This post is adapted from the blog of RealtyShares, a Priceonomics Data Studio customer. Does your company have interesting data or insights? Become a Priceonomics customer.

Photo by Paul Bica

In 2012, Jon Wheatley bought a $40,000 apartment in Las Vegas so that he could rent it out on Airbnb.

“I was surprised by just how cheap real estate was in Las Vegas,” says the British-born Wheatley. “I didn’t want to live in Vegas, and I wasn’t planning on being there very much. So when I looked at Airbnb, it looked almost too good to be true.”

Wheatley looked at the rates of similar apartments on Airbnb, and he decided that the apartment could pay for itself. He bought the flat and spent 3 weeks and $10,000 on furniture and renovations. After a year of remotely renting out the apartment, he says, he’d made $13,000 in profit.

When we ask if he recommends doing this, he replies, “One hundred percent. The model definitely works.”

In only 8 years, Airbnb’s premise—to allow someone to host a business traveler in a spare bedroom, or a family to rent their apartment to tourists while they’re out of town—has made it a $25 billion company. Co-founder Brian Chesky often talks about how anyone can turn extra space in their home into an asset that helps them pay their rent.

But the economics of short term rental sites Airbnb and VRBO also appeal to people who do not live in the house or apartment they rent out. This includes go-getters like Wheatley, as well as professional real estate investors.

Outside the real estate scene, however, this development has not been met with a positive reaction. In cities like San Francisco and New York, where housing is a scarce, politicized resource, the prevalence of property owners renting out multiple apartments has inspired protests, critical press, and the attention of regulators and lawmakers.

Photo via Airbnb

What’s missing from the already fractious debate over Airbnb, however, is the fact that the big players in the real estate market aren’t involved. At least, they aren’t involved yet.

Companies like AvalonBay and Camden Property Trust own tens or hundreds of thousands of units, and they spend hundreds of millions of dollars buying and constructing residential buildings. These companies normally rent out apartments to people who sign year-long leases. But they could instead rent them out on sites like Airbnb. We partnered with Priceonomics to investigate whether this real estate investing trend could spread to these big players.

At this point, we’re seeing that the uncertainty created by municipal debates over how to regulate Airbnb is keeping major investors out of the short-term rental game. For individual investors, however, the door is more or less wide open.

The Rise of the Professional Airbnb Investor

The financial benefit of an Airbnb property is clear to investors. They can make more money from short term rentals for the same reason you typically spend more on lodging while you’re traveling than you do on rent.

So how many professional real estate investors list apartments on Airbnb? And how large are their businesses?

The best way to see whether there is a big trend of professional investors using Airbnb would be to see how many hosts rent out multiple properties on the site. (After all, most people don’t have that many homes.) That kind of data, however, is hard to come by. The presence of professionals is a matter of controversy, which has made Airbnb selective about the information it shares.

But we can see how many professional investors used Airbnb in New York City by looking at a report—which is based on 4 years of subpoenaed data—released in late 2014 by the New York Attorney General.

According to the report, 94% of Airbnb hosts in New York city rented out 2 units or fewer. This supports the Airbnb company line that the majority of users are average joes renting out their homes. The other 6% of hosts, however, listed from 3 to 272 units. They earned a collective $168 million and were responsible for over a third of all bookings and revenue in the city.

Table from the New York State Attorney General’s report “Airbnb in the City”

During this time period, over 100 users had 10 or more properties. So at least in New York City prior to recent legislation, major, million-dollar real estate businesses use Airbnb. It’s possible that these apartments are pieces of larger real estate empires. But this data suggests that mostly small-scale investors use Airbnb—not billion dollar real estate companies.

To gauge how many real estate professionals use short term rental sites, we also talked with the founders of companies that help people rent out properties on Airbnb. These founders confirmed that most professionals on Airbnb are personal investors, but they also offered evidence that major real estate companies are interested.

Peter Abualzolof of Mashvisor, a real estate analytics startup focused on short term rentals, works mostly with amateur investors. Abualzolof says that he and his co-founders started Mashvisor at a Startup Weekend where they met many tech workers who wanted to buy Airbnb properties. The company helps some full-time investors, but most people are in the mold of Jon Wheatley.

Jim Breese says he works with people renting out spare rooms, personal investors, and some large ventures. He is the co-founder of LearnAirbnb, a young company that helps hosts “start, grow, and optimize [their] Airbnb business like a professional.” The chart below shows the results of a LearnAirbnb survey. As co-founder Jim Breese points out, almost one third of these hosts view Airbnb as a business.

Data via LearnAirbnb. The survey asked questions of 836 hosts who’ve worked with LearnAirbnb or one of its partners.

Breese has worked with a client who owns a 30-unit complex. He knows of groups of friends pooling a few hundred thousand dollars to purchase properties to Airbnb, as well as people raising funds from investors to do the same. But he hasn’t worked with really large real estate companies. “I don’t personally know anyone making $2 million a year,” he says.

Sean Conway of Pillow offered us some of the best evidence that big companies are interested in Airbnb properties. Pillow manages short term rentals—its staff will take care of listing your apartment, confirming guests, and everything else. Conway says that Pillow rents out families’ vacation homes and apartments that belong to consultants who travel 5 days a week. But he has also been approached by major investors.

“We’ve had investors with 500 units come to us and say, ‘We want you to take all of them,’” says Conway, “and we say, ‘No way, we’re a start up!’”

The Obstacles to Airbnb-ing at Scale

From looking at the report on Airbnb’s New York City data and talking with people in real estate, we can conclude that some significant commercial business happens on Airbnb.

But we’ve yet to find evidence that real estate companies with tens of thousands of units do short term rentals on Airbnb. Those companies declined our requests for comment, and even Pillow, Conway says, despite getting requests to manage hundreds of properties, has not talked with the major players.

They could just be keeping their plans quiet, but there are many reasons why short term rentals could remain the purview of average joes and smaller-scale investors.

At RealtyShares, our reasoning for not accepting investments for Airbnb properties is simple: they’re too new. Investors want to see a track record when evaluating a deal, and since Airbnb is only 8 years old, there’s less data and the market is immature.

Renting out an Airbnb also has elements of the hospitality industry that are foreign to the real estate business. Sure, you can find out the average price and occupancy rates in a neighborhood. But if you do a poor job promoting your Airbnb listing and satisfying your guests, you’ll never make the revenue you anticipated.

Another problem for big real estate investors is that they can’t benefit from economies of scale with Airbnb. Usually a company like AvalonBay owns entire buildings, which saves on the costs of upkeep for each unit. The company can hire on-site repair staff, make upgrades to the entire building in one go, and so on. That’s not the case when you have 200 units scattered around town.

This isn’t necessarily a crippling problem. Several companies that rent out individual houses, which have the same scaling problems, have recently had billion dollar IPOs. Other tools, like Pillow’s management service and Nest thermostats, make managing many Airbnbs easier and more efficient. Investors could also rent out an entire complex on Airbnb, although at that point they’re really in the hotel business.

Apartment photo by Axel Tregoning

A more paralyzing obstacle is that Airbnb dominates the short term rental market for apartments, which means that investors would be at the mercy of a single company. If Airbnb decided to cap its prices or demand a bigger cut of the profits, every real estate company’s short term rental investments would go to hell.

But the biggest deterrent, the uncertain and hostile regulatory environment, supersedes all of these. Voters and governments in some of the biggest cities in the short-term rental market are taking action to reduce their impact and ward off professional hosts. For people living in these cities, this backlash is hard to miss.

In order to prevent investors from renting out apartments full-time on Airbnb, San Francisco limits the number of days a unit can be occupied by short term renters to 90 days. Last November, 45% of voters supported a ballot measure that, if it passed, would have reduced that cap to 75 days.

In New York, it’s illegal to rent out an apartment in a residential building if the owner is not home. Meanwhile, a number of resort towns have banned short term rentals outright, and critics question whether the decentralized short term rental model can ensure safety without the regulations that exist for hotels.

Scott Shatford has been tracking the profitability of investments in Airbnb properties, which can be dependent on the regulatory environment of a given city. As the CEO of Airdna, an Airbnb data and analytics company, Shatford explains, "One of the interesting trends that we see with the short-term rental investments is a shift towards secondary markets, where there is less regulation and more untapped opportunities."

Not every city wants to ward off Airbnb. Peter Abualzolof of Mashvisor cites Philadelphia and Seattle as cities passing laws to legitimize short term rentals. Still, the situation is uncertain and in flux. “I’m even confused,” says Abualzolof. “I try to do the research and provide information, but I’m very hesitant, because it’s very vague.” There’s no city where a property owner can know exactly how Airbnb will be regulated—or even if it will be legal—ten years down the line.

If you’re an investor at a company deciding where to invest hundreds of millions of dollars, that’s not what you want to hear.

Airbnb’s White Whales?

Major real estate companies are unlikely to get involved in short term rentals until the regulatory situation is more clear. But there is another way they could get involved: as landlords partnering with tenants who host Airbnb travelers.

In December 2015, Bloomberg reported that Airbnb is in talks with billion dollar, multi-home real estate companies. In the past, landlords have clashed with tenants who they suspect break their lease by listing their apartment on Airbnb. These multi-home real estate companies are—indirectly through property management companies—the nation’s biggest landlords. Airbnb is reportedly offering to share profits with these companies if they bless their tenants’ use of short term rentals.

The companies are not offering updates or details on the talks. A representative of Camden Property Trust told us that it would be “premature” to comment.

Photo via VRBO

We did, however, get a glimpse of how this might work by talking to a local landlord and real estate investor. As he chose to remain anonymous, we’ll call him John Smith.

Smith has experimented with the type of arrangement Airbnb is proposing to major real estate investors. He partnered with a tenant, modified the tenant’s lease so he could rent out extra rooms in his apartment, and helped him register with the city.

When we ask how the experiment went, Smith responds, “There is absolutely something there.” The market rental rate for the apartment is around $6,000 a month, and Smith and the tenant made about that much from just one bedroom by putting bunkbeds in it, hostel-style.

Still, Smith is not sure whether it’s a good arrangement for landlords. Short term rentals come with extra costs—more wear and tear, higher electric bills, more expensive insurance—and he’s unsure whether the increased profit is worth the occasional headaches involved with the hospitality industry.

The most interesting takeaway from the experiment, though, has nothing to do with profits and everything to do with the ethos Airbnb tries to communicate. To counter critics and regulators who say Airbnb makes housing more expensive, Airbnb reps talk about how it helps hosts make money to pay their rent, and the company’s narrative centers around creating a sense of belonging that is absent when you stay in a hotel.

Smith’s experience echoes these talking points. He says that one of his tenants who rented out spare rooms on Airbnb used the extra money to quit his job and pursue artistic interests—and that he’s enjoyed hosting travelers, because he’s a big fan of hostels.

For this reason, Airbnb may eschew professional investors who want to rent out entire apartments in favor of working with real estate companies through landlord-tenant partnerships.

Who Rents the Future?

Airbnb is the posterchild of the sharing economy. By giving people a way to monetize an underutilized asset—a spare bedroom, Americans’ 7 million second homes, apartments that belong to people who are on vacation—the company created a huge, new industry.

But as business reporter Will Alden has written, decentralized services tend to become reliant on a small number of professional users. Anyone can run an auction on eBay, but full-time “power sellers” dominate the site. Similarly, professionals and “ad-hoc temp agencies” claim a large share of the work on TaskRabbit.

Now, this is happening on Airbnb. The appealing economics of short term rentals has attracted professional investors, and services that manage properties, use data to identify promising properties, and provide concierge services are popping up to support them.

Apartment photo by AIMCO/Architecturist

But in Airbnb’s case, the rise of professional investors has contributed to a backlash—from residents and regulators who believe it raises rents, and from tenants and co-op boards who dislike seeing strangers with suitcases in their building every night.

Depending on how the fight to regulate Airbnb and its peers shakes out, professional investors could be banned, welcomed, or treated differently in every city around the world. Perhaps partnering with landlords will be how the big players in real estate will get involved.

When we talked to people buying Airbnb properties and the founders of companies meant to support them, they expressed confidence that regulation would ultimately accommodate short term rentals.

“I don’t know what [the regulation] is going to be,” says Jim Breese of LearnAirbnb, “but once people start to see, ‘Hey we can co-exist,’ and once everyone sees how much money is in hospitality, everyone will want what they believe is their fair share.”

Several compared the situation to how Uber has overcome attempts to ban its ride-hailing services and how the music industry has gotten over its fear of piracy in order to profit from streaming.

Whether they are right will determine if Airbnb becomes a gold rush for investors, remains a moneymaker for millions of homeowners and renters, or does a bit of both.

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Note: If you’re a company that wants to work with Priceonomics to turn your data into great stories, learn more about the Priceonomics Data Studio. A version of this article first appeared Feb 2, 2016.