AgentBrokerage

The rise of ‘short-term rental funds’: A new business for agents

Raising money from 'passive investors,' funds plough cash into new asset class, creating opportunity for agents
  • Real estate agents can use their market expertise and property-management know-how to profit off short-term rental funds.
  • Short-term rental funds are pooling cash from growing numbers of "passive investors" to buy and rent out properties on short-term rental platforms.
  • Fueled by a network of data and management startups, the larger funds like to keep a low profile, as they navigate choppy legal waters and some opposition to short-term rentals.

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

After real estate broker Iddo Gavish started making a killing by buying and renting out houses on Airbnb, some local investors took notice. “I’ve had many people approach me, and a lot of people are jealous,” said Gavish, CEO of Las Vegas-based Gavish Real Estate, a brokerage and property management firm that specializes in distressed sales. “They said, ‘Why don’t we do it on a bigger scale?” That’s why he’s employing an increasingly popular real estate investment strategy: He’s raising cash from investors to buy single-family properties, lease them out on short-term rental platforms like Airbnb and then split the profits with those investors. Ventures like Gavish’s have been around for some time, but some observers say they’ve spread like wildfire in the last year. And now some investors are taking what could be called “short-term rental funds” to a whole new level. At least one institutional investor is already buying and renting out proper...