Owning a STR Business as a RE Agent?

Question

Hey everyone, first post!

I am currently pursuing my RE license and working on developing a short-term rental management company. The business model would be to lease spaces from residential homeowners and/or apartment complexes, provide accommodations, and market through Airbnb, VRBO, etc.

My question is, can a real estate agent working under the supervision of a broker also own and manage a short-term rental business? If so, how does the broker need to be involved?

Thanks in advance community!

Raj

Raj Jogi · Answer

@James Wise Thanks for the feedback and advice! I really appreciate it!

Raj Jogi · Answer

@Leah Slaughter

Thanks for the clarification!

James Wise · Answer

Well 1st thing to note is that in the eyes of the real estate division a short term rental business is the same thing as a long term rental business. Both models fall under property management. In the property management business each state is going to have differing rules on the regulations. A common one is that all property management businesses need to be ran through a real estate brokerage, not just the agent involved. So what you will find is you may have some trouble getting a broker to allow you to run this business as the liability, hassle and risk is all high while the returns are relatively low. In addition you've got municipalities cracking down due to zoning regulations and looking for hotel taxes and things of that nature. To be honest this isn't really a viable business plan unless you're in a tourist area. Even then though, it's gonna be tough.

Leah Slaughter · Answer

If you OWN or lease the properties, that is different than doing it on behalf of clients. In our state, you cannot manage on behalf of others unless under the direction of a broker who has to be fully involved and responsible. But, you can of course manage your own rental properties. That said, most leases do not allow you to short term rent, etc., so you would want to do a lot of research before you get into this and I would think many brokers would not like that being done under their license.