How to Turn Your Second Home Into a Short-Term Rental

The Carrying Cost Reality

Your Michigan second home costs money every day it exists. Mortgage, property tax, insurance, utilities, maintenance, HOA — whether you’re there or not. For most Michigan lake or ski properties, that’s $25,000-60,000/year in carrying costs. If you use the property 30-60 days per year, the other 300+ days are generating zero revenue while generating full costs.

Short-term rental income doesn’t just “help with the mortgage.” For well-managed properties in strong Michigan markets, it can cover carrying costs entirely and produce positive cash flow. A property with $40,000 in annual carrying costs that earns $65,000 in STR revenue generates $25,000 in net income — from an asset that was previously a pure expense.

Step 1: Check Regulations

Before anything else, verify that your property’s location allows short-term rentals. Michigan has no statewide STR ban, but regulations vary dramatically by township. Some areas require permits. Some have caps on the number of STR licenses. Some restrict rentals to owner-occupied properties only. Some prohibit them entirely in certain zones.

Check three things: your township’s zoning ordinance (is your parcel zoned for STR use?), any STR-specific ordinances (permits, caps, requirements), and your HOA or deed restrictions (many HOAs prohibit or restrict short-term rentals regardless of township rules).

Step 2: Verify Insurance

Standard homeowners insurance typically does not cover short-term rental activity. If a guest is injured on your property and you’re operating without proper coverage, you’re personally liable. You need either a commercial policy, a specific STR endorsement on your homeowners policy, or a dedicated vacation rental insurance policy.

Contact your insurance agent before your first booking. The cost difference between standard homeowners and STR coverage is typically $500-1,500/year — a fraction of your carrying costs and a fraction of what a single liability claim would cost.

Step 3: Assess Property Readiness

Your second home is set up for you. Guest-readiness is different. Guests need: clear labeling (which drawer has the can opener, where’s the extra toilet paper), sufficient linens and towels (2 sets per bed minimum), basic kitchen supplies, quality WiFi throughout the property, smart locks for self-check-in, functioning smoke and CO detectors, and a clean, uncluttered space that feels intentional rather than personal.

The biggest shift: depersonalizing. Family photos, personal items, and stored belongings in closets make the property feel like someone else’s home rather than a vacation rental. Guests want to feel like the space is theirs for the duration — not that they’re borrowing someone’s house.

Step 4: Block Your Dates

Decide when you’ll use the property and block those dates first. Most owners use their property 4-8 weekends per year plus a summer week or two. Block these on the calendar before anything else. Your management strategy optimizes around your usage — not the other way around.

One consideration: blocking peak-revenue dates (July 4th week, Cherry Festival, holiday weekends) for personal use has a real cost. A single peak week might generate $3,000-6,000 in revenue. You’re not obligated to rent it — it’s your home — but understand the tradeoff when choosing your personal dates.

Step 5: Choose Your Management Model

Self-manage if you live nearby, enjoy the work, and have time. Use a marketing-only service if you want booking management but can handle operations yourself. Go full-service if you want everything handled — listing optimization, pricing, guest communication, cleaning, maintenance, and reporting. The right model depends on your proximity, available time, and revenue goals.

For most second-home owners — especially those who live more than an hour from the property — full-service management produces the best combination of revenue and quality of life. The fee is an investment in both the property’s income and your freedom to enjoy the property when you use it without thinking about the business side the rest of the year.