Episode 0018, 8/26/2026

Episode Summary

What is the best township for a short-term rental in Northern Michigan? There is no single answer, because STR rules can change dramatically across township, village, and city boundaries—even within the same county. For a buyer, permit availability, rental limits, occupancy rules, transferability, and the possibility of future regulation can matter almost as much as the property itself.

Full Transcript

Introduction

[00:10]

Welcome to Northern Michigan Real Estate Intelligence. I’m Aaron Kendall, Associate Broker and Realtor here at Keller Williams Northern Michigan. Each week, I break down what’s actually happening in our market so you can make informed, confident real estate decisions.

This week, I want to talk specifically to people looking at Northern Michigan real estate as a short-term rental investment.

Most buyers naturally start with the property.

What does it cost? How close is it to the lake? How many people can it sleep? What could it rent for during July and August?

Those are important questions.

But there is another question I would put near the top of that very list:

What township is it in?

Because when you’re buying a short-term rental in Northern Michigan, crossing one municipal boundary can completely change what you’re allowed to do with essentially the same property.

 [01:06]

The Core Topic

[01:08]

This is one of the biggest differences between buying a traditional second home and buying something you expect to operate as a short-term rental.

The property can be beautiful. The numbers can look great. Demand can be strong.

But none of that matters if the local rules don’t allow you to operate the business the way you modeled it.

And as of August 2026, there is no single Northern Michigan STR rule.

There isn’t even necessarily one rule for an entire county or township, when you factor the property could be in an HOA that restricts Short Term Rentals.

You can have different rules in neighboring townships. A village inside a township can have a different ordinance from the surrounding township. HOA’s can, and do, restrict STR’s, even if the township or county allows them.  The City of Traverse City has its own vacation-home-rental licensing and zoning requirements. Leelanau Township requires an STR permit and ties occupancy to approved bedrooms, with a maximum occupancy provision. Milton Township in Antrim County has its own vacation-rental ordinance.

So when someone asks me, “Can I Airbnb this house?”

My answer can’t simply be based on the county or township.

We need the exact property.

Then we need to identify the exact jurisdiction.

And then we need to verify the rules that apply today.

That last word matters.

Today.

Short-term rental regulations are not static. Local governments can debate amendments, impose new requirements, change permit systems, or revisit how existing ordinances are enforced.

That means buying an STR based entirely on what somebody did with the property three years ago can be dangerous.

The fact that the current owner rented it does not necessarily mean the next owner automatically inherits the same ability.  The fact that the neighbor STR’s is the fact that could actually disqualify you from being able to do it.  Some townships say STR properties have to be a minimum distance apart from each other.

That is especially important when permits or licenses don’t transfer with the sale.

So township selection isn’t something I would investigate after finding the perfect property.

I would use it to help decide where to look for the property in the first place.

 [03:32]

Market Explanation

[03:34]

Here’s why this matters financially.

Imagine two homes.

They’re ten minutes apart. Similar price. Similar square footage. Similar number of bedrooms. Both are in an area with strong summer tourism demand.

On a spreadsheet, they may look almost interchangeable.

But Property A is in a jurisdiction where short-term rentals are permitted under rules you can realistically comply with.

Property B is across the municipal line where new STRs are prohibited, permits are capped, or the operating restrictions fundamentally change the revenue model.

Those are no longer comparable investments.

And there are several layers I want an STR buyer to investigate before deciding that a particular location works.

First is the most obvious question: Are short-term rentals actually allowed?

Not, “Are there Airbnbs nearby?”

Not, “Did the listing agent say STR potential?”

Not, “The neighbors rent theirs.”

What does the current ordinance say, and what does the local zoning administrator say about this particular parcel?

Traverse City is a good example of why the exact location matters. The city has a formal Vacation Home Rental licensing program, but obtaining a license does not mean every residential property in the city automatically qualifies for vacation-home-rental use. Zoning still matters.

Second, does the jurisdiction limit the number of permits?

If there’s a cap, I want to know whether permits are actually available.

A rule saying STRs are permitted doesn’t help very much if the municipality has already issued every permit it’s willing to issue.

Third, what happens when the property changes ownership?

This is a major due-diligence issue.

If you’re looking at an established rental with great reviews and years of booking history, it is very easy to mentally attach that business history to the real estate.

But the permit may belong to the current owner rather than the property.

If it terminates at closing, you may be buying the house without buying the legal ability to continue the business in the same way.

Fourth, what are the occupancy rules?

This can completely change an investment projection.

A four-bedroom property that you modeled for twelve guests may not legally be allowed to accommodate twelve guests.

Leelanau Township, for example, bases allowable STR occupancy on approved bedroom information and imposes a maximum occupancy.

Septic capacity can also matter with Northern Michigan properties, particularly older cottages and rural homes.

If your expected nightly rate depends on accommodating a larger group, occupancy needs to be verified before you use that revenue assumption.

Then there are operational requirements.

Does the municipality require a local contact?

How quickly must that person be able to respond?

What parking is required?

Are there quiet hours?

Are there minimum stays or limits on how frequently the property can be rented?

What are the inspection, safety, registration, renewal, and fee requirements?

Individually, some of these may sound minor.

Together, they determine what kind of business you are actually buying.

There is another layer that I think investors sometimes overlook: regulatory direction.

Suppose Township A currently has relatively light STR regulation but residents and officials are actively debating tighter controls.

Township B has a detailed ordinance that has been in place for years, with a predictable permit process and clear operating standards.

At first glance, Township A may look friendlier because it has fewer rules.

But from an investment standpoint, Township B might actually offer more certainty.

That’s why I wouldn’t simply rank communities from “most regulation” to “least regulation” and call the least-regulated township the best investment.

Regulation is only one part of a risk.

Predictability matters too.

A clearly regulated market where you know the rules can sometimes be easier to underwrite than a jurisdiction where there is currently no dedicated STR ordinance but substantial pressure to create one.

And then we have the actual real estate fundamentals.

A township can be extremely STR-friendly and still be a poor investment for a particular buyer if acquisition prices are too high, tourism demand is weak, seasonality is extreme, management is difficult, or the expected rental income doesn’t support the ownership costs.

The reverse can also happen.

A highly desirable vacation area can have excellent rental demand, but the local regulatory environment may make entry difficult or impossible for a new owner.

That’s why I look at these as two separate filters.

Can you legally and practically operate the STR?

And if you can, do the economics make sense?

You need both.

For Northern Michigan investors, that means the search may make more sense when it starts geographically.

Instead of saying, “Find me a lake house under $500,000 and then we’ll see if I can rent it,” you can reverse the process.

Identify jurisdictions where the current STR framework fits your investment plan.

Then look for properties inside those areas that fit your budget, guest profile, management strategy, and revenue expectations.

That doesn’t guarantee the ordinance will never change. No one can promise that.

But it reduces the chance of falling in love with a property and only later discovering that the business plan doesn’t work.

I went considerably deeper into the individual areas in this week’s blog, “What Is the Best Township for a Short-Term Rental in Each Northern Michigan County?“ You can find that in the blog section at AaronKendallRealEstate.com.  It even has a table breaking each one down with highlights for easy scanning.

The blog is where I get more specific about the differences buyers should investigate across Grand Traverse, Leelanau, Benzie, Antrim, Kalkaska, Wexford, and the surrounding Northern Michigan market.

But the principle I want you to remember from this episode is simple:

For an STR buyer, the township can be more important than the house.

 [10:14]

Wrap Up

[10:15]

If you’re considering a Northern Michigan short-term rental, don’t make the ordinance the final item on your due-diligence checklist. 

Move it toward the beginning.

Before you model revenue, verify the jurisdiction. Before you assume the existing rental operation continues, verify whether permits transfer. Before you calculate income based on twelve guests, verify legal occupancy.

And before you decide one township is “better” because it has fewer rules, look at the stability of those rules and the economics of the property itself.

The goal isn’t to find a township with no regulation.

It’s to find a property and location where the rules, demand, ownership costs, and your investment strategy actually fit together.

And most importantly, don’t try to navigate it on your own, contact me to analyze your situation to reduce the headache.  I promise you, it’s worth it.

If you found this episode useful, follow or subscribe to Northern Michigan Real Estate Intelligence, and look for next week’s episode as we continue breaking down the issues affecting Northern Michigan buyers, sellers, and property owners.

 [11:24]

Elite NorMI™ Prompt (clickable text, watch NorMI™ analyze your specific situation)

[11:26]

If you’d like to dive deeper on this, you can ask NorMI™ something like: “Compare the best Northern Michigan townships for the short-term rental I want to buy based on current STR rules, permit availability, occupancy limits, transferability, rental demand, seasonality, and my budget. Ask me about my budget and property priorities.“

Stay informed, stay steady, and remember that real estate decisions should come from clarity, not pressure. I’ll talk with you next week.

[11:56]