Debating on which town to buy a modest single family home to Airbnb in Northern (western) Michigan. Holland, Muskegon, Charlevoix, or Petoskey?? Anyone visit or have an opinion? Thanks in advance!
Hey Vera! So, look, I'm gonna say this as nicely as possible and of course to each their own: you can only invest every dollar once, you should invest it where you can make the absolute highest return, and that is certainly not Northern Michigan. And that is also why I don't invest in or near my hometown either. Because the highest ROI is about 1000 miles away from me where I own a number of properties that make a ton of money
I tend to buy in the Southern half of the US for 3 reasons:
1) you get much higher year-round occupancy rates in the South & it’s simply tough to earn a good ROI in the North if your place sits vacant for a big chunk of the year
Slow season in the south is that 6-week period when occupancy drops to 50%. Slow season in the north is that 7-month period when no one books.
2) Culturally, the Southern half of the US seems to be a lot more accepting of STRs regulation-wise. A lot of these southern beach & mountain towns have been supporting STR for 75+ years, long before Airbnb was a thing, so they're very comfortable with it and it's a built-in part of the community.
3) The Southern half of the US is more forgiving if your property is out of service for a couple months (a flood, property damage, coronavirus) bc you earn year-round revenue. People in the north can get really screwed if, for example, their property is out of service during the peak summer season when they would typically earn all of their revenue
A lot of Northern places are FREAKING OUT over STRs & STR regulations & they don’t seem to be very supportive of it. So, in the North, best case you’re fighting an uphill battle with a lot of uncertainty. Worst case, it gets outlawed in a town AFTER you’ve bought a place there & now you have to sell at a HUGE loss bc there’s no buyer demand once STR use is banned! I’ve seen it happen...
Anyway, there’s some great resources on the internet that show the amazing numbers you can earn on STR down south. Once you see the STR data on these various southern towns, you’ll see that you simply can’t get annual revenue, annual occupancy rates, annual net income, & annual ROI like this in the north.
If you pick the right spot down south, a 3+ BR house can bring in anywhere from $100k-$250k per year. As I said, you can only invest every dollar once. I am fairly certain that Northern Michigan won’t pull in this kind of money...
You may have heard a lot recently in the news about the Southern strategy, it’s a strategy for winning a presidential election. Well I have a southern strategy too, it’s a strategy for making a ton of money & it goes like this: buy a bunch of vacation rentals down south & then you’ll make a lot of money
@Vera B. NW Michigan and you live in NY?
@mark miles I’ll let you take this one
Debating on which town to buy a modest single family home to Airbnb in Northern (western) Michigan. Holland, Muskegon, Charlevoix, or Petoskey?? Anyone visit or have an opinion? Thanks in advance!
Hey Vera! So, look, I'm gonna say this as nicely as possible and of course to each their own: you can only invest every dollar once, you should invest it where you can make the absolute highest return, and that is certainly not Northern Michigan. And that is also why I don't invest in or near my hometown either. Because the highest ROI is about 1000 miles away from me where I own a number of properties that make a ton of money
I tend to buy in the Southern half of the US for 3 reasons:
1) you get much higher year-round occupancy rates in the South & it’s simply tough to earn a good ROI in the North if your place sits vacant for a big chunk of the year
Slow season in the south is that 6-week period when occupancy drops to 50%. Slow season in the north is that 7-month period when no one books.
2) Culturally, the Southern half of the US seems to be a lot more accepting of STRs regulation-wise. A lot of these southern beach & mountain towns have been supporting STR for 75+ years, long before Airbnb was a thing, so they're very comfortable with it and it's a built-in part of the community.
3) The Southern half of the US is more forgiving if your property is out of service for a couple months (a flood, property damage, coronavirus) bc you earn year-round revenue. People in the north can get really screwed if, for example, their property is out of service during the peak summer season when they would typically earn all of their revenue
A lot of Northern places are FREAKING OUT over STRs & STR regulations & they don’t seem to be very supportive of it. So, in the North, best case you’re fighting an uphill battle with a lot of uncertainty. Worst case, it gets outlawed in a town AFTER you’ve bought a place there & now you have to sell at a HUGE loss bc there’s no buyer demand once STR use is banned! I’ve seen it happen...
Anyway, there’s some great resources on the internet that show the amazing numbers you can earn on STR down south. Once you see the STR data on these various southern towns, you’ll see that you simply can’t get annual revenue, annual occupancy rates, annual net income, & annual ROI like this in the north.
If you pick the right spot down south, a 3+ BR house can bring in anywhere from $100k-$250k per year. As I said, you can only invest every dollar once. I am fairly certain that Northern Michigan won’t pull in this kind of money...
You may have heard a lot recently in the news about the Southern strategy, it’s a strategy for winning a presidential election. Well I have a southern strategy too, it’s a strategy for making a ton of money & it goes like this: buy a bunch of vacation rentals down south & then you’ll make a lot of money
I live in Northern Michigan, near the Traverse City area, both sides, and I greatly appreciate your points of view, Mark. There are some people that have good luck year-round but like you said we do have more seasonal visitors. And while an STR has kind of been on my want to do list the regulatory actions up here scare the heck out of me.
Hi Melody,
I currently live in Holland, MI and I have a rental property here. I think Holland would be a great place to have rental properties. It's the city of Tulips and it's close to Hope College. I wouldn't recommend Muskegon only because of the crime rates and neighborhood grade, but it's a great opportunity if you're up for any challenges! Traverse City is also an excellent location to have rental properties. Even if you can't rent out your properties, they would be great AirBnB properties. If you need more information in the Michigan area, feel free to message me.
Have fun investing!
Ok so I will say Mark has some really good points, however I am a Midwest girl investing in the Midwest because it is familiar and drivable and we took family trips there when I was growing up. @Vera B. is there a personal reason you have your eye on northern Michigan (family there, visit often, etc.)?
I will say that northern Michigan has done pretty well with rentals post-Covid. I have friends investing up there in Harbor Springs, which was recently voted in a study as one of the top 25 places to buy a vacation home based on home sales and vacation rental performance data. Traverse City is also a very popular spot for vacation rentals. Golf, ski, woods, lake, and outdoor activities draw people to northern MI. Heading south, we looked at investing in Holland, it's a great area with the state park, Dutch village, and tulip festivals. 2 reasons we didn't invest there: the beach and downtown area are not near each other and we wanted to be closer to the Chicago area. We settled a little further south with our STRs in southwest Michigan. The rentals in SW MI have had high occupancy as people working and schooling remotely have taken more "flexcations" away from the cities. Happy to connect if you have any questions about SW MI or STRs in general!
A friend of mine runs a STR management company in Travers City. That market is on FIRE right now!! They keep adding new units, and their houses are always full. I am sure they would be happy to help point you in the right direction. Let me know if you would like to connect.
@Vera B. We are in South Haven, but Saugatuck, St. Joe, and New Buffalo are also popular markets. There are rental ordinances in place in these areas, so be sure to have a realtor in the area that is knowledgeable of those rental regulations to guide you to the right property. Let me know if you'd like a recommendation!
Hi @Melissa Wesling, thanks for the good value on this post- I actually just shot you an email to connect.
@Vera B., did you end up investing in Northern Michigan or are you still looking at different markets? Would love to connect as I’m in a similar boat for the area.
@Mark Miles you have some great points here which certainly makes me want to look more South, like Florida for example. Living in Michigan though, as a first time investor would certainly offer benefits for me to buy a drivable distance from home. Although a serious event like a flood could certainly wipe a STR's seasonal income away for the year, some northern markets still get decent traction for, say skiing. If the annual numbers work, over 30% CoC, it's got to be worth giving it a look right?
Thanks to all for chiming in here!
Vera,
As Mark pointed out and as you're aware, Michigan has some quirky zoning ordinance issues that don't plan on going away anytime soon. Our family has a summer home in Glen Arbor, and we've noticed growing demand in that area, due mostly to the National Lakeshore park as well as growing tourist franchises (CR, M22) with plans of expanding to more towns. Back of the envelope math of Leelanau County will show you relative cap rate compression over the last two-three years, which is a little odd given the circumstances of rising demand near the Upper Peninsula (~11%). One observation I will note is the immense growth in vineyards and wineries in Traverse City - I feel as though that'll be fruitful in the long-run. My two cents - any town within a Petsokey stone's throw away from the Lake should cash flow a modest return. My top three - Traverse City, Charlevoix, Glen Arbor.
Tyler Mulcahy, MBA
@Vera B.
Hi Vera,
I'm new to BP, but I run a vacation rental mgmt company in Traverse City. It is a great place to invest (we own our own rental here), but you do need to know the regulations in the areas you're looking. While downtown Traverse City is not allowing new STR licenses, there are several townships that have STR regulations in place and it's very straightforward to get your home licensed. Happy to talk more and point you toward some areas that would be good to keep an eye on.
Beth
@Beth Schrider
Interesting, I’d love to hear about the market up north. My wife and I have a vacation rental very close to Crystal Mountain and has been renting out like crazy. We’re looking for another property, maybe in the Traverse City. We are also looking in Petoskey.
Boyne Falls. Charlevoix. Suttons Bay. Bellaire. Traverse City. Harbor Springs.... It's all good! Just make sure you know who's going to clean it and take care of it.
@Ryan Burke
I am not surprised Crystal Mountain area is doing well! That is great to hear. We haven’t gotten as far as Petoskey, but we manage several properties in Traverse City and the surrounding area. Waterfront homes do quite well here if you can find one in the right areas. The market is very interesting right now - we were used to seeing mostly summer / fall bookings, but this winter we are seeing lots of January and February bookings at all the properties. With so many restaurants and wineries setting up outdoor heated seating, I think it’s drawing more people to the area for winter vacations. I’m sure all the remote work right now is making this year a little different too. Most of our owners make their profits on summers alone though.
What's the best way to find out if certain areas in the Traverse City Leelanau Glen Arbor have restrictions on short term rentals ? Call the local township hall?
@rex
@Rex Anderson you should able to open this link. Short Terms Rentals this will provide information on STR's in GT County, Leelanau, Wexford, Benzie and Antrim.
@Melissa Wesling - do you have any insight on Niles/Howard Township STR restrictions? I'm getting conflicting information and I can't find a straight forward answer on the township website. Thanks!
@Laura John, this is the story of my life with Michigan townships and the lack of clear information online. Your best bet at that point is to call the township directly to try and get an answer and build a relationship.
@Vera B.
The best cities are those that get strong year round traffic normally up north close to a ski resort and or/lake. If its within 30 miles of a ski resort and on a lake thats the best combination but also not cheap in my opinion.
@Beth Schrider I am looking to invest in traverse city. Do you know if condos in 45 trailside will be long term zoned for str?
@Courtney Radmall As far as I'm aware (based on my local realtor's advice), Trailside 45 "should" be safe for STR for the foreseeable future. We are closing on a unit in less than a month for our first STR and are cautiously optimistic 🤞.
A friend of mine runs a STR management company in Travers City. That market is on FIRE right now!! They keep adding new units, and their houses are always full. I am sure they would be happy to help point you in the right direction. Let me know if you would like to connect.
Hey Ben, I am currently researching the TC market to buy a SFH to rent as a STR. I would like to chat up your friend if they are willing. Thank you
Debating on which town to buy a modest single family home to Airbnb in Northern (western) Michigan. Holland, Muskegon, Charlevoix, or Petoskey?? Anyone visit or have an opinion? Thanks in advance!
Hey Vera! So, look, I'm gonna say this as nicely as possible and of course to each their own: you can only invest every dollar once, you should invest it where you can make the absolute highest return, and that is certainly not Northern Michigan. And that is also why I don't invest in or near my hometown either. Because the highest ROI is about 1000 miles away from me where I own a number of properties that make a ton of money
I tend to buy in the Southern half of the US for 3 reasons:
1) you get much higher year-round occupancy rates in the South & it’s simply tough to earn a good ROI in the North if your place sits vacant for a big chunk of the year
Slow season in the south is that 6-week period when occupancy drops to 50%. Slow season in the north is that 7-month period when no one books.
2) Culturally, the Southern half of the US seems to be a lot more accepting of STRs regulation-wise. A lot of these southern beach & mountain towns have been supporting STR for 75+ years, long before Airbnb was a thing, so they're very comfortable with it and it's a built-in part of the community.
3) The Southern half of the US is more forgiving if your property is out of service for a couple months (a flood, property damage, coronavirus) bc you earn year-round revenue. People in the north can get really screwed if, for example, their property is out of service during the peak summer season when they would typically earn all of their revenue
A lot of Northern places are FREAKING OUT over STRs & STR regulations & they don’t seem to be very supportive of it. So, in the North, best case you’re fighting an uphill battle with a lot of uncertainty. Worst case, it gets outlawed in a town AFTER you’ve bought a place there & now you have to sell at a HUGE loss bc there’s no buyer demand once STR use is banned! I’ve seen it happen...
Anyway, there’s some great resources on the internet that show the amazing numbers you can earn on STR down south. Once you see the STR data on these various southern towns, you’ll see that you simply can’t get annual revenue, annual occupancy rates, annual net income, & annual ROI like this in the north.
If you pick the right spot down south, a 3+ BR house can bring in anywhere from $100k-$250k per year. As I said, you can only invest every dollar once. I am fairly certain that Northern Michigan won’t pull in this kind of money...
You may have heard a lot recently in the news about the Southern strategy, it’s a strategy for winning a presidential election. Well I have a southern strategy too, it’s a strategy for making a ton of money & it goes like this: buy a bunch of vacation rentals down south & then you’ll make a lot of money
Hi Mark,
It is quite obvious you have never ventured any higher than the 45th Parallel. The gorgeous Tip-o-the-Mitt has multitudes of great boating, sailing, fishing, sail boarding, wreck diving, hiking, biking, music and art in the park and navel gazing opportunities from early spring to late fall. The color that blankets this area in Fall is nothing less than breath-taking. The bounty from all the farms means scrumptious, organic fruits and veggies available to professional and home chefs alike. Winter host 3 fantastic ski resorts, miles upon miles of snowmobile trails, snow shoe trails, cross country trails, sleigh rides and toasty bonfires and hot chocolate. Spring brings brilliant wildflowers, budding trees, lovely morel mushrooms and the joyful antics of the wildlife youngsters. Oh, did I mention the delectable plethora of restaurants and pubs, the many art galleries, museums and theatres, the seasonal festivals? There is ALWAYS something happening that is inclusive for everyone.
Absolute fistfuls of money to made with equivalent or better incomes than you quote. Sorry you missed out on the opportunities!
Debating on which town to buy a modest single family home to Airbnb in Northern (western) Michigan. Holland, Muskegon, Charlevoix, or Petoskey?? Anyone visit or have an opinion? Thanks in advance!
Hi Mark,
It is quite obvious you have never ventured any higher than the 45th Parallel. The gorgeous Tip-o-the-Mitt has multitudes of great boating, sailing, fishing, sail boarding, wreck diving, hiking, biking, music and art in the park and navel gazing opportunities from early spring to late fall. The color that blankets this area in Fall is nothing less than breath-taking. The bounty from all the farms means scrumptious, organic fruits and veggies available to professional and home chefs alike. Winter host 3 fantastic ski resorts, miles upon miles of snowmobile trails, snow shoe trails, cross country trails, sleigh rides and toasty bonfires and hot chocolate. Spring brings brilliant wildflowers, budding trees, lovely morel mushrooms and the joyful antics of the wildlife youngsters. Oh, did I mention the delectable plethora of restaurants and pubs, the many art galleries, museums and theatres, the seasonal festivals? There is ALWAYS something happening that is inclusive for everyone.
Absolute fistfuls of money to made with equivalent or better incomes than you quote. Sorry you missed out on the opportunities!
You realize that you are replying to a 3 year old post, right?!