Best markets surrounding Lake Michigan

[Julie Lin]

Hi,

I have been researching STR rental markets and regulations in my area and I am struggling with ways to enter a market with such stringent regulations. For example, I'd love to do a new build in New Buffalo near Lake Michigan but it looks like all the zones restrict new STRs. What markets in the IL, chicago, or nearby Lake Michigan areas are best for creating new STRs without being hindered by zoning regs?

thanks!

[Lyndsay Zwirlein]

Following! We're from Milwaukee originally and would love to buy a lake home, as well. Have you ever looked into Door County, WI?  Some areas have restrictions but I think there are some municipalities that allow it. 

[Julie Lin]

I’d consider it. I used to vacation there with my family growing up, though it’s a good 6 hours away from me. I would love to do New Buffalo/Michigan City for my first since it’s only 1.5 hrs away

[Jaron Walling]

We're fans of the eastside of Lake Michigan. Not a lot of people talk about the cities and towns over there. Demand is probably less but so are the prices. Holland, Muskegon, Shelby, Silver Lake, and Pent Water are all beautiful in the summer. Never been in the winter. You'll want northern Michigan for all the skiing and snowboarding demand. Boyne Highlands is amazing. Demand is probably higher. 

Get off the beaten path. There's all kinds of light houses and outdoor recreation including ATV parks, sand dune tours, hiking, bicycling trails, and popular disc golf courses. 

[Brooklyn McCarty]

Quote from @Jaron Walling:

We're fans of the eastside of Lake Michigan. Not a lot of people talk about the cities and towns over there. Demand is probably less but so are the prices. Holland, Muskegon, Shelby, Silver Lake, and Pent Water are all beautiful in the summer. Never been in the winter. You'll want northern Michigan for all the skiing and snowboarding demand. Boyne Highlands is amazing. Demand is probably higher. 

Get off the beaten path. There's all kinds of light houses and outdoor recreation including ATV parks, sand dune tours, hiking, bicycling trails, and popular disc golf courses. 

 We love to visit this side too! 

[Brittany Stradling]

I believe Michigan City doesn't have many regulations at all, but it's been a few months since I've checked. Even when the city considered implementing restrictions, the residents shot it down and wanted the city to focus on violent crime. 

Shortrule.com allows you to search regulations on your target city.

[Andrew Tucker]

Quote from @Jaron Walling:

We're fans of the eastside of Lake Michigan. Not a lot of people talk about the cities and towns over there. Demand is probably less but so are the prices. Holland, Muskegon, Shelby, Silver Lake, and Pent Water are all beautiful in the summer. Never been in the winter. You'll want northern Michigan for all the skiing and snowboarding demand. Boyne Highlands is amazing. Demand is probably higher. 

Get off the beaten path. There's all kinds of light houses and outdoor recreation including ATV parks, sand dune tours, hiking, bicycling trails, and popular disc golf courses. 

[Andrew Tucker]

@Jaron Walling@Julie Lin

Holland has been really taking some aggressive measures toward stopping STRs. Specifically Park township which makes up for the majority of hollands waterfront. They just voted in favor of enforcing against the operations of STRs starting October of this year. 

[Michael Paling]

Quote from @Jaron Walling:

We're fans of the eastside of Lake Michigan. Not a lot of people talk about the cities and towns over there. Demand is probably less but so are the prices. Holland, Muskegon, Shelby, Silver Lake, and Pent Water are all beautiful in the summer. Never been in the winter. You'll want northern Michigan for all the skiing and snowboarding demand. Boyne Highlands is amazing. Demand is probably higher. 

Get off the beaten path. There's all kinds of light houses and outdoor recreation including ATV parks, sand dune tours, hiking, bicycling trails, and popular disc golf courses. 

I lived in Pentwater for a couple years and it's the exact opposite of the summer in terms of activity. During the summer, it's insanely busy. During the winter, you can probably count the number of people in town on two hands. It's a gorgeous area and I loved it there, but it's heavy seasonal tourism. It would probably be a situation where you better make enough money in the summer to cover the rest of the year, but I know very little about STR, so I'm just speculating. 

[Jaron Walling]

Quote from @Michael Paling:

Quote from @Jaron Walling:

We're fans of the eastside of Lake Michigan. Not a lot of people talk about the cities and towns over there. Demand is probably less but so are the prices. Holland, Muskegon, Shelby, Silver Lake, and Pent Water are all beautiful in the summer. Never been in the winter. You'll want northern Michigan for all the skiing and snowboarding demand. Boyne Highlands is amazing. Demand is probably higher. 

Get off the beaten path. There's all kinds of light houses and outdoor recreation including ATV parks, sand dune tours, hiking, bicycling trails, and popular disc golf courses. 

I lived in Pentwater for a couple years and it's the exact opposite of the summer in terms of activity. During the summer, it's insanely busy. During the winter, you can probably count the number of people in town on two hands. It's a gorgeous area and I loved it there, but it's heavy seasonal tourism. It would probably be a situation where you better make enough money in the summer to cover the rest of the year, but I know very little about STR, so I'm just speculating. 

 Same... haha. That jives with our experience. We only go to Michigan in the summer. I've snowboarded at Boyne a few times but that area will always been in high demand. 

[Jonathan Klemm]

Hey @Julie Lin - As an owner of a Chicago AirBnB over the last 5 years, my suggestion is to use a different strategy.  Short-term rentals are over-saturated and not worth it unless you are going to build a business around it, which in my opinion, is harder than building a traditional real estate business.

Is there a particular reason you are wanting an Airbnb?

[Julie Lin]

Thanks for your thoughts

Honestly im feeling a bit torn by strategies and stuck.  I have the capital to enter the real estate business (I only want to spend $200k to start) but I cannot figure out how the heck to enter it right now. My journey so far:
1- analyze plenty of deals in dupage county and none of them cash flow at current prices and interest rates

2- analyze a few chicago deals that would cash flow in more challenging areas, but my agent has advised against investing in those areas bc the law in cook county and chicago highly favors tenants

3- consider STRs (+love the idea of having a vacation home!) but many areas have zoning laws or other regulations making it too difficult. And of course there are the folks saying it's too saturated. Aside from these issues, I was considering the easiest way to enter the market would be a new build-STR bc it's hard to find something nice at a good price right now
 

[Brittany Stradling]

Quote from @Julie Lin:

Thanks for your thoughts

Honestly im feeling a bit torn by strategies and stuck.  I have the capital to enter the real estate business (I only want to spend $200k to start) but I cannot figure out how the heck to enter it right now. My journey so far:
1- analyze plenty of deals in dupage county and none of them cash flow at current prices and interest rates

2- analyze a few chicago deals that would cash flow in more challenging areas, but my agent has advised against investing in those areas bc the law in cook county and chicago highly favors tenants

3- consider STRs (+love the idea of having a vacation home!) but many areas have zoning laws or other regulations making it too difficult. And of course there are the folks saying it's too saturated. Aside from these issues, I was considering the easiest way to enter the market would be a new build-STR bc it's hard to find something nice at a good price right now
 

Why stay so close to home? I would recommend Avery Carl's book. You can be very successful with managing your STR out of state. There are some areas that are over saturated but there is still a lot of opportunity.

[Julie Lin]

Yes I have read her book :)

I am definitely open to other areas too. Tho wouldn't want to do a new build so far away. Open to recommendations on other areas for a successful STR!

My husband and I were considering Oregon or something near mountains. Not gatlinburg. 

[Grant Schroeder]

@Julie Lin the Mt Hood area in Oregon or out in Sunriver/Bend, OR is great for an STR! I just had a client buy in the Mt Hood area in Jan 2023.

[Jacob Valle]

@Julie Lin  Have you looked at Heritage Harbor of Ottawa, IL.  It is a resort community with a marina along the Illinois River, about 90 miles from Chicago and not far from Starved Rock State Park. I know it's a very popular place for Short, Mid, and Long term rentals.  Ottawa has friendly SRL regulations.  A lot of people from the suburbs buy a vacation home at Heritage Harbor and rent it out when they're not here.  There's also on-site property management.  Check them out: https://www.visitheritageharbo...

[Julie Lin]

Thank you! I’ll have to check this out. Appreciate the response.