How do I start an Airbnb in Ann Arbor, Michigan?

Confirm the address, zoning district, STR type, and applicant eligibility with the City. Then apply through STREAM, pay the $500 per-unit fee, complete any Certificate of Compliance or inspection requirement, and register applicable taxes before advertising.

How should I screen an Ann Arbor property for short-term rental use?

Verify City limits, zoning, principal-residence status, lawful dwelling and sleeping rooms, open permits, code history, occupancy, parking, association restrictions, insurance, and a lawful fallback use before acquisition.

What local approval does an Ann Arbor Airbnb need?

Every STR inside Ann Arbor needs a City STR license. Non-principal commercial units also need a valid Certificate of Compliance before applying where zoning permits the use.

Are short-term rentals legal throughout Ann Arbor?

No. Principal-residence homestays and whole-house rentals may qualify in residential and mixed-use districts. Non-principal commercial rentals are generally limited to mixed-use districts, and accessory dwelling units are prohibited from STR use.

Does location affect an Ann Arbor STR investment decision?

Yes, but use legal and property-level factors rather than neighborhood popularity claims. City boundaries, zoning, permitted-use classification, residency, lawful occupancy, parking, insurance, and fallback use determine whether a specific address is viable.

What taxes may apply to an Ann Arbor short-term rental?

Michigan generally applies 6% use tax to covered public lodging. Washtenaw County publishes a 5% accommodation excise tax but has classification-specific exemptions, so confirm the property, rental pattern, platform collection, and filing duties with both authorities.

What costs should I include when underwriting an Ann Arbor Airbnb?

Include the $500 annual license for each unit, any Certificate of Compliance or inspection work, taxes, insurance, utilities, maintenance, safety upgrades, platform charges, management, and professional advice.

How should I evaluate Ann Arbor Airbnb profitability?

Build a property-specific model using verified comparable bookings and conservative assumptions. Deduct licensing, taxes, insurance, utilities, maintenance, management, vacancies, capital reserves, and financing rather than relying on citywide earnings claims.

What ROI should I expect from an Ann Arbor Airbnb?

No official source establishes a typical Ann Arbor Airbnb ROI. Calculate return for the exact property from documented acquisition cost, lawful capacity, achievable revenue evidence, operating expenses, financing, taxes, and fallback value.

Who can help evaluate an Ann Arbor short-term rental property?

Ann Arbor Rental Housing Services confirms licensing requirements, Planning confirms zoning, Washtenaw County and Michigan Treasury address taxes, and qualified legal, tax, insurance, and property professionals can evaluate acquisition risk.

Ann Arbor, MI Airbnb Guide

Decision point

Ann Arbor STR Investment Decision

Treat license eligibility, zoning, residency, inspection, taxes, and lawful fallback use as acquisition contingencies.

Confirm the street address is inside Ann Arbor city limits and identify its zoning district.
Determine whether the proposal is a principal-residence homestay, principal-residence whole-house rental, or non-principal commercial rental.
Verify the applicant, residency evidence, Certificate of Compliance, inspection, occupancy, and unit-specific license requirements.
Model the $500 annual per-unit license, state and County taxes, insurance, utilities, maintenance, and professional costs.
Underwrite a lawful longer-term fallback before committing capital.

Property eligibility

Ann Arbor STR Eligibility

Ann Arbor permits different STR types by zoning and prohibits accessory dwelling units from STR use.

Principal-residence homestays and whole-house rentals may qualify in residential and mixed-use districts.
Non-principal commercial rentals are generally restricted to mixed-use districts, subject to the current permitted-use table.
A lawful commercial STR established before March 1, 2021 may have nonconforming-use rights that require City confirmation.
Accessory dwelling unit applications are denied.
Third-party companies cannot apply for an STR license, and a tenant applicant must genuinely reside at the property with owner permission.

Licenses and renewals

Ann Arbor STR Licensing Sequence

Apply through STREAM only after confirming the correct STR type and every prerequisite for the unit.

Select the principal or non-principal structure and submit the required residency statement when applicable.
Non-principal properties need a valid Certificate of Compliance before applying where zoning permits the use.
Pay the nonrefundable $500 fee for each unit before review starts.
Allow for the City’s published review period of up to 21 business days.
Renew each license annually and keep the posted certificate and advertisement disclosures current.

Documents and operations

Ann Arbor STR Operating Rules

The approved license type, occupancy, habitable sleeping areas, advertisements, and nuisance response control day-to-day operation.

Display the STR license number and maximum occupancy in every property advertisement.
Do not exceed the occupancy established by zoning and housing codes or any lower Certificate of Compliance limit.
Never require a guest to sleep in a non-habitable area.
The host remains responsible for nuisance and enforcement complaints.
Maintain residency, license, inspection, booking, tax, and complaint-response records.

Occupancy and safety

Ann Arbor Occupancy and Safety

Building, housing, inspection, and occupancy requirements depend on the property and license type.

The City guide describes a zoning maximum of four persons plus offspring in all districts, subject to lower housing limits.
It describes up to six persons as one unit in multiple-family and mixed-use districts, again subject to lower housing limits.
Non-principal commercial STRs require a Certificate of Compliance and periodic Housing Code inspections.
Principal-residence STRs are not subject to that periodic rental inspection under the City guide, but building and housing rules still apply.
Confirm lawful sleeping rooms, square footage, lighting, ventilation, exits, alarms, and insurance for the exact unit.

Taxes and filings

Ann Arbor Lodging Taxes

Michigan imposes 6% use tax on covered public lodging, while Washtenaw County separately administers accommodation excise tax with exemptions that require confirmation.

Michigan Treasury states that 6% use tax applies to commercial accommodations available to the public.
The state says no lodging use tax is due when the same tenant rents continuously for more than one month.
Washtenaw County publishes a 5% accommodation excise tax on covered room revenue and monthly reporting by the fifteenth.
County ordinance history includes exemptions for certain bed and breakfasts, cottages, and periodic home-room leasing, so confirm classification before collecting.
Verify platform collection, taxable room charges, exemptions, registration, and filing duties with each taxing authority.

Complaints and enforcement

Ann Arbor STR Enforcement

Unlicensed operation and license-condition violations can lead to daily tickets, revocation, and other City enforcement.

The City says each day without a valid license may generate a separate ticket.
STR licenses and certified rental licenses can be revoked.
Community Standards handles parking, trash, and vegetation complaints.
Report active noise complaints to the Ann Arbor Police Department while the noise is occurring.
Preserve notices and written approvals and use the applicable appeal process by the stated deadline.

Property analysis

Ann Arbor Property Underwriting

Price only after unit-specific zoning, residency, inspection, tax, insurance, and fallback analysis.

Confirm City jurisdiction, zoning, lawful dwelling status, open permits, code cases, and any nonconforming-use history.
Verify the proposed operator can document principal residence when that license path is required.
Budget annual licensing, inspection or Certificate of Compliance work, taxes, insurance, safety improvements, utilities, and maintenance.
Use property-specific comparable evidence rather than unsupported citywide revenue, occupancy, or ROI claims.
Condition closing on written eligibility confirmation and a lawful alternative use.

Contacts and support

Ann Arbor STR Contacts

Route each question to the office with authority and retain the written response.

Ann Arbor Rental Housing Services: licensing, renewal, eligibility, and complaints; 734-794-6268; ShortTermRentals@a2gov.org.
Ann Arbor STREAM: application and fee submission.
Ann Arbor Planning: zoning district and permitted-use confirmation.
Washtenaw County Finance: accommodation-tax registration, exemptions, returns, and payments.
Michigan Treasury: state lodging use-tax registration and filing.

Sources and review

Ann Arbor Official Sources

Official materials were checked September 28, 2026. Confirm current instructions before acquisition or operation.

Ann Arbor Short-Term Rentals
Ann Arbor STR Guide
Ann Arbor Chapter 97
Ann Arbor Unified Development Code
Ann Arbor STR Permitted Use Table
Ann Arbor STREAM
Washtenaw Accommodation Excise Tax
Washtenaw Accommodation Tax Remittance
Michigan Lodging Use Tax
Ann Arbor Legal Notices

Is Ann Arbor, Michigan Good for Airbnb Investment?

Ann Arbor Rental Review