Thinking about buying a vacation rental near Petoskey, Harbor Springs, Mackinaw City, Burt Lake, Mullett Lake, or Cheboygan? Before you make an offer, there is one question that should be answered before you fall in love with the property:

Can this specific property legally be used as a short-term rental?

The answer is not always as simple as checking whether a home is currently listed on Airbnb or VRBO.

Across Northern Michigan, short-term rental regulations can change from one city or township to the next. In some locations, STRs are broadly permitted. In others, they require a license, may be limited to certain zoning districts, subject to a cap, or may lose grandfathered status when a property is sold.

For a buyer who plans to use rental income to help justify a purchase, short-term rental eligibility should be treated as part of the due diligence process—not something to figure out after closing.

This guide provides an overview of the current regulatory landscape in Emmet County and Cheboygan County and the questions every prospective vacation rental buyer should ask.

Important: Ordinances, zoning maps, permit availability, and local interpretations can change. This article is intended as a practical buyer’s guide and is not legal advice. Always confirm the current status of the specific parcel directly with the applicable zoning administrator before removing contingencies or closing on a property.

The First Rule: The Property Address Matters More Than the Listing Description

A home advertised as a:

“successful Airbnb”
“vacation rental”
“investment property”
“income-producing cottage”

is not automatically guaranteed to remain a legal short-term rental after you buy it.

A buyer should determine:

What municipality is the property actually located in?
What is the parcel’s current zoning designation?
Are STRs permitted in that zoning district?
Is a license, registration, permit, inspection, or special approval required?
Is there a cap or waiting list?
Does an existing STR approval transfer to the new owner?
Are there HOA, condominium, deed restriction, or private covenant restrictions?

That last question is especially important. Even when local zoning permits short-term rentals, a homeowners association or deed restriction may prohibit them. Many vacation rentals owners up here have purchased and run their STR for years, only to have their association finally decide to start enforcing the “single family residence” or “no commercial business” clauses in their by-laws.

Before you buy, ALWAYS, ALWAYS, have your real estate agent pull the deed restrictions, and read through the association by-laws yourself and TALK to people.

We also highly recommend talking to the township supervisor to get the ‘temperature’ of the board.

Here’s a gem for you…in Michigan, if a property is zoned commercially, it is in most cases exempt from STR regulations. You’re welcome.

Short-Term Rentals in Emmet County

Emmet County includes some of Northern Michigan’s most desirable vacation rental markets, including Petoskey, Harbor Springs, Bay Harbor, Crooked Lake, Walloon Lake, Cross Village, Mackinaw City-area communities, and numerous lakefront and rural townships.

The regulatory picture, however, is not uniform.

Emmet County maintains a county zoning ordinance, while some townships and incorporated cities have their own zoning authority. The county’s zoning ordinance itself should not be interpreted as a blanket guarantee that every property can operate as an STR; buyers still need to determine which zoning authority governs their specific parcel and how the applicable ordinance treats the proposed use.

City of Petoskey: One of the Most Important Places to Verify Before Buying

Petoskey has one of the more structured short-term rental regulatory systems in the region.

The city requires an STR license for each dwelling unit used as a short-term rental. Licenses are issued annually, and applicants must provide information including ownership and local-agent information, bedroom and occupancy information, parking details, insurance, and compliance certifications. STR properties are also subject to inspection and applicable building, property maintenance, and fire code requirements.

Perhaps most importantly for a buyer, zoning matters.

Petoskey’s regulations distinguish between districts where STRs are a principal permitted use and districts where they are not. Properties that were legally operating before the city’s regulatory changes may have grandfathered status, but that status can be lost upon property transfer, license lapse, or revocation.

What this means for a buyer

If you are considering a Petoskey property because the seller currently operates it as an Airbnb or VRBO, ask:

Is the property currently licensed?
Is it located in a district where a new STR license can be issued?
Is the property grandfathered?
Does the grandfathered status terminate upon sale?
Is there currently license availability or a waiting list?

Do not assume that “currently operating as an Airbnb” means you will be able to continue operating it after closing.

The best starting point is the City’s current STR code and zoning requirements. City of Petoskey short-term rental regulations

Harbor Springs: STRs Are Permitted, but Licensing Is Required

The City of Harbor Springs allows residential properties to be rented on a short-term basis, generally defined as stays of 30 days or less, but the city has established a formal licensing program.

A separate application is required for each rental unit, and unlicensed properties may be subject to fines. Harbor Springs has also adopted a specific STR ordinance and accompanying rules.

Questions buyers should ask in Harbor Springs

Before purchasing, confirm:

Whether the property qualifies for STR use under the current zoning code.
Whether an existing license transfers or a new application is required.
What occupancy, parking, inspection, and local-contact requirements apply.
Whether the property is subject to condominium, HOA, or private restrictions.

Harbor Springs has continued updating its zoning framework, making parcel-specific verification especially important.

City of Harbor Springs Short-Term Rental Program

Emmet County Townships: Do Not Assume All Townships Follow the Same Rules

Outside Petoskey and Harbor Springs, buyers may encounter a mix of county zoning and township-administered zoning.

For example, Friendship Township directs land-use and zoning applicants to Emmet County’s zoning framework, while other townships—including Little Traverse Township and Pleasantview Township—maintain their own zoning ordinances and zoning administration.

This means that two properties only a few miles apart can potentially be subject to different zoning rules and approval processes.

Townships where buyers should perform parcel-specific STR due diligence include:

Bear Creek Township
Bliss Township
Carp Lake Township
Center Township
Cross Village Township
Friendship Township
Littlefield Township
Little Traverse Township
Maple River Township
McKinley Township
Pleasantview Township
Readmond Township
Resort Township
Springvale Township
Wawatam Township
West Traverse Township

The township list itself is not a “yes” or “no” list for STR eligibility. The important takeaway is that the governing zoning authority and the property’s specific district must be identified before purchase. Emmet County and its townships maintain zoning ordinances that should be reviewed at the parcel level.

A special note about West Traverse Township

West Traverse Township has an updated zoning ordinance, amended in January 2026. Buyers considering property in areas around Harbor Springs, M-119, or other parts of West Traverse Township should review the current ordinance rather than relying on an older PDF or previous interpretation.

Short-Term Rentals in Cheboygan County

For vacation rental buyers, Cheboygan County is in some ways easier to understand because the county zoning ordinance covers most of the unincorporated county.

According to the Cheboygan County Planning Commission, county zoning authority covers all townships except Burt Township, as well as areas outside the incorporated City of Cheboygan, Village of Mackinaw City, and Village of Wolverine, which maintain their own zoning authority.

This distinction is extremely important.

In Most Cheboygan County Townships, STRs Are Permitted

The current Cheboygan County Zoning Ordinance states in Section 3.18 that short-term rentals are permitted uses in all zoning districts. The ordinance defines short-term rentals separately, with stays generally involving periods of less than 30 days.

That potentially makes many parts of unincorporated Cheboygan County attractive for prospective vacation rental buyers.

Areas covered by county zoning include many popular vacation rental markets such as:

Aloha Township
Beaugrand Township
Benton Township
Ellis Township
Forest Township
Grant Township
Hebron Township
Inverness Township
Koehler Township
Mackinaw Township
Mentor Township
Mullett Township
Tuscarora Township
Walker Township
Waverly Township
Wilmot Township

The county’s jurisdiction does not replace parcel-specific due diligence. Shoreline regulations, setbacks, septic capacity, parking, nuisance rules, floodplain issues, and other land-use requirements can still affect the property’s use and future improvement plans. The county specifically directs buyers and property owners to obtain an official zoning determination rather than relying solely on a general map.

Why this can be attractive to STR buyers

For an investor looking at properties around:

Mullett Lake
Burt Lake
Black Lake
Indian River
Topinabee
inland lakes
snowmobile trail systems
rural waterfront

the county-wide allowance for STRs can create more opportunity than a city with strict licensing caps or residential-zone restrictions.

But remember: “permitted” does not mean “ignore everything else.”

A home may still have limitations related to:

septic system capacity
number of legal bedrooms
shoreline development
parking
occupancy
private road access
deed restrictions
condominium rules
nuisance regulations

Burt Township: A Separate Set of Rules

Burt Township in Cheboygan County has its own zoning authority and should be evaluated separately from the county-wide zoning ordinance.

The township’s current materials provide a separate STR ordinance. The published requirements include registration, emergency contact information, off-street parking, occupancy limitations tied to sleeping capacity, egress requirements, smoke alarms, a fire extinguisher, and multiple means of exit.

Buyer takeaway

If you are considering a property on or near Burt Lake, don’t simply rely on the fact that Cheboygan County generally permits STRs.

Confirm directly with Burt Township:

current registration requirements
current fees
occupancy standards
whether the property meets safety requirements
whether any additional zoning approval is necessary

The township maintains its own zoning and property resources. Burt Township, Cheboygan County zoning resources

City of Cheboygan: Zoning and Permits Require Careful Review

The City of Cheboygan has been actively addressing short-term rental regulations.

In 2025, the City Council approved a revised STR ordinance approach that included a cap of 12 STR permits and language providing that STRs would be permitted outside residentially zoned districts. City planning records also show enforcement action involving a property operating as an STR in an R-1 district.

The city’s published draft ordinance defines STRs as residential dwellings rented for periods of 30 consecutive days or less and indicates that STRs would not be permitted in residential zoning districts.

What buyers should do

The City of Cheboygan is a location where I would strongly recommend getting the answer in writing before closing.

Ask:

What is the property’s current zoning?
Are STRs currently permitted in that district?
How many permits are currently available?
Is the cap currently full?
Can the seller’s permit transfer?
Does the property have any existing legal nonconforming or grandfathered status?

Because the city has recently revised its STR framework, buyers should verify the current ordinance and permit availability directly with the City rather than relying on a real estate listing or an older Airbnb listing.

Village of Mackinaw City: STRs Are Not Allowed in Several Residential Districts

Mackinaw City has a clear zoning-based approach.

According to the Village’s current zoning FAQ, short-term rentals of 30 days or less are prohibited in R-1, R-2, and R-3 residential districts.

They are permitted in:

AG Agricultural
CR Conservation & Recreation
B-1 Business
B-2 Waterfront Business
B-3 Gateway Business
B-4 Historic Business
BC Business Central

The Village warns that violations may result in enforcement action and fines.

This is a major consideration for Mackinaw City buyers

You could find two nearly identical homes—one legally rentable on Airbnb and one completely prohibited from short-term rental use—simply because they sit in different zoning districts.

Never assume a property near Mackinaw City is eligible just because it is close to tourist attractions.

Village of Mackinaw City STR and zoning FAQ

What About the Other Cities and Villages?

The most important distinction is whether the property falls under:

Cheboygan County zoning
Burt Township zoning
City of Cheboygan zoning
Village of Mackinaw City zoning
Village of Wolverine zoning

Cheboygan County specifically identifies these jurisdictions as having separate zoning authority from the county system.

For properties near a municipal boundary, this matters enormously. A listing may say “Indian River,” “Mackinaw area,” or “Cheboygan area,” but the mailing address does not necessarily tell you which government controls the property’s land use.

Always verify the actual parcel jurisdiction.

10 Questions Every Northern Michigan Vacation Rental Buyer Should Ask

Before writing an offer—or at minimum before the end of your inspection and due diligence period—ask these questions.

1. Is short-term rental use currently permitted on this specific parcel?

Don’t ask whether Airbnb is allowed “in the area.”

Ask whether this parcel is eligible.

2. What is the property’s zoning designation?

Request the exact zoning district.

Then review the current ordinance.

3. Does the property need an STR license or permit?

Find out whether you need:

annual registration
annual licensing
inspections
local agent designation
insurance documentation
safety certification
special use approval

4. Is there an STR cap?

This can dramatically affect investment value.

A property may be located in a community that technically allows STRs, but if the permit cap is full, you may be waiting for an opening.

5. Does an existing license transfer to a buyer?

Never assume that an existing license survives a sale.

Petoskey’s ordinance, for example, specifically addresses the loss of certain grandfathered eligibility and licensing status upon property transfer.

6. Is the property grandfathered?

If the answer is yes, ask:

What exactly is grandfathered?
Does that status transfer?
What happens if the property changes ownership?
What happens if the rental operation pauses?

7. Does the septic system support your planned occupancy?

This is especially important for waterfront and rural properties.

A beautiful five-bedroom listing may not necessarily have a septic system approved for the number of guests you plan to host.

8. Are there private restrictions?

Review:

HOA bylaws
condominium documents
deed restrictions
subdivision covenants
private road agreements

A private restriction can prevent STR use even if local zoning permits it.

9. Are there parking limitations?

Lakefront properties and older cottages may have limited parking.

Some STR regulations specifically require designated off-street parking.

10. Can you get the answer in writing?

This may be the most important question of all.

When rental income is part of your purchase decision, ask the zoning administrator for written confirmation of the property’s current eligibility.

A Smart STR Purchase Strategy: Add an STR Contingency

If a property’s ability to operate as a vacation rental is essential to your purchase decision, consider discussing an STR eligibility contingency with your real estate agent and attorney.

The goal is to avoid this scenario:

You close on a $700,000 lake house based on projected Airbnb income—then discover that the property cannot legally be rented on a short-term basis under the current zoning rules.

A proper due diligence period should include:

zoning verification
STR permit verification
license availability
transferability of existing approvals
HOA and deed restriction review
septic and occupancy evaluation
insurance availability
local tax considerations
realistic revenue analysis

The Bottom Line for Northern Michigan Vacation Rental Buyers

Emmet and Cheboygan Counties offer tremendous opportunities for vacation rental ownership—but they are not one uniform STR market.

Generally speaking:

Petoskey requires careful review of zoning, licensing, caps, and grandfathered status.
Harbor Springs permits STRs through a licensing program and requires property-specific compliance.
Emmet County townships can fall under different zoning authorities, making township and parcel-level research essential.
Most unincorporated Cheboygan County townships covered by County Zoning Ordinance No. 200 permit short-term rentals in all zoning districts.
Burt Township has separate STR and zoning requirements.
The City of Cheboygan has recently tightened and reworked its STR framework, making zoning and permit availability especially important to verify.
Mackinaw City prohibits STRs in several residential zoning districts while permitting them in specified agricultural, conservation, and business districts.

The biggest mistake a prospective buyer can make is assuming that a property’s location in a popular tourist destination automatically makes it a legal vacation rental.

The best investment is not simply a beautiful property.

It’s a beautiful property with a clear path to legally operating, optimizing, and generating revenue as a short-term rental.

Before you buy, verify the zoning. Verify the permit. Verify the restrictions. Then analyze the revenue potential.

That process can protect your investment before you ever receive the keys.