Affordable Great Lakes STR

[Nick Peterson]

Hey there, 

With RE prices across seemingly the whole country still going up and up, it's become harder to find affordable STR units with solid returns. From CA to FL to GA to TX to Smokies, etc, we've seen ATH prices. Which leads me to the Great Lakes areas.

There seem like many great, affordable STR markets in the Great Lakes region. Obviously the returns will be less than a highly competitive market like Joshua Tree, Smokies, etc. But the GL area offers affordable options and seem like a lower risk hedge against crazy prices elsewhere.

I have two questions for those who are familiar with Great Lakes STR Markets:
1. Which markets do you see as the best going into Spring/Summer 2022? I've looked from Two Harbors, MN to Michigan City, IN to Traverse City, MI. There are so many options that I've got some Analysis Paralysis. I'd like to be close to a lake and preferably within 2-3 hours of a large city (Chicago, Detroit, Milwaukee, MLPS). Other than that, totally open.

2. How sharp is the seasonal drop-off? Most occupancy forecasts I've ran are ~60-70% annual occupancy which is still pretty great. However, I want to be aware of that aspect of these markets.

Thank you in advance!

[Andrew Moore]

With the amount of coast line in Michigan there are an insane amount of opportunities for STR.

Traverse City is a great area with Tourist attractions. There is some drop off during the winter months, but also a big enough city where there are still some things people do up there during the winter. Close to the UP, so some people use it as a stopping point before going north to Snow Mobile, Ice fish etc. Also, a decent size city, so it doesn't necessarily clear out during the winter like some of the smaller options. 

Grand Haven/Holland/Saugatuck can have great options, and in most cases are going to be a bit more cost effective. On the coast of Lake Michigan, so absolutely gorgeous during the summer & still a sizable economy during the winter months to keep some people coming (However, you will not have the traffic you do during the summer months). South Haven is another similar city to these, but I feel your drop off will be more severe.

New Buffalo is a great little town, you will get a lot of traffic from people trying to escape Chicago for a long weekend during the summer. Fairly steep seasonal drop off here tho.

There are tons of other little cities around that have great opportunities, these are just some of the more well known ones in Michigan.