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Would you swap your hotel for a perfect stranger’s bed? So-called social travel networks have seen a surge in popularity as people find new ways to cash in on their possessions, space and even time. Websites such as Airbnb, Wimdu and 9flats enable holidaymakers to bypass hotels and homeowners to make money renting out their pads for just a few weeks of the year – but there are risks.

The breadth of choice is impressive. Airbnb has listings in 33,000 cities, ranging from beachside apartments and mid-century bungalows to city lofts and country cottages.

A few minutes of browsing finds places to suit almost any budget and taste; a one-bedroom Berlin loft for £186 a week, a three-floor cube house in Rotterdam for £574 a week, and even a luxury three-bedroom LA penthouse, complete with pool table, fire pit and hot tub, for £1,634 a week.

Some sites specialise in whole properties to rent (such as Housetrip), but others allow you to refine your search to find private rooms and shared rooms. Onefinestay takes things a step further, concentrating on rentals of upscale apartments and houses in London and New York, taking care of everything for owners including replacement linen, cleaning, insurance, storage of valuables and meeting guests.

Owners are often encouraged to share their insider knowledge and pass on top tips to the people staying in their home. Some hosts go beyond the call of duty, offering free bikes to use during your stay, pointing out the best restaurants and even taking you on a tour of the city.

So the benefits are clear, yet for both host and guest, cost and security are the priorities.

If you are tempted, be clear as to exactly what you will end up paying, looking out for extras such as cleaning fees and admin charges. Airbnb takes a 6-12 per cent cut from guests and charges hosts 3 per cent for complete bookings, while HouseTrip charges a service fee of 10-20 per cent and an admin fee of 3 per cent (for both guests and hosts). Cancellation fees will apply too, and may differ from one listing to another, although they usually work as a percentage refund depending on how late you leave it to cancel your booking.

When it comes to safety, self-regulation in the form of reviews is a huge part of how these markets work. A lack of decent photographs and incomplete descriptions are usually enough to put people off, but the community relies on every member to provide feedback and flag up issues.

Fraudsters can use these sites to advertise holiday villas or apartments that don’t actually exist, so research the holiday firm and think twice before you pay an owner directly. The Association of British Travel Agents (Abta) offers some handy advice; check terms and conditions to confirm exactly what you are paying for, and don’t be afraid to ask questions, as a legitimate company or owner should be able to answer your queries.

Avoid using a money transfer agent such as Western Union or Moneygram to pay for accommodation, as these are not intended for commercial payments and your money cannot be traced if you encounter a problem.

The sites should do their bit too. For example, Airbnb offers a free “host guarantee” in many countries, reimbursing hosts for damage to their property up to £600,000, although this protection is subject to various exclusions including jewellery and motor vehicles. Similarly, for guests, the better sites offer a 24-hour support team, and they wait for up to 48 hours after a guest’s booked check-in date so that if there is anything wrong on arrival they can hold the money until a solution has been found. They should also provide emergency properties and last-minute changes so that your holiday isn’t ruined.

If you are planning to let your home, you also need to consider the tax and legal implications. In the UK, if you are renting out a room, short-term lets are considered the same as taking in lodgers, so the first £4,250 you earn each year is tax-free under the Rent A Room scheme (although you will need to inform your mortgage provider and contents insurer).

If you are renting out your entire house, you are liable for tax on any earnings (if you earn less than £2,500 you can ask HMRC to adjust your PAYE code, otherwise you’ll need to fill in a self-assessment form each year). Be warned that subletting is usually forbidden under the terms of residential mortgages, although lenders may consent to short-term lets. Some renters have even been served with eviction notices for violating their leases.

Legal issues could also be a concern as homeowners in some cities have run into regulatory barriers. For example, many US cities ban rentals of fewer than 30 days if properties have not been licensed and inspected (although housesitting and home swaps are both possible). A judge in New York recently issued a $2,400 (£1,600) fine to an Airbnb host, and in Quebec, the government is also trying to crack down on rentals without permits.

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