It’s a vacation on the house

TAPPING into our houses for cash isn’t a new concept. People have treated their homes as piggy banks for the last few years by opening equity lines of credit or taking cash out when they’ve refinanced.

Since Southern California is a popular vacation destination, it was probably only a matter of time before homeowners began seeing tourist dollar signs on their front doors as well. Transient rentals -- in which people turn the keys to their homes over to strangers for anywhere from two days to six months in exchange for wads of cash -- have picked up with a vengeance. Although no one is keeping track of the numbers, the anecdotal evidence is strong, particularly in beach communities.

What’s spurred the surge, said Christine Karpinski, author of “How to Rent Vacation Properties by Owner,” is the Internet. The growth in websites that deal with short-term vacation rentals is a natural evolution of the Internet, Karpinski said. “Travel is one of the principal reasons people turn to the Internet. And many people prefer to stay in a fully equipped home over a hotel room. This is just a service whose time has come.”

Although a few local Realtors still dabble in rentals, most now shy away from short-term leases. A day spent showing a client vacation rentals won’t yield the same fat payday as one spent showing homes for sale.

The Internet has, in some cases, eliminated the middleman, Karpinski said. People can locate multiple properties, look at photos and read feedback from others who have “been there, done that.”

A good example of the speed at which this burgeoning online industry is growing is JetLiving.com, a website that less than two years ago was a mere glint in the eye of its 27-year-old founder, Brandon Ezra. The site, which matches homeowners with vacation renters, now handles more than 1,000 properties worldwide. About 100 of them are along Southern California’s shoreline. And business is lucrative. Ezra just landed an $80,000 monthly rental for a client on Broad Beach in Malibu.

Some websites function as listing services, pointing vacation renters in the direction of what’s available and letting them work out the details directly with the owners. Others, such as JetLiving.com, function as property management companies, screening tenants, collecting deposits, checking on damage. JetLiving.com takes a percentage of the rent -- from 10% to 30% -- (excluding the deposit and cleaning fees) or charges a service fee to the renter for locating a property.

But the websites all have one thing in common: owners who want to make their houses work for them instead of working for their houses.

Take Jo Giese, who owns a 4,000-square-foot home that she just made available for short-term rentals. It sits above Broad Beach, and it has what she describes as “the best view of the best beach” in Malibu. The radio journalist decided to take a sabbatical and plans to use it to travel -- practice tai chi in China, hike in Big Sur, study Spanish in Mexico.

“Why should my house sit empty?” she asked.

Why, indeed? She plans to charge $2,000 a day in the peak summer season.

For Giese, the notion of renting out her home came as something of an epiphany.

“When I met the man who would be my husband, a doctor, and learned that he rented out his Malibu Colony beach house when he went to the south of France in the summer, I thought that was the weirdest thing I’d ever heard. I mean, I’m from Seattle, where a home is your personal residence, your hearth, your private family place. It’s not an investment where from time to time you pack up your personal treasures and rent it out to strangers.

“So, for me to be able to rent out my home during my sabbatical means I’ve come 180 degrees. My husband died two years ago and I think right now he’s smiling and thinking, ‘Atta girl!’ ”

Or there’s producer Yvonne Bernard, who four years ago, with her then-boyfriend, bought a 2,400-square-foot oceanfront home along the Strand in Hermosa Beach for $1,475,000. (Appraisals last spring put the house’s value at $3.6 million to $4.2 million.) The house has four bedrooms and four baths, plus there’s a 650-square-foot, one-bedroom, one-bath guesthouse in the rear, and it sits on a corner lot, just steps away from the sand. The house has original small-slat wood floors, a wood-burning fireplace and a rooftop sun deck with protective wind glass.

To buy out her boyfriend last year, Bernard needed to come up with cash.

She now rents out the main house for $28,000 a month in the summer and $18,000 a month off-season and has moved into the rear guest quarters with her two golden retrievers.

Who are her clients? Mostly families or couples from the East Coast who pick her place based on the photos they see on the Internet. She advertises on several websites. Her clients must cough up a hefty deposit -- although Bernard said she has “no horror stories” about damage to report -- and must carry their own insurance.

Bernard provides bikes and beach chairs, beach toys and boogie boards; the home has high-quality linens and towels -- and she stocks it with fresh flowers for each new arrival.

The small touches, she said, help her command top dollar. That and the killer views and proximity to the beach.

A few doors away is a home owned by Andee Abad of Rancho Palos Verdes. Last spring, she and her husband bought the 2,800-square-foot beachfront home in Hermosa Beach, expecting to live in it themselves.

“Too small,” was her finding. And perhaps too soon to resell. They are renting it out to vacationers for “what the market will bear” -- in this case, $18,000 to $20,000 a month. The property is listed on several websites. So far, she has had several tenants, and a few upcoming bookings.

As rosy a picture as homeowners may present while they jingle that extra cash around in their pockets, the rental process is not without some bumps.

Owners are urged to check whether their insurance policy covers leasing out the property. In some cases, tenants insurance may be necessary or a rider covering personal liability.

And damage does occur. JetLiving.com’s Ezra says that, despite the strict screening of tenants, one in about 10 rentals winds up with some of the deposit being used to cover damage costs.

“Things break,” he said. “This isn’t college kids having wild parties -- we discourage that and won’t lease to people looking for that experience. But sometimes, a glass of red wine does spill on a white sofa.”

Another issue to investigate is whether your community or homeowners association frowns upon private homeowners offering nightly or weekly rentals. Certainly, nearby inns, which must collect and pay hotel taxes, aren’t fans of the practice. Some people are leasing out their homes for short periods under the radar, while others require a monthly lease in adherence with regulations.

Author Karpinski said that in her 10 years of renting out her condos in Florida, she has yet to come across a complex that restricted short-term rentals. But if this is the intended use, would-be purchasers should check first with the homeowners association, she said.

Rental income for up to 14 days a year is tax-free, under IRS rules. Beyond that, it is taxable as income.

Still, for homeowners like Giese who are about to embark on a vacation paid for by her house, this is, as she put it, “found money.”

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A Web of rentals

There are many sites to assist people wanting to find a private home vacation rental.

* The site www.greatrentals.com was started by a Michigan couple in 1997 dissatisfied with the service they got from the company handling their condo rental in Indian Shores, Fla. It lists 7,000 to 10,000 properties and gets 3 million hits a month. Owners are charged to list on the site. A one-year listing is $158; six months, $110.

* Owners get a free 30-day pass at vacationrentals.com, which then charges $120 per year ($150 in Florida). At both Great Rentals and Vacation Rentals, prospective renters and owners deal with each other directly; renters are also cautioned to ask for references and to check representations about the property thoroughly.

* There are no advertisements on www.jetliving.com, which is paid a percentage of the rent. The company screens prospective renters, collects deposits and offers policies for tenants without insurance. It also offers financing to pay for the vacation.

Other sites include:

* www.socalbeachrentals.com features San Clemente properties.

* www.socalbeachcribs.com offers homes for both vacation rentals and filming locations.

* www.valuevacationrentals.com covers all of California.

* www.cyberrentals.com also lists properties worldwide but with fewer Southern California properties.

*www.vrbo.com is short for vacation rentals by owner.

* www.californiabeachresorts.com covers the California coast from Santa Barbara County to San Diego County.

-- Ann Brenoff