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Direct Swaps vs.Credit Exchanges, What is the difference?



 The Basic Direct Swap (simultaneous exchanges)

Typical scenario: I let you stay in my primary residence or second home, if you let me stay in your primary residence or second home of comparable rental value at the same time.  Even though the value of our respective properties is based on rental potential, there is no cash transaction. It’s a coordinated direct swap -- My $1000/month condo from, say, April 1-30 for your $1000/ month house from April 1-30. Tit for tat.

My house may have five bedrooms, three-and-a-half baths, and a secluded solarium in the garden, while your condo may have only two bedrooms and one bath and be located on the 12th floor of a downtown high-rise. Your condo rental rate (or direct swap value) is competitive for your location; and my house rate is competitive for my location.  If we do a direct swap, I know I can’t find a comparable place at a better value in your location, and you know likewise about my house.

As members of IVHE, we can make direct contact with each – initial inquiry and follow- through – via a secure members’ area on the IVHE web site.

Home Exchange for Credits (non-simultaneous exchanges)

Typical scenario: Let’s say I have a second home that I use on an irregular basis.  I might call it my place on the beach, my place in the mountains, my place in the city, my place on the lake, my place in France... you get the picture.  To make owning such a place worthwhile, I feel obligated to occupy “my place” as often as possible. This tends to loose it's initial excitement after awhile.  It’s still a great place, but I would like to vacation in other places for a change. I’m not getting any younger.

When my place is vacant, I open it up for rentals. I can either handle the details of booking and billing myself, or I can pay a management company to handle all that for me.  In the first case, checking references, verifying the renter’s identity, and keeping up with billing and credit-card payments can be a major headache. In the second case, my rental income is depleted by a sizable chunk for the management company’s fee.

The IVHE concept is conveniently different.   What if I didn't quote you a rental rate in dollars (or pounds, francs, marks, or any currency) but rather in credits – one credit for every $100 of rental value?  Instead of offering my place at a rental rate of $1,000 for seven nights, for example, I offered it for 10 Credits?  Then you come around and occupy my place for seven nights and pay me 10 credits?  More accurately, you transfer 10 credits from your IVHE account into my IVHE account. IVHE handles all this for both of us (for a small processing fee) in addition to listing our properties on their on-line catalog of homes worldwide.
When I’m ready to travel myself, and not stay at the same ol’ place, I can withdraw those 10 credits from my account and apply them to any property at any location where the host offers his place for 10 credits or less.   I didn't spend any money and the host didn’t make any money, but credits are like money in the bank.

If I don’t use them straight away, I can build up credits in my account every time I do a transaction for credits.  Before I know it, I might have credits totally much more than the credit value of my property.  That means when I’m ready to use them I can trade up to some fabulous accommodations. And all for a fraction of the real value.

Blogsmith – Mike DiPrima




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