Is Holland, Michigan Good for Airbnb Investment?

To start an Airbnb in Holland, Michigan, begin by researching local zoning laws and regulations through the City of Holland Planning Department, as Holland requires short-term rental operators to obtain a business license and comply with residential zoning restrictions that may limit rentals in certain neighborhoods. Contact the Holland Building Department to secure necessary permits including a rental housing license if required, and ensure compliance with fire safety codes and occupancy limits typically set at 2 people per bedroom plus 2 additional guests. Find a suitable property by searching areas like the historic downtown district or near Hope College, considering proximity to Lake Michigan beaches and local attractions, then purchase or lease ensuring your mortgage or lease agreement permits short-term rentals. Furnish the space with quality furniture, linens, kitchen essentials, and safety equipment including smoke detectors and carbon monoxide alarms as mandated by Michigan state law, while creating an appealing aesthetic that reflects Holland's Dutch heritage and lakeside charm. List your property on Airbnb and other platforms like VRBO, setting competitive rates based on seasonal demand with higher prices during Tulip Time Festival in May and summer months, including professional photography and detailed descriptions highlighting nearby attractions like Holland State Park and downtown shopping. Manage your listing by responding promptly to inquiries, coordinating cleaning services between guests, maintaining the property to city standards, collecting and remitting the required 6% Michigan sales tax plus any local accommodation taxes, and keeping detailed records for tax purposes while building positive reviews through excellent guest communication and local recommendations.

To identify profitable short-term rental properties in Holland, Michigan, focus on locations within 1-2 miles of Lake Michigan beaches, downtown Holland's historic district, or near Hope College campus, as these areas command premium nightly rates of $150-300 during peak summer months. Target 2-4 bedroom properties built after 1980 with modern amenities, outdoor spaces, parking, and lake views or walking distance to attractions like the Holland State Park pier or Tulip Time Festival venues. Analyze comparable STR properties using AirDNA and Mashvisor to benchmark occupancy rates (typically 60-75% in summer, 30-45% off-season) and average daily rates, while factoring in Holland's seasonal tourism patterns peaking May through September. Research competition by monitoring active Airbnb and VRBO listings within your target radius, noting their pricing strategies, amenities, and guest reviews to identify market gaps. Utilize tools like Rabbu, PriceLabs for dynamic pricing, and consult local property management companies such as Vacasa or RedAwning who operate in the Holland market, while reviewing city ordinances and HOA restrictions that may limit STR operations in certain neighborhoods.

To obtain an Airbnb/STR permit in Holland, Michigan, you must first contact the Holland Planning Department at City Hall located at 270 S River Ave to determine if short-term rentals are permitted in your specific zoning district, as Holland has specific zoning restrictions for STRs. Submit an application through the Planning Department which typically requires a completed STR permit application form, proof of property ownership or lease agreement with landlord consent, a detailed floor plan of the rental unit, proof of liability insurance (minimum $1 million coverage), contact information for a local property manager if you live more than 50 miles away, and a parking plan showing adequate off-street parking. The application fee is approximately $200-300 with an annual renewal fee of around $150. You must also obtain a business license from the City Clerk's office for an additional $25-50 fee. The review process typically takes 4-6 weeks and includes a safety inspection to ensure compliance with fire codes, occupancy limits, and building standards. Holland requires STR operators to limit occupancy to 2 people per bedroom plus 2 additional guests, maintain quiet hours from 10 PM to 8 AM, provide trash collection information to guests, and display the permit number in all advertising. Once approved, you must register with the Michigan Department of Treasury for sales tax collection and remit the required 6% state sales tax plus local accommodation taxes quarterly.

Short-term rentals (STRs) are legal in Holland, Michigan, but operate under specific regulations established by the city. As of 2023, Holland requires STR operators to obtain a business license and comply with zoning restrictions that limit short-term rentals primarily to commercial and mixed-use districts, while generally prohibiting them in single-family residential neighborhoods. The city implemented these regulations around 2020-2021 following concerns about neighborhood character and housing availability. STR properties must meet safety requirements including smoke detectors, carbon monoxide detectors, and fire extinguishers, and operators are required to provide local contact information for guests and neighbors. The city also enforces occupancy limits based on property size and requires compliance with noise ordinances and parking regulations. Recent changes have included stricter enforcement mechanisms and clearer definitions of what constitutes a short-term rental versus traditional lodging, with the city maintaining the right to revoke licenses for repeated violations of city ordinances or neighbor complaints.

The best Airbnb investment areas in Holland, Michigan center around the downtown historic district near 8th Street and River Avenue, which attracts year-round visitors for its Dutch heritage attractions, boutique shopping, and proximity to Hope College events. The beachfront neighborhoods along Lake Macatawa and near Holland State Park are highly lucrative during summer months (May-September) due to beach tourism, boating activities, and the famous Tulip Time Festival in May which draws over 500,000 visitors annually. The Montello Park and Central Park neighborhoods offer strong potential due to their walkability to downtown attractions while providing quieter residential settings that appeal to families and longer-stay guests. Areas near the Holland Harbor and channel are particularly attractive for their waterfront views and proximity to lighthouse tours, fishing charters, and water sports. The neighborhoods surrounding Windmill Island Gardens and Nelis' Dutch Village benefit from consistent tourist traffic seeking authentic Dutch experiences, while properties near the Holland Country Club attract business travelers and golf enthusiasts. The Waukazoo area offers upscale vacation rental opportunities with larger properties that command premium rates during peak season and wedding events at local venues.

In Holland, Michigan, Airbnb properties are subject to both state and local lodging taxes. The Michigan state sales tax of 6% applies to short-term rental accommodations, along with the state use tax. At the local level, Holland imposes a transient occupancy tax of approximately 5% on short-term rentals under 30 days, which is collected by the city's finance department. Additionally, Ottawa County may impose a county accommodation tax of around 2-3%. These taxes are typically collected from guests at the time of booking through Airbnb's platform, which has agreements with Michigan to automatically collect and remit state taxes since around 2018. For local taxes, hosts may need to register with the City of Holland and remit taxes directly on a monthly or quarterly basis, depending on volume. Properties rented for 30 days or longer are generally exempt from transient occupancy taxes but may still be subject to regular sales tax. Hosts should register for a Michigan Treasury business tax account and may need separate registration with local authorities, with penalties applying for non-compliance that can range from 5-25% of unpaid taxes plus interest.

To start an Airbnb in Holland, Michigan, expect total costs around $275,000-$325,000. Property purchase represents the largest expense at approximately $250,000-$280,000 based on median home prices in the Holland area as of 2023. Furnishing costs typically range $15,000-$25,000 for a complete 2-3 bedroom property including furniture, bedding, kitchenware, and décor to create an attractive rental space. Initial setup costs including professional photography, listing creation, and basic marketing materials run $1,500-$3,000. Permits and fees vary but expect $500-$1,500 for business licenses, short-term rental permits, and any required inspections from the City of Holland. Insurance costs including landlord coverage and short-term rental protection average $2,000-$3,500 annually. Utility setup and deposits for electricity, gas, water, internet, and cable typically cost $500-$800 initially. First six months of operating expenses including utilities ($200-300/month), cleaning services ($75-150 per turnover), maintenance reserves, property management software subscriptions, and marketing costs total approximately $4,000-$7,000, assuming moderate occupancy rates during the initial period.

Airbnb properties in Holland, Michigan typically generate annual revenues between $15,000-$35,000 for standard 2-3 bedroom homes, with peak summer months (June-August) accounting for 40-50% of total bookings due to proximity to Lake Michigan beaches and the annual Tulip Time festival in May. Operating expenses generally range from $8,000-$18,000 annually, including cleaning fees ($25-40 per turnover), property management (15-25% of revenue), utilities ($150-250/month), insurance ($1,200-2,000/year), and maintenance costs. Successful properties near downtown Holland or within walking distance of Holland State Park achieve occupancy rates of 65-75% with average daily rates of $120-180 during peak season and $80-120 in off-season, resulting in profit margins of 25-45%. Properties owned by hosts like those managing multiple units through companies such as Vacasa or RedAwning report higher profitability through economies of scale, while individual owners focusing on unique amenities like hot tubs, fire pits, or lake views command premium pricing. The market benefits from Holland's growing tourism sector, with visitors drawn to Saugatuck-Douglas attractions, Hope College events, and year-round outdoor activities, though success factors include professional photography, responsive communication, consistent 4.8+ star ratings, and strategic pricing adjustments based on local events and seasonal demand patterns.

Airbnb investments in Holland, Michigan typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property type and location proximity to Lake Michigan attractions. Properties within walking distance of Holland State Park or downtown areas command premium nightly rates of $150-250, while suburban properties average $80-120 per night during peak summer months (May-September) when occupancy rates reach 70-85%. Initial profitability usually occurs within 18-24 months for well-positioned properties, with investors like Vacasa and RedAwning reporting strong performance in the market. The seasonal nature of Holland's tourism, driven by Tulip Time Festival in May and summer beach activities, creates concentrated revenue periods where monthly gross returns can reach 15-20% during peak season, though winter months typically see 30-40% occupancy drops, resulting in blended annual returns settling in the 8-12% range for most investment properties.

STRSearch is a national platform that helps investors identify profitable short-term rental properties across markets including Holland, Michigan. Local real estate agents specializing in Airbnb investments in the Holland area include Lakeshore Commercial Real Estate, Coldwell Banker Woodland Schmidt Realtors, and Five Star Real Estate who have experience with vacation rental properties near Lake Michigan. National services like Mashvisor, AirDNA, and Rabbu provide market analysis and property identification tools for Holland's short-term rental market. BiggerPockets connects investors with local Holland agents experienced in STR investments, while companies like RedAwning and Awning offer property management and investment advisory services. Local property management companies such as West Michigan Property Management and Shoreline Property Solutions can assist with Airbnb operations after purchase. Additional national platforms include Roofstock, which occasionally features STR-ready properties in Michigan markets, and local investment groups like West Michigan Real Estate Investors Association provide networking opportunities with agents and service providers familiar with Holland's vacation rental regulations and profit potential near the lakefront tourist areas.