Best up north Michigan cities for Short Term Rentals

[Vera B.]

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!

[Mark Miles]

Originally posted by @Vera B.:

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