I love vacation rentals. They come in all shapes and sizes suited to number of people traveling and I have rented anywhere from one to four bedroom apartments and cottages in several countries.
We have stayed in an apartment amidst the ancient ruins of central Rome, in a 400 year old cottage in the English Cotswolds, in a restored 19th century abbey apartment in the Scottish Highlands, in a tiny 18th century French apartment next to the famous Rue Cler and Eiffel Tower, in a 15th century Tuscan house, as well as a myriad of other places. They are a great way to keep your travel costs down and a lot of fun when traveling with a small group (2-5 people).
It is a totally unique experience each time (not to mention the learning curve).
Not only do they offer a lot more ambience and living space for a lot less money than conventional hotel rooms but they also allow you to cook your own meals. That is a HUGE cost savings. Eating out is a large expense when traveling. Plus you get to live like the locals. You visit their stores and open air markets and often end up buying totally unfamiliar local foods that are delicious!
Another big bonus is renting one with a washer and if possible, dryer. That is a wonderful thing to have available and cuts down on your packing in a major way.
I always rent places that are near the historical center or within walking distance to town. That not only gives us access to shopping but also transportation access since we never rent a car opting for private drivers or local transportation.
I always recommend a vacation rental if your stay is at least 4 nights in one place. Less than that may be easier in a B&B since you don't have to shop for food. Furthermore, some of the more popular places require a minimum seven night stay but you should always ask. Sometimes owners or agencies will let you rent for less nights than shown on their website. And ALWAYS ask for confirmation of the price. Sometimes during shoulder, low season, pay in advance or in cash when you arrive, you can get a substantial discount off the web price. Price is governed by season and length of stay.
The best resources for vacation rentals are Slow Travel, Tripadvisor and VRBO. They have numerous reviews from people who have actually stayed in the rentals to avoid any surprises. However sometimes there is no rental shown for place you want to stay or the ones listed don't suit your needs. Then you have to become a search pro searching the internet for the appropriate apartment in the town where you want to be headquartered. I had to do this when booking our stay in the Scottish Highlands and that 3 bedroom, 3 bath restored abbey apartment was one of the best we have ever rented!