Short term rental property manager- need a license?

Question

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!

Luke Carl · Answer

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

Taylor Silker · Answer

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!

James Hamling · Answer

@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".

Brooklyn McCarty · Answer

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.

Michael Baum · Answer

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.

Brittany Kuschel · Answer

@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!

Eliott Elias · Answer

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

Andrew Steffens · Answer

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).

January Johnson · Answer

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

Nicola Fraser · Answer

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.

Short term rental property manager- need a license?

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