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Short-Term Rentals

Short-Term Rental Investment Guide: Southwest Michigan

Investing in Southwest Michigan real estate offers strong potential for both cash flow and long-term appreciation. Success depends on understanding return on investment (ROI), rental potential, and local short-term rental (STR) regulations.

 

I’m Amy O’Sullivan, Jaqua Realtors. With over 20 years of experience—and more than a decade as South Haven’s top-selling broker—I provide investors with the insight and guidance needed to make confident, profitable decisions. My clients rely on me not only for property listings but also for strategic guidance on ROI, rental performance, and compliance with every community’s STR rules.

• Top-selling broker in South Haven for 13+ years

• Expertise in ROI analysis and rental potential

• Comprehensive knowledge of local STR regulations

• Guidance through licensing, occupancy limits, and property management

• Connections to trusted local professionals

Every investor has different goals. Whether your focus is high seasonal income, steady year-round returns, or personal use with rental revenue, I provide the data and insights you need to make informed decisions:

 

• Comparative rental analysis and nightly rate trends

• Seasonal occupancy patterns and revenue projections

• Strategic guidance on property management and operational costs

• Neighborhood analysis to optimize ROI while maintaining compliance

Navigating Local STR Regulations & Community Highlights

Each community along the Lake Michigan shoreline manages STRs differently. Compliance is critical to ensure profitability and avoid penalties. I guide investors through licensing, occupancy limits, minimum stay requirements, and other local rules.

South Haven City

South Haven, with its picturesque beaches, bustling downtown, and charming shops and restaurants, has long been a favorite destination for visitors looking for a memorable getaway. Short-term rental properties here are a popular option for enjoying everything the area has to offer.

Key STR Rules:

License Required: Yes (Class I and Class II)

  • Class I (Business): Unlimited Rental Terms, max 2 rental stays per 7-day period
  • Class II (Personal): Up to 6 rental terms or 28 days per year; dates must be submitted prior to guest arrival
  • Occupancy Limit: 2 per bedroom + 2 per finished floor (max 12)
  • Minimum Stay: 2 nights (Class I), 3–27 nights (Class II)
  • Turnover Limit: 1 per week
  • Local Agent: Required within 45 miles
  • Quiet Hours: 11 PM – 7 AM
  • Local Agent: Required within 45 miles
Learn More

South Haven Township

Investor Insight: Limited to single-family homes, making this area ideal for long-term rentals or seasonal income while avoiding neighborhood conflicts.

Key STR Rules:
  • License Required: Yes (annual registration)
  • Occupancy Limit: 2 per bedroom + 2 per finished floor (max 12)
  • Minimum Stay: 3–27 nights(max 12)
  • Turnover Limit: 1 per week
  • Local Agent: Required
  • Liability Insurance: $1,000,000 minimum
  • Quiet Hours: 11 PM – 7 AM
  • Additional Requirements: Smoke detectors in bedrooms, CO detectors on each floor, fire extinguisher on each floor, compliance with zoning ordinances
Learn More

Casco Township

Investor Insight: Close to South Haven, this area offers steady rental demand with simpler licensing requirements.

Known for its quiet, rural setting and proximity to lakes, Casco Township offers a peaceful retreat to travelers seeking a slower pace.

Key STR Rules:
  • License Required: Yes (annual registration)
  • Occupancy Limit: 2 per bedroom + 2 per finished floor (max 12)
  • Minimum Stay: 3 nights
  • Turnover Limit: 1 per week
  • Local Agent: Required
  • Liability Insurance: $1,000,000 minimum
  • Quiet Hours: 11 PM – 7 AM
  • Properties without public water/sewer require septic inspection
Learn More

Saugatuck

Investor Insight: Popular arts and waterfront destination. ROI is strong, but keep in mind the 20% cap in R-1 zones and grandfathering rules.

Saugatuck draws visitors with its vibrant art scene, waterfront views, and charming downtown streets. Short-term rentals here offer a convenient way to immerse yourself in everything the city has to offer.

Key STR Rules:
  • License Required: Yes (annual)
  • Occupancy Limit: 2 per bedroom + 2 per finished floor (max 12)
  • Minimum Stay: 3 nights
  • Turnover Limit: 1 per week
  • Local Agent: Required within 25 miles
  • Quiet Hours: 11 PM – 7 AM
  • Local Agent: Required within 45 miles
  • Liability Insurance: $1,000,000 minimum
  • Advertising: STR license number must appear in all listings
  • Cap: Max 20% of units in R-1 zones
  • Accessory Dwelling Units (ADUs): Not subject to the 20% cap but still require a STR license
Learn More

Covert & Coloma Townships

Investor Insight: Great for year-round rental opportunities, with rules designed to protect neighborhoods while enabling seasonal rentals.

Situated between South Haven and St. Joseph, Covert Township and Coloma provide a tranquil rural escape, with easy access to lakes, parks, and small-town charm.

Key STR Rules:
  • License Required: Yes (annual Short-Term Rental Permit)
  • Occupancy Limit: Not specified; rentals < 31 days are STRs
  • Minimum Stay: Not specified
  • Turnover Limit: 1 per week
  • Local Agent: Required
  • Liability Insurance: $1,000,000 minimum
  • Additional Requirements: Septic inspection required if not on public sewer/water
Learn More

St. Joseph

Investor Insight: City offers flexible investment opportunities, but zoning differences make it crucial to verify each property’s STR compliance.

St. Joseph, set along the scenic St. Joseph River, combines beautiful beaches, historic streets, and lively cultural events, making it a highly desirable spot for visitors.

Key STR Rules:
  • License Required: Yes (annual business license)
  • Zoning: STRs allowed in W (Water Recreation) and D (Downtown) districts; Conditional Use Permit required in R-3 zones
  • Inspection: Required before license issuance and renewal
  • First-Floor Rentals: Not allowed in downtown area
Learn More

Recent Regulatory Updates & Strategic Insights

STR regulations continue to evolve. Notable updates include:

Mandatory conversion of existing STRs into the new licensing protocol; 20% cap on housing stock for STRs. southhavenmi.gov

STR rules apply only to single-family homes to mitigate neighborhood impacts. southhaventwp.com

20% cap on STRs in R-1 zones; grandfathering of existing STRs; license number disclosure required in advertising. City of Saugatuck

Note: While these areas share similar regulations, it’s always best to check with local authorities before renting to ensure compliance with the most current rules.

Amy O'Sullivan South Haven, MI Real Estate Agent Headshot

Work With Amy O’Sullivan

I provide more than property listings; I deliver insight, guidance, and a strategic approach to investing in Southwest Michigan. With my expertise in ROI analysis, rental potential, and STR regulations, you’ll have a partner dedicated to maximizing your investment success.

Contact Me Today:
Amy O’Sullivan | Jaqua Realtors | (269) 214-1257

Work With Amy

Put her deep local roots and real estate expertise to work for you. Amy provides invaluable insight into the South Haven community, guiding her clients to make informed and confident decisions. Connect with her for authentic, personalized service.

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