The greatest advantage to vacation rentals is that they provide the unique travel experience of living in an area. If your host is also living at your accomodation, you can ask them about local tourist spots and find out about places that only the locals know. Why not go to a nearby restaurant or buy local ingredients to cook your own meals? With a vacation rental you can have a completely different experience than those provided by guidebooks and travel websites, even if you've already visited the place before.
There are millions of vacation rentals around the world. Even out-of-the-way places with no hotels have homes, meaning you can vastly broaden your travel options by using vacation rentals. Plus, the facilities and services at each accommodation are not standardized like those of hotels—hosts plan them to be unique experiences. You can search for a rental which fits your needs from among a variety of accommodation types, from regular houses and apartments to cottages, villas, and guest houses.
Another advantage of vacation rentals is that they're more reasonably priced than hotels. The reason for this is that not all hosts are in it for the money. Many people want to host guests as an extension of their interests: renting out an empty room; learning about their guests; or showing travelers a good time in their neighborhood. In high-traffic areas during peak periods hotel prices can rise sharply, but even under the same conditions vacation rentals are still a relatively reasonable option.