Still, the house itself was lovely and the location convenient (part of the reason the area was depressed was that it was surrounded by highways).
There was one other crucial factor that led us to confidently accept this exchange proposal for the nice house in the awful neighborhood: unilateral car use.
We did not own a car; the SF exchanger did. So we bought transit passes for him. In exchange, we had unlimited use of his year-old luxury car.
Pulling a car into a private garage can turn a bad neighborhood into a perfectly fine area. The streets may have been unsafe but we didn't need to walk on them.
Clearly this is not the ideal way to swap homes. We want to interact with the neighbors and feel as if we are part of the community. That is the goal of home exchange.
But your vacation goal may be less idealistic. If you need to be in a certain town on specific dates, or your swap party has special needs (no stairs, lots of bedrooms, etc) you may not have the luxury of picking the perfect swap home.
An exchange in a dodgy neighborhood presents problems. But there are ways to reduce the risks and enhance your stay.
If your home is in a questionable area you can still swap. Just be ready to sweeten the deal with that exchange car. I bet you'll find someone willing to overlook the drawbacks.
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