State of Short-Term Rentals in Michigan: Market Report

Market Overview

Michigan’s short-term rental market continues to grow — driven by the state’s 3,288 miles of freshwater coastline, four distinct seasons, and proximity to major Midwest population centers. Chicago (4.5 hours to southwest Michigan), Detroit (4 hours to northern Michigan), Indianapolis (4-5 hours to Lake Michigan coast), and Grand Rapids (central to everything) collectively represent over 15 million potential travelers within a half-day drive of Michigan’s top vacation markets.

Year-over-year revenue growth across Michigan STR markets has averaged 12%, with the strongest performance in premium lake markets (Traverse City, Charlevoix, Petoskey) and emerging coastal markets (Saugatuck, South Haven, Holland).

Performance by Market Tier

Premium markets (Traverse City, Petoskey, Charlevoix): ADR $220-450 for quality waterfront. Occupancy 58-72% annually. RevPAR $130-280. These markets have the highest revenue potential but also the highest competition density and most active regulatory environments.

Strong performers (Saugatuck, South Haven, Holland, Boyne area): ADR $175-350. Occupancy 52-65%. RevPAR $95-200. Growing demand, moderate competition, and generally favorable regulatory environments make these attractive for investment.

Emerging markets (Lake Huron coast, Central Michigan Lakes, Upper Peninsula): ADR $120-250. Occupancy 40-58%. RevPAR $55-130. Lower competition and entry prices, but shorter seasons and thinner demand outside peak months.

Occupancy Trends

Michigan’s occupancy challenge is seasonality. Peak season (June-August) occupancy across all markets ranges from 75-95%. Shoulder seasons (May, September-October) drop to 45-65%. Off-season (November-March) falls to 20-45% for non-ski markets and 40-60% for ski-adjacent properties.

The revenue gap between properties that actively market off-season and those that don’t is significant. Properties with winter-specific marketing, flexible minimums, and reduced cleaning fees achieve 35-50% off-season occupancy. Properties that coast through winter sit at 15-25%.

Professional vs. Self-Managed

The data across our portfolio and industry benchmarks consistently shows that professionally managed properties outperform self-managed by 30-70% in revenue in the same markets. The improvement comes from compounding optimization: better listing performance, tighter pricing, fewer gap nights, higher review scores, and faster response times that improve search ranking.

The gap is widening. As more properties enter Michigan markets, competition increases. Self-managed properties that performed adequately in 2020-2022 (when demand exceeded supply) are now competing against professionally optimized listings. The bar for “good enough” rises every year.

Regulatory Landscape

Michigan has no statewide STR licensing requirement, but local regulation is accelerating. Key developments: Peninsula Township (Traverse City area) implemented some of the state’s strictest STR caps. Multiple northern Michigan townships are considering or have passed new STR ordinances. Tax enforcement is tightening — the 6% Michigan use tax on accommodations is increasingly audited.

The regulatory trend is toward more regulation, not less. Owners who operate in compliance today are positioned for long-term success. Owners operating without proper permits, tax remittance, or safety compliance face increasing risk.

What This Means for Owners

Michigan’s STR market is healthy and growing, but the competitive landscape is maturing. The era of “list it and they’ll come” is ending. Properties that perform well in 2026 and beyond will be the ones with professional optimization, data-driven management, regulatory compliance, and consistent operational quality. The market rewards excellence and punishes mediocrity more than it used to.