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Short term rental property manager- need a license?

Posted Feb 28 2023, 09:02

Hi! I am pondering the idea of starting a short term rental management company. After doing some research, I realized that some states require a license in order to be a property manager. How are people getting around these regulations (aka cohosts and others managing other people's units)? I would ideally operate in MN.

Any knowledge or experience would be appreciated. Thanks!

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Luke Carl#3 Short-Term & Vacation Rental Discussions Contributor
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Luke Carl#3 Short-Term & Vacation Rental Discussions Contributor
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Replied Feb 28 2023, 09:41

Co host is a loop hole because the money goes to the owners bank account not yours. I can see that going away in the future. 

If you’re going to do it do it right and become a real manager and run a real business that’s my 2 cents 

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January Johnson
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January Johnson
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Replied Feb 28 2023, 10:00
Quote from @Mitchell Maginnis:

Hi! I am pondering the idea of starting a short term rental management company. After doing some research, I realized that some states require a license in order to be a property manager. How are people getting around these regulations (aka cohosts and others managing other people's units)? I would ideally operate in MN.

Any knowledge or experience would be appreciated. Thanks!


States have different requirements for licensing (and the TYPE of license) based on whether you will be earning a salary or commission.

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Nicola Fraser
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Nicola Fraser
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Replied Feb 28 2023, 10:02

Every state is different...would do some research for your state.  Consider calling the state real estate commission to confirm your understanding.  You want to set up your business correctly from Day 1.   

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John Underwood
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John Underwood
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Replied Feb 28 2023, 10:03

Need to do it legally and not look for a way around the law.

Ask a local PM company or broker what the rules are.

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Sarah Kensinger
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Sarah Kensinger
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Replied Feb 28 2023, 10:05
Quote from @Mitchell Maginnis:

Hi! I am pondering the idea of starting a short term rental management company. After doing some research, I realized that some states require a license in order to be a property manager. How are people getting around these regulations (aka cohosts and others managing other people's units)? I would ideally operate in MN.

Any knowledge or experience would be appreciated. Thanks!

Unfortunately, pretty much every state besides a handful requires a license, specifically a realtor's license. To get around that you cannot list the property on the OTA's website or deal with any of the money, the owner would need to take care of that. Those are the biggest two that are not allowed, but I would suggest checking in whatever state you are co-hosting/managing in.  

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Michael Baum
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Michael Baum
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Replied Feb 28 2023, 10:14

I would just work on getting that PM license and not try and get around the regs. If you are serious about starting a legit business, you will need it eventually @Mitchell Maginnis.

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Andrew Steffens
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Andrew Steffens
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Replied Feb 28 2023, 10:24

I would contact your state licensing board. In FL it is DBPR - I actually called them years back thinking we needed a Real Estate Brokers License, but since STR is transient, we can operate with our a RE Broker license for stay under 6 months. We did however have to be licensed with the division of hotels and restaurants. I would have never known otherwise, just a quick phone call (make sure you talk to a knowledgeable/caring employee as govt employees sometimes are not).

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Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Eliott Elias#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Replied Feb 28 2023, 19:58

You however, are a co-host, not property manager. And that does not require a license. 

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Brooklyn McCarty
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Replied Feb 28 2023, 20:30

Most of it depends on the way money is handled. Co-hosting is kinda a cop out. All states have different requirements, be sure you familiarize yourself with them. 

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James Hamling#3 General Real Estate Investing Contributor
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James Hamling#3 General Real Estate Investing Contributor
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Replied Mar 2 2023, 08:56

@Mitchell Maginnis first of all there is never a way "around" the laws and regulations, not in any permanency, because it's only a matter of time before one get's caught and most often the penalties exceed any of the "gains" one had received. 

Now, that said, there is often times other legal routes. More than 1 way to skin the cat. 

In MN, that is only 3. Either (a) you are a licensed Real Estate Broker (your post said start a biz, not working under a managing broker). (b) Hold 10% or more ownership in the property thus being a managing member of the ownership entity. (c) Arbitrage. Lease it from the owner and than sub-let. 

BUT, and here is a huge but, individual city ordinances also matter. For example, in Mpls you can do only 1. Many have tried to work around this, many getting nailed for it. 

So, to do volume, your back to (a), become a Real Estate Broker, or partner with one. 

That's it. Remember, the system itself is setup to force persons into the licensure and regulatory measure, work-arounds are not well received, and actively worked to be "plugged". You will not find any inviting of your desire to work around from within the system because all of us, were in the system, we bite that bullet, paid our pound of flesh.    So even if you do setup some workaround, your going to find a few hundred to a few thousand "activist enforcers" in form of licensed agents,  happy to report you the moment they see you "coloring outside of the lines". 

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Adam Widder
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Adam Widder
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Replied Mar 8 2023, 14:28

James post is pretty solid. I believe in MN managing for other for a fee requires a license. I hear what people are saying with the term "host," however, all in all, its the same. It's managing a property, whether short or long term. 

This is a risk question, because you could be exposing your self. To do it right imo, you could get your license and hang it with a low cost broker. So now you're paying $2500ish to become licensed and in a brokerage. Then just doing management activities. I think this covers your basis and also provides you EO coverage depending on your broker, but that's pretty cheap too, maybe around 1500. 

So all in you're looking at 4k to run a biz in an ethical manner. Not much. You can also advertise that as you grow the properties you host, licensed/insured professional will be appealing to many of your owners. 

Plus having the broker behind your back will give you decades of real estate law experience you can call when needed. I would interview and network to find a low cost brokerage that has experience in management or STRs. 

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Replied Feb 16 2024, 10:03

You will definitely need a Brokers license in the state of Minnesota. I own and operate a vacation rentals management company in Duluth after being a realtor/investor for several years. This is the only route you can take to a legitimate business. I think I'm one of the few in the state doing this. Looking to expand as well!

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Brittany Kuschel
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Brittany Kuschel
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Replied Feb 16 2024, 14:16

@Taylor Silker Love to see that you are actively taking this on! Do you mind sharing the name of your company - maybe you could PM or text me? I am confident that I can send business your way as a number of clients are actively looking for more PM options for STR in Duluth and surrounding areas!