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Give your house keys to a stranger?

About the author

Alina Dizik is a freelance journalist who covers consumer trends, careers, lifestyle and small business for national publications. Her work appears in the Wall Street Journal, Entrepreneur, Men's Journal and BBC.

(Thinkstock)

(Thinkstock)

When Sandra Zuluaga, rented out a room in her Mexico City flat to a couple over the winter holiday, she opened her front door to find an unexpected guest.

“They booked for two people, but showed up with a baby,” said the 39-year-old publicist. “The baby was lovely, but it was a surprise.”

It’s one of the many surprises part-time landlords face when they rent their homes or part of their homes temporarily, be it weeks at a time or just for holidays. As short-term rental sites make it easier than ever to rent out property occasionally, many find it can be a good way to generate extra cash to offset mortgage payments or earn extra money for a holiday.

The largest peer-to-peer rental websites including Airbnb, Flipkey, Homeaway operate in more than 140 countries. But no matter where you are, the threat of damage to your home or unexpected hiccups in the rental process can make it seem daunting to get started.

“It’s easy to come up with scenarios of what could go wrong,” said Chip Conley, head of global hospitality at Airbnb. But with 550,000 people renting out homes to more than 10 million users via Airbnb since it launched in 2008, many consumers already see the benefits.

This year, Zuluaga, expects to earn 130,000 pesos($10,000) by renting out her entire two-bedroom, two-bathroom apartment when she and her husband Enrique travel and leasing the spare bedroom when they’re not away from home. Aside from the unexpected visitor, the experience has been overwhelmingly positive, she said.

“So far, so good,” said Zuluaga, who started renting out her flat via Airbnb last winter. Approximately 40% of Airbnb users rent out a spare room in their home, according to the company.

If you’re thinking of joining those half-a-billion people renting though Airbnb — and the many more using other services, it pays to prepare yourself and your property before you leap into the world of sometimes landlord.

Insurance plan

To help users prepare, most peer-to-peer rental sites offer insurance protection for property owners and make it simple to hold an additional security deposit for the property. For example, users are automatically insured for up to $1 million in damages through Airbnb, while Flipkey and Homeaway allow users to purchase insurance for $35 to $89 per contract for coverage of up to $5,000 through a third-party insurer.

Singapore-based Roomorama, which operates across Asia, North America and Europe, does not provide insurance for hosts, but the company encourages renters to take a security deposit. Both Flipkey and Airbnb say the majority of users take a deposit from $100 to $300. Often times, the deposit is held via credit card or PayPal until guests complete the checkout process.

Sandra Zuluaga rents her Mexico City flat through Airbnb. (Courtesy Airbnb)

Sandra Zuluaga rents her Mexico City flat to visitors. She tried to keep her home hotel-like for guests. (Courtesy Airbnb)

Rental sites say that less than 5% of users file a claim. And most damage is not serious, but instead involves incidents such as scratched walls or broken dishes. At Airbnb, recent claims filed included a damaged coffee table and complaint of a guests drinking the host’s valuable alcohol. In each case, expenses were covered by the website’s insurance plan. But be aware, any claim you file will be fully investigated before the company pays up.

“We don’t just write the check, we have a team who verify that something happened,” said Conley.

It’s possible to get reimbursed for damages caused by short-term renters through some home insurance policies too, but laws vary by country and even municipality. Call your insurance company to tell them about your short-term rental plans and check coverage before renting out your home, said Jeanne Salvatore, a spokesperson for the Insurance Information Institute, a US-based nonprofit. (BBC Capital contacted several insurance companies for this story; all declined to comment.)

Don’t expect your insurer to immediately raise your rates — especially if you don’t rent your home regularly. Renting out a room for a longer period of time, could also impact your mortgage agreement in some countries, including the UK.

“The important thing is that your company knows about it,” said Salvatore, adding that some insurers are looking at new ways to insure peer-to-peer rentals.

Mind the law

Check local guidelines for short-term renting. Joanne Birtz, 55, who rents out a suite in her Montreal town house, first secured a tourist permit from the province of Quebec before listing it on Flipkey.

Birtz paid $295 per year for the permit, which she said offered her peace of mind about the legality of renting. She earns about CAD18,700 ($17,000)  from the rental, which has a separate entrance, its own bathroom and kitchenette. An outdoor hot tub is available to visitors and guests receive a bottle of wine and chocolate. Birtz has been renting the suite for more than two years and said she earned more than if she rented out the room full-time.

Birtz does her own cleaning and says it takes several hours to do a thorough job. Most of her guests are seasoned travellers and come well-prepared for exploring Montreal. At times, they’ve even shared tips with Birtz about the city’s budding restaurant scene. 

“It’s kind of fun,” she said.

Vetting the visitors

Deciding who can rent out your home is a difficult one. Some sites including Airbnb can make it easier by showing reviews from previous users who’ve rented to a perspective guest.

Additionally, doing an online search for a name can bring up results such as a LinkedIn profile, Facebook page or other information about the renter. In addition to doing her homework online, Zuluaga recommends asking questions about who is coming and why the person is taking the trip.

 “Their reaction and the way they answer helps me follow my instinct,” she said. Most websites use a payment system that links directly to a credit card, PayPal or bank account so landlords don’t need to worry about a credit check.

Antonio Lenarduzzi expects to earn $5,000 per year renting a room. (Courtesy Airbnb)

Antonio Lenarduzzi expects to earn 11,000 real, or $5,000, per year renting a spare room in his Sao Paolo apartment. (Courtesy Airbnb)

Strive for a hotel-like experience

Users suggest providing a hotel-like experience — plain walls, neat bedsheets, and the like — to guests because strangers tend to be wary of someone else’s personal clutter.

“We put away the picture frames, jewelry, books,” said Zuluaga. “Everything we leave out is very basic.”

Food and kitchen supplies are essential, because many renters choose the option instead of a hotel room because of this amenity, said Eric Horndahl, vice president of marketing at FlipKey Boston. “People want to stay in a vacation rental so they don’t need to go out to eat every single meal,” he said.

Antonio Lenarduzzi, 44, a mechanical engineer, rents out a room in a Sao Paolo, Brazil apartment he shares with his wife Ellen. When using the apartment’s shared living spaces with guests, he says it’s important to be understanding of other cultures.

“People have different feelings and different expectations,” said the 44-year-old. The room costs the equivalent of $43 per night and is rented several times per month for days at a time. The couple leave tropical fruit and cake out for guests, along with maps of the city. During the rainy season, Lenarduzzi makes sure to leave umbrellas.

Once you’ve committed to visitors, Horndahl recommends owners lock away valuables in a spare room or closet so they are out of the way. Adding a keyless entry option and booking a cleaning service can make the process of checking in and out faster, he added.

Take an inventory of items in your home. That can help assess any potential damage after you’ve rented the home, said Salvatore, the spokesperson for the Insurance Information Institute, a US-based nonprofit. Use your mobile phone to taking photos of your belongings, so you can keep a visual record or enter items into a spreadsheet that can help you track inventory of your home.

Lenarduzzi, an avid traveller himself, has hosted travellers from Taiwan, Norway and Australia in the last year. Revenues from renting out the spare bedroom are upwards of 11,000 real ($5,000) per year. Typically, the couple takes time to speak or have drinks with guests.

“We love travel – and this way we still travel when we’re home,” he said.

Would you rent your home to a stranger? If you have, has anything unexpected happened? Share your stories and comments on this story or anything else you have seen on BBC Capital on our Facebook page or message us on Twitter.