When Curtis Stanley of Columbia Heights bought a second home as a vacation property, he had no intention of renting it out. But two mortgages can cramp a style in even the best economy. "I quickly realized that if I wanted to fix it up and make improvements, I would have to rent it out to offset the cost of remodeling," he said.

Stanley, whose property is in Breezy Point, near Brainerd, Minn., has seen a slight decrease in rentals this year. That's not surprising considering the economy, but Christine Karpinski, author of "How to Rent Vacation Properties by Owner" (Kinney Pollack Press, 2007, $26), doesn't blame the economy for fewer rentals. Quite the opposite, she believes that a slow economy often works in favor of owners of second homes only a couple of hours away from a major metro area such as the Twin Cities.

And there are more of them now. The number of Americans who plan to rent out their second homes rose sharply to 25 percent in 2007, according to the National Association of Realtors. In 2005, the number was 14 percent.

Ted LeVin of Lakeville rents out his vacation lake home near Hayward, Wis., about two hours from the Twin Cities. "This year we were almost fully booked for the peak summer season by January," said LeVin. "Normally, it's not rented until March."

LeVin and his wife, Jill, bought the high-end home in 2005 to rent out year-round. They've visited many bed and breakfast inns for inspiration and tried to furnish their place comfortably and in an upscale manner.

"We want people to feel as if they're stepping into a real house, not a sterile rental," said Ted. That meant furnishing the kitchen with a lot of utensils and a double convection oven. The couple have had renters say that it's better equipped than what they're used to at home.

Potential problems

For many owners who have furnished their second homes as nicely or even nicer than their primary ones, surrendering it to strangers is a big leap of faith. One quarter of second-home buyers say that the main reason for the purchase is an income stream, but anyone new to being a landlord worries about the "trash" factor. Vacation-home owners assume that strangers will trash their property, said Karpinski.

"It's the biggest concern that second-home owners have," she said.

Neither the LeVins nor the Stanleys have experienced any "trashy" renters. The only issue for the Stanleys, who rent out their 650-square-foot cabin for up to $680 per week, has been one renter who left a window open. "No one has broken anything," Stanley said. The LeVins, who rent out their chalet log home for $2,000 per week in peak season, have never had much more damage than a scuff on the floor.

Both couples stress that they "pre-qualify" their renters. Potential guests find their properties listed on VRBO.com or Homeaway.com, two of the most popular vacation home rental sites. Interested renters send an e-mail inquiry, but conscientious property owners have learned to pick up the phone and talk to the potential guest. That's when owners can discern the age of the renters (most avoid renting to anyone under 25), talk about the lease, security deposit and, most important, get a feeling for who might be staying in their home.

For Lynn Cattrysse of Mounds View, the problem wasn't the renters, it was the management company. She and her husband bought a condo in Cocoa Beach, Fla., for their daughter while she was in school. One management company said a first-floor condo was undesirable, so they settled for 30 percent occupancy. Another company was collecting extra fees from renters that were never disclosed to the owners.

Lessons learned

The Cattrysses eventually found a property manager they liked, but many second-home owners list their properties on sites such as Homeaway.com and then handle the rentals themselves. Phil Erickson of Shoreview initially used a management company, but when the fees added up to about 30 percent, he placed an ad on VRBO.com and handled the rentals himself. "It was one of the best financial decisions we ever made," he said.

Erickson's two condos in Maui rent for $249 (one-bedroom) and $289 (two-bedroom) per night. Erickson doesn't travel to Hawaii often, but when he does, he and his wife spend up to half of their time doing maintenance and shopping for the property to keep it in pristine condition.

Catrysse said that even though she uses a management company, she wants guests to alert her, in addition to the management company, to any problems.

Are owners quitting their jobs and living off rental income? Hardly. Don't expect to make tons of money renting out your second home, owners say, but with a solid rental history and tax benefits, many owners should be able to break even or go slightly into the black.

John Ewoldt • 612-673-7633 • jewoldt@startribune.com