they can "make money" doing these things. I'm talking about: Uber, Lyft, Air B&B, and the other amateur replacements for common services. I think people generally follow this logic:
1. I love my smart phone
2. smart phones are amazing and revolutionary
3. a service based from a smart phone must be revolutionary
4. I'll get in on this revolutionary thing and make easy money

There's a reason that the proper way to do these things -- time tested -- is through a dedicated business. For hotels, it's a special-purpose property that has various important things like insurance, and well-oiled procedures for cleaning, service, maintenance, etc.

For taxi services, we have licensing bodies, regulation, strict rules about driver identification, proper liability insurance, etc.

I recently started trying out Lyft (an Uber-like service) and have been chatting with the drivers. One of the drivers told me he had worked 12 hours that day and showed me his logs about his fuel charges... he is barely turning ANY profit. And what's his insurance situation? How about liability in case a passenger is harmed? I shudder to think how that might play out in an amateur-run world.

Same with Air B&B. It's definitely a great concept from the guest's side, but for the property owner ... probably a very minor profit, until something horrendous happens -- like major theft, property destruction, etc. And then they find out that their home insurance doesn't cover activities like using your place like a hotel/hostel. Oops. "Poof" go the profits.

People run these rough calculations and figure they can make a killing doing things like working as a driver (Uber/Lyft) or running a makeshift hotel (Air B&B). The calculations always seem to be overly optimistic, and never consider the hidden costs (often in the form of risk) which actually nullify all profits in terms of 'expected profit over a long enough period of time that something inevitably goes wrong'


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## james4beach (Nov 15, 2012)

I'll give you another quick example.

My parents live in a condo building, and some genius upstairs is renting out 2 condo units he owns to a bunch of young people in a hostel-like fashion -- with something like Air B&B. There is constant noise, alcohol & drug use, and unsavoury characters who are scaring the other neighbours (many of them elderly). There have been problems like broken glass raining down on balconies below them.

More than one neighbour is preparing to sue the owner of the condo(s), especially for harm and disruption that has come to them from the reckless rentals. Others are investigating which part of the condo regulations the owner is violating.

So here's an example of someone who thinks they are being smart and making big bucks by renting out their condos, but who is probably going to get sued/fined ... or worse (suffer property damage). Not to mention other hidden costs like societal harm, injuring or unsettling your neighbours and being a bad neighbour.

P.S. wait til a fire breaks out in a property like this, burns the place to the ground, and insurance covers NOTHING because of improper use of the residence for commercial purposes. Anyone wanna guess if you might also then have additional liabilities to other parties, since your insurance is nullified? With no valid insurance, who will pay the liability damages to others? Over time I'll bet we'll start hearing about families being ruined and going bankrupt due to disasters stemming from Air B&B properties


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## carverman (Nov 8, 2010)

james4beach said:


> People run these rough calculations and figure they can make a killing doing things like working as a driver (Uber/Lyft) or running a makeshift hotel (Air B&B). The calculations always seem to be overly optimistic, and never consider the hidden costs (often in the form of risk) which actually nullify all profits in terms of 'expected profit over a long enough period of time that something inevitably goes wrong'


Everyone plans for positive returns, very rarely do people with all sorts of money making schemes plan for worse case...that is the reality check case that offsets the positive case.

Using a vehicle for your own transportation is a calculated risk.
Your insurance premiums are based on your age, driving history and the number of kilometers you drive for personal use. 
If you use it to drive to work, then that could also raise your premiums. 

Car financing, depreciation, wear and tear (tires/brakes), and other repairs and gas are huge drawbacks to turning a profit...but hardly
anyone that signs up with these personal taxi services thinks about tha, t and what it actually costs them to operate their vehicle on a daily basis.

Most think.."Well I own my car anyway..might as well make some money at it, driving strangers around and get paid less than what a taxi will charge."


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## OhGreatGuru (May 24, 2009)

Beaver101 said:


> ^ Needless to say, greed and stupidity went hand-in-hand with her. And some friend she had advising an easy and quick money making scheme - dumb and dumber!


Now, now, let's not ascribe to greed what may be simple naiveté and lack of business sense. It is not unusual for people to make ill-advised business plans. As another poster pointed out, a gross income of $80K+ might not be hard to achieve in some locations. But it appears she didn't sit down with someone knowledgeable and discuss what her net  income might be after she had paid for renovations; cleaning; higher mtce costs; insurance; bookkeeping; taxes; etc. Also a lack of awareness of the risks in such a venture.


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## james4beach (Nov 15, 2012)

So might it be fair to say that services like Air B&B, Uber, Lyft are _taking advantage_ of desperate (and under-employed people) by drawing them in *to monetize their own personal property*, nearly assuredly at a disadvantage? The company wins... the amateur loses.


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## houska (Feb 6, 2010)

james4beach, something to what you say, but I think you're going too far.

Those services are indeed drawing people to monetize their own personal property. However, it is not *necessarily* at a disadvantage. From Uber drivers I've talked to, as well as a couple (not yet many) airbnb hosts, these services are actually quite effective at monetizing poorly utilized *bits and pieces* of personal property that could otherwise not be economically utilized, since there'd be no way to cost-effectively market to the intended audience.

So I've ridden with an Uber driver who drives - when he feels like it - for a couple of hours between his morning and his evening part-time jobs. Exaggerating slightly, he'd otherwise be home watching TV with his car in the driveway. This way both his time and his car are used. I've stayed (through airbnb) with a couple who have a nice architect-designed waterfront retirement house with a guest studio for visiting family. They rent out the studio for the time they have no family visitors. They're there most of the time keeping an eye on it.

What's important in each of these positive cases is that it's little slivers of underutilized capacity, where it's essentially just variable cost (not fixed cost) that needs to be covered, and where people take steps to manage their risks well. They don't feel under pressure to do something that might be dumb for a few extra $.

Where the model fails is where people see it as a quick'n'dirty way to *make a quick buck competing with the "professional" system*. So the guy who tries to make his living full time as an Uber driver, and needs to cover full car expenses, will find himself working harder and harder, maybe driving unsafely or taking fares in areas he shouldn't. The folks who think they can get rich quick by getting paid near-hotel rates for an apartment with the same amount of work of being a (longer-term) landlord. Or (occasionally) who probably know it's not quite safe, but are seduced by a few hundreds of dollars to rent out their apt while they are away without arranging with a friend to keep a close eye on things.


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## Beaver101 (Nov 14, 2011)

OhGreatGuru said:


> Now, now, let's not ascribe to greed what may be simple naiveté and lack of business sense. It is not unusual for people to make ill-advised business plans. As another poster pointed out, a gross income of $80K+ might not be hard to achieve in some locations. But it appears she didn't sit down with someone knowledgeable and discuss what her net  income might be after she had paid for renovations; cleaning; higher mtce costs; insurance; bookkeeping; taxes; etc. Also a *lack of awareness of the risks *in such a venture.


 ... this is beyond an ill-advised "business" plan... it's a huge risk-taking to "rent" to short-term tenants = strangers as she is lucky her house didn't burn down, only burglarized.


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## sags (May 15, 2010)

I agree with you Beaver101

A fire would be difficult to explain to the insurance company. They probably would deny the claim.

There was a discussion on the radio about all these new "internet companies" and how the laws haven't kept up with the development.

The website owner's claims they have no liability for anything may be true..........or it may be wishful thinking.

I was thinking about that guy who ran the Silk Road website.

He claimed he was only providing peer to peer listings and he was not responsible for anything illegal going on between the users of the site.

He received several life sentences............as in no chance of parole ever............after being found guilty of drug charges.


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## carverman (Nov 8, 2010)

OhGreatGuru said:


> Now, now, *let's not ascribe to greed what may be simple naiveté and lack of business sense.* It is not unusual for people to make ill-advised business plans. Also a lack of awareness of the risks in such a venture.


Uh huh! as someone once said .."it seemed like a good idea at the time"..$300 a day X days a year...

Wow! in 1 year I could make $80K from renting out part or all of my house. If business was good for 10 years..why I could even collect as much as $800k...and be practically a million on future income....like speculating on futures in the stock market but even with that the losses may not be as bad.

Renting out your house to tenants with a lease can be bad enough..especially if you get bad tenants that slowly trash the house, requiring thousands in repairs to make
the house liveable..but renting out to total strangers who may, or may not be who they claim they are, is another thing, and you can't always check them for
references because they may have false identities...like visitors from another province.


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## carverman (Nov 8, 2010)

Beaver101 said:


> ... this is beyond an ill-advised "business" plan... it's a huge risk-taking to "rent" to short-term tenants = strangers as *she is lucky her house didn't burn down*, only burglarized.


This is my immediate thoughts on reading her story. 

What is not reported is what went during the times she didn't come around to check. She mentioned in the story that she did come around a "few times" during the time her place was rented out, and "they seemed nice enough'..but obviously she wasn't there 24/7 to see what was going on.

The guy that rented out the place mentioned that someone else was coming...who knows what kind of party they had....drunken-bawdy goings on..and if you get enough of them in a drunken state, they will do things that they probably wouldn't do if they were sober..like break into the rooms where she had her booze and heirloom jewellry locked up...*she might as well put up a sign on those doors.."Booze and jewelry in here"*...how stupid!

If there were smokers in that party, and they left smouldering cigarettes, or turned on the electric stove and a fire started and the insurance company didn't know she had rented it out...her claim would probably have been denied..or she would have to take them to court to collect anything on the fire damage.

Without video surveillance, how else are you going to monitor the guests? If if you did have hidden cameras, you would need to have someone monitor (spy) on what is going on 24/7...and rush over before any damage got done..but if you are renting out your premises as a B&B, people renting have some rights to privacy...
otherwise, you could be accused of being a voyeur if they found out.

it's a tough call.


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## Beaver101 (Nov 14, 2011)

^ Yes, you did touch on the insurance aspect in your earlier posts and I think home (more like house than home) owners are nuts taking these chances with these (supposedly $-money making) arrangements. All it takes is one bad incident (fire or house trashing) to wipe them out.


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## carverman (Nov 8, 2010)

Beaver101 said:


> ^ Yes, you did touch on the insurance aspect in your earlier posts and I think home (more like house than home) owners are nuts taking these chances with these (supposedly $-money making) arrangements. All it takes is one bad incident (fire or house trashing) to wipe them out.


This morning an insurance industry spokesman *for Ontario* said on CBC morning news; that IF you rent your house out "commercially as a airbnb" without notifying your insurance company and something happens,* you WILL NOT be covered for any loss or damage.* 
This came out of the reason of people wanting to rent out their homes for the Pan-Am games for the duration in July in Toronto. 

Renting out your home on a regular basis to unknown people presents a extreme risk to the insurance companies and they can deny you insurance on your property if you proceed and they find out about it later. that means good luck trying to get homeowner's insurance from other agents as they check as you have to sign a form that you have never been denied insurance..or if you have..for what reason. 

Falsifying this on an insurance application will negate any possiblilty of getting regular home owners insurance. The insurance companies are 'wising up" to the airbnb This also applies to the renters who injure themselves on your property (drunk or sober) and sue you for damages. ..so anybody reading this via CMF be forewarned!


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## Beaver101 (Nov 14, 2011)

^ Not just "houses", what about condos? I think that idea is even worst in that private accomodation market. 

Pan Am games, ... yawn.


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## Charlie (May 20, 2011)

insurance is the key issue still to address.

overall...there's always risk in renting....either a suite or an investment property. But there's a huge insurance gap with the airbnb model. With the market cap of these companies I think it's just a matter of time they find a way to insure their hosts. But they haven't yet.

The revenue is there, though. A neighbour rents airbnb and nets well over twice for his suite on an annual basis as he would on a straight rental. Lots more work...but more income too and the suite is open for when the inlaws and guests come over.


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## Beaver101 (Nov 14, 2011)

^ and don't forget about bedbugs too ... yeech, shudder.

Charging the inlaws there may be a good idea there .... :biggrin:


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## sags (May 15, 2010)

Insurance is a big concern, but there are others.

Lots of people are just plain weird. Hardly a day goes by and there isn't a story about an escaped python or something.

And you can't tell by looking at the person or even their backgrounds.

We bought a nice home one time from an high ranking military person. The home presented well, but after we purchased it and moved in we discovered that all their dressers, cabinets and pictures hid holes in the walls. The bedroom carpets were cut out in the middle (they installed the carpet around the beds...........back in the water bed days).

They must have had some epic battles in that house.

You just never know about people.


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## carverman (Nov 8, 2010)

sags said:


> Lots of people are just plain weird. *Hardly a day goes by and there isn't a story about an escaped python or something.*
> 
> And you can't tell by looking at the person or even their backgrounds.
> 
> ...


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## carverman (Nov 8, 2010)

Beaver101 said:


> ^ and don't forget about bedbugs too ... yeech, shudder.
> 
> Charging the inlaws there may be a good idea there .... :biggrin:


Adds a new meaning to "sleep tight and don't let the bed bugs bite!"

Where do these blood sucking insects come from?..from travellers..in their suitcases! Once they get into the walls, the carpets and the closets,
they are very similar to "Kooka-ratch-as"...very hard to exterminate. 



> "They're eating us alive!"
> 
> His arms and legs are riddled with bite marks and bloody scabs, wounds from nighttime bed bug feeding sessions.
> 
> "I'm horrified, I can see them all over the place. They're in my couches, on my bed and all over the kitchen," he said, visibly shivering with fear.


http://www.ottawasun.com/2013/10/22...infest-his-ottawa-community-housing-apartment


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