YOU ARE HERE: LAT HomeCollections

It's a vacation on the house

Southland homeowners are renting out and reaping the rewards.

April 16, 2006|Ann Brenoff | Times Staff Writer

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, 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, function as property management companies, screening tenants, collecting deposits, checking on damage. 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.

Los Angeles Times Articles