West Michigan Real Estate Blog | Luke Bouman Team

By Luke Bouman | Luke Bouman Real Estate Team | June 2026

West Michigan waterfront property generates some of the strongest short-term rental income of any Midwest destination, driven by Chicago proximity, Lake Michigan's reputation, and a summer visitor market that has grown consistently for decades. But waterfront investment is not uniform across the region. Rental regulations vary by municipality, seasonal income patterns require specific financial modeling, and waterfront due diligence involves considerations that general investment real estate does not.

Which West Michigan Markets Allow Short-Term Rentals

Saugatuck, Douglas, and Saugatuck Township have active STR markets but the city and township each have their own regulations. South Haven has implemented permit limits -- existing permits carry premium value. Holland and Grand Haven have STR ordinances with permit requirements. Inland lake communities vary significantly by township. Never assume STR is permitted. Verify with the specific municipality before purchasing for rental income.

The Seasonal Income Reality

West Michigan waterfront rentals are strongly seasonal. June, July, and August represent 70 to 80 percent of annual rental income on most properties. May and September are shoulder months. October through April is low season for most properties. Annual revenue projections should be built on realistic seasonal occupancy rather than applying summer rates to 12 months.

Cap Rate Expectations

West Michigan waterfront cap rates for short-term rental properties typically run 4 to 7 percent on purchase price depending on location, regulations, and property management approach. Properties in South Haven and Saugatuck with existing STR permits and established rental histories produce the most predictable income.

What to Verify Before Buying for Investment

• STR permit status. Is the property currently permitted? Is the permit transferable?
• HOA restrictions. Many waterfront associations restrict rental use or minimum rental periods.
• Actual rental history. Request documented income from prior years, not projections.
• Management costs. Professional management runs 20 to 35 percent of gross rental income.
• Waterfront condition. Dock replacement and seawall repair are significant costs that affect net returns.

RSPS certified. Call (616) 344-9923 for a free waterfront investment consultation.

Related: West Michigan Homes with Private Docks | Lake Macatawa Real Estate | South Haven Michigan Real Estate