Imagine it’s July in Traverse City. Cherry Festival crowds pack the streets, Airbnb bookings are sold out, and nightly rental rates are sky-high. Fast forward to February in Detroit, and you’re dealing with snow, quiet streets, and tenants hunkered down for the winter.
This is the reality of Michigan’s rental market — heavily influenced by seasons, city trends, and local laws. Whether you’re eyeing a cozy condo in Ann Arbor for visiting professors or a lakefront cottage in Grand Rapids’ outskirts for weekend getaways, your strategy matters.
In today’s shifting market, knowing whether to go short-term or long-term can make or break your investment returns. In this guide, you’ll learn the key differences, Michigan-specific pros and cons, real city examples, and local resources to help you decide.
Table of Contents
- Short-Term Rentals in Michigan
- Long-Term Rentals in Michigan
- Michigan Laws & Regulations
- Seasonal Market Considerations
- Cost & ROI Comparison
- Local Resources
- Tips & Warnings
- Conclusion
- FAQs
Short-Term Rentals in Michigan
Short-term rentals (STRs) — like those listed on Airbnb or Vrbo — are typically rented for less than 30 days.
Where STRs Shine in Michigan
- Traverse City & Petoskey: Summer tourism drives high nightly rates.
- Ann Arbor: College events and football season keep demand high.
- Detroit Downtown: Growing business travel and events market.
Example:
A two-bedroom in downtown Grand Rapids can earn $200+ per night during ArtPrize — far more than a monthly lease.
Use here an image of Real Estate Market Trending
Pros of Short-Term Rentals
- Higher Income Potential during peak months.
- Flexibility to use the property yourself.
- Attracts vacationers, business travelers, and event-goers.
Cons of Short-Term Rentals
- Seasonal Fluctuations: Winter months in tourist towns can be slow.
- Higher cleaning, maintenance, and furnishing costs.
- Requires active management or hiring a property manager.
Long-Term Rentals in Michigan
Long-term rentals (LTRs) are typically leased for 6–12 months or more.
Where LTRs Work Best in Michigan
- Lansing: Steady demand from state government employees.
- Kalamazoo: Student rentals near WMU and Kalamazoo College.
- Detroit Suburbs: Families seeking stability.
Example:
A three-bedroom in Flint rented for $1,200/month can provide steady income year-round without seasonal gaps.
Pros of Long-Term Rentals
- Stable, predictable income regardless of the season.
- Lower turnover and management workload.
- Tenants often cover utilities.
Cons of Long-Term Rentals
- Lower earning potential compared to peak short-term rates.
- Less flexibility if you want to use the property personally.
- Risk of non-paying tenants or long vacancy periods if a lease ends unexpectedly.
Michigan Laws & Regulations
Michigan’s rental regulations vary by city:
- Detroit: STRs are allowed in certain zoning areas but require registration.
- Traverse City: Caps on STR licenses in some neighborhoods.
- Ann Arbor: Specific permits needed for non-owner-occupied STRs.
Tip: Always check your city’s zoning map and rental ordinances before listing a property.
Seasonal Market Considerations
Michigan’s rental market is tied closely to weather and events:
- Summer: High demand in tourist towns (Traverse City, Mackinac Island).
- Fall: Football season boosts Ann Arbor and East Lansing rentals.
- Winter: Ski areas like Boyne Mountain attract STR guests, but cities may see slower demand.
Use here an image of Michigan seasonal rental demand chart
Cost & ROI Comparison
| Factor | Short-Term Rentals | Long-Term Rentals |
| Income Potential | High (seasonal) | Moderate (steady) |
| Management Time | High | Low |
| Vacancy Risk | Seasonal | Lower |
| Upfront Costs | High (furnishings) | Lower (basic upkeep) |
Local Resources
Here are programs and lenders that can help Michigan investors:
- MI Home Loan Program – For purchasing investment properties with low down payment (michigan.gov/mshda).
- MSHDA Assistance – Helps with down payments and closing costs.
- Detroit Down Payment Assistance Program – Grants for qualifying buyers in Detroit.
- Traverse City STR Licensing Office – Guidance on local rental permits.
Tips & Warnings
Do’s:
- Research your city’s rental laws before buying.
- Factor in seasonal income dips for STRs.
- Keep emergency repair funds for both types of rentals.
Don’ts:
- Don’t ignore Michigan’s harsh winters when budgeting for repairs.
- Don’t assume high summer income will cover the whole year.
- Don’t skip tenant background checks.
Conclusion
Choosing between short-term and long-term rentals in Michigan isn’t just about personal preference — it’s about matching the right property to the right market conditions. STRs can bring big summer paydays in tourist spots, while LTRs offer stability in cities with year-round demand.
If you’re ready to make the right move, Brick By Brick Investments can guide you through Michigan’s unique rental landscape, from law compliance to maximizing ROI.
FAQs
1. Are short-term rentals legal in Detroit?
Yes, but only in certain zoning districts with proper permits.
2. Which Michigan city has the highest STR demand?
Traverse City during summer and Ann Arbor during football season.
3. Do I need a license for an STR in Ann Arbor?
Yes, non-owner-occupied STRs require a city license.
4. Can I convert my LTR to an STR in Michigan?
Only if local ordinances allow it — check your city rules.
5. Which is more profitable in Michigan — STR or LTR?
STRs often earn more in peak months, but LTRs provide year-round stability.
6. Does weather impact STR income?
Yes, Michigan’s winters can reduce tourist demand outside ski areas.
7. Are there grants for buying rental properties?
Yes, programs like MSHDA Assistance and Detroit Down Payment Assistance offer support.
8. Is tenant turnover higher with STRs?
Yes, STRs have frequent guest changes compared to LTRs.
9. Do I pay more taxes on STR income?
Possibly — STR income may be subject to hotel or lodging taxes.
10. What’s the best Michigan city for stable LTR income?
Lansing and Detroit suburbs often provide steady rental demand.