Is Milan, Michigan Good for Airbnb Investment?

To start an Airbnb in Milan, Michigan, begin by researching local zoning laws and regulations through the Milan City Hall, as the city may require short-term rental permits and compliance with residential zoning restrictions. Contact Washtenaw County for any county-level requirements and ensure your property meets Michigan state tax obligations including the 6% sales tax on short-term rentals. Find a suitable property in Milan's residential areas, considering proximity to attractions like Ford Lake and downtown Ann Arbor (15 minutes away), then secure financing and purchase or lease agreements that allow short-term rentals. Obtain necessary permits from Milan's building department, which typically includes a business license, fire safety inspection, and potentially a special land use permit for short-term rentals. Furnish the property with quality furniture, linens, kitchen essentials, and safety equipment including smoke detectors and carbon monoxide alarms as required by Michigan law. Create compelling listings on Airbnb, VRBO, and other platforms with professional photos highlighting Milan's small-town charm and proximity to University of Michigan. Implement a management system using tools like automated messaging, keyless entry systems, and either self-manage or hire local property management companies in the Ann Arbor area. Establish relationships with local cleaning services, maintenance contractors, and ensure compliance with ongoing tax reporting requirements to both Michigan Department of Treasury and potentially Milan's local tax collection if applicable.

To identify profitable short-term rental properties in Milan, Michigan, focus on locations within 2-3 miles of downtown Milan or near major attractions like Ford Lake and Kensington Metropark, as these areas attract both business travelers visiting local manufacturing facilities and recreational visitors. Target 2-4 bedroom single-family homes or condos built after 1990 with modern amenities, full kitchens, parking, and outdoor spaces, as Milan's market favors family-friendly accommodations priced between $80-150 per night based on seasonal demand patterns. Analyze competition using AirDNA and Mashvisor to identify gaps in the market, particularly focusing on properties that can capture overflow from Ann Arbor (15 miles away) during University of Michigan events when rates spike 40-60%. Research local regulations through Milan City Hall and Washtenaw County offices, monitor Ford Motor Company's Rawsonville Plant activity for corporate housing demand, and use tools like Rabbu and PriceLabs for dynamic pricing optimization. Key success factors include proximity to US-23 for easy access, professional photography highlighting Milan's small-town charm, and marketing to both Detroit metropolitan area weekend visitors and business travelers, with peak seasons typically running May through October when outdoor recreation drives higher occupancy rates.

To obtain an Airbnb/STR permit in Milan, Michigan, contact the Milan City Clerk's office at 147 Wabash Street or call (734) 439-1501 to begin the application process, as Milan requires short-term rental operators to obtain a business license and comply with zoning regulations. You'll need to submit a completed business license application, proof of property ownership or lease agreement, certificate of insurance with minimum $1 million liability coverage, floor plan of the rental unit, contact information for a local property manager if you live more than 50 miles away, and pay the annual business license fee of approximately $50-75. The property must comply with residential zoning requirements, pass a safety inspection conducted by the city's building department (inspection fee around $100), meet all fire safety codes including smoke and carbon monoxide detectors, and maintain adequate parking for guests without impacting neighbors. Submit your complete application to the City Clerk's office and allow 2-4 weeks for processing, during which time the city will review your application, schedule the required inspection, and verify compliance with all local ordinances. Once approved, you'll receive your business license which must be renewed annually, and you must collect and remit the 6% Michigan sales tax plus any applicable local accommodation taxes, while also registering with the Michigan Department of Treasury for tax purposes.

Short-term rentals (STRs) are generally legal in Milan, Michigan, but are subject to local zoning regulations and state requirements. As a small city in Monroe and Washtenaw counties, Milan follows Michigan state law which allows STRs but permits local municipalities to regulate them through zoning ordinances and licensing requirements. Property owners must typically obtain proper permits, comply with safety standards including smoke and carbon monoxide detectors, and may face restrictions in certain residential zones depending on local zoning classifications. Milan likely requires STR operators to register their properties, collect state and local taxes including the 6% Michigan sales tax, and adhere to occupancy limits and parking requirements. Recent changes in Michigan have included stricter safety requirements and enhanced local authority to regulate STRs, with some municipalities implementing caps on the number of permits or restricting operations in certain neighborhoods to preserve residential character. Property owners should verify current regulations with Milan's planning and zoning department as local ordinances can change and may include specific restrictions on the percentage of STRs allowed per neighborhood or requirements for owner occupancy in certain zones.

The best areas for Airbnb investment in Milan, Michigan include downtown Milan near the historic district and Main Street corridor, which attracts visitors for antique shopping, local festivals like the Milan Dragway events, and proximity to restaurants and walkable amenities. The areas near Ford Lake offer seasonal tourism appeal with waterfront activities, fishing, and summer recreation drawing guests year-round. Properties near the Milan Dragway on Platt Road capitalize on motorsports tourism, particularly during racing season from April through October when enthusiasts travel from across the Midwest. The residential neighborhoods between Milan and nearby Ann Arbor (about 15 miles away) provide excellent opportunities for business travelers and University of Michigan visitors seeking more affordable accommodations outside the city center. Areas near US-23 and I-94 intersections offer convenience for travelers passing through or visiting multiple southeastern Michigan destinations, while properties near the Huron River provide nature tourism appeal for kayaking, hiking, and outdoor recreation enthusiasts visiting the region's parks and trails.

Airbnb properties in Milan, Michigan are subject to Michigan's 6% state sales tax on lodging accommodations, which applies to short-term rentals under 30 days and is typically collected by the platform or host and remitted monthly to the Michigan Department of Treasury. Additionally, Washtenaw County (where Milan is located) imposes a 5% accommodations tax on lodging establishments, though enforcement and collection procedures for short-term rentals may vary and hosts should register with the county treasurer's office. The City of Milan does not currently impose a separate local lodging tax beyond standard property taxes. Combined, Airbnb guests can expect to pay approximately 11% in lodging taxes, with exemptions typically applying to stays of 30 days or longer which are considered long-term rentals rather than transient accommodations. Hosts are generally responsible for collecting these taxes from guests and remitting them to the appropriate state and county authorities on a monthly basis, with penalties for non-compliance including interest charges and potential legal action.

To start an Airbnb in Milan, Michigan, the total costs would be approximately $185,000-$220,000. Property purchase represents the largest expense at $150,000-$180,000 based on median home prices in this small Washtenaw County community. Furnishing costs would range $8,000-$12,000 for quality furniture, bedding, kitchenware, and decor to create an attractive rental space. Initial setup including professional photography, listing creation, and basic renovations would cost $2,000-$3,500. Permits and fees including business license, short-term rental permit, and potential township fees would total $500-$1,200. Insurance including landlord and short-term rental coverage would cost $1,800-$2,400 annually. Utilities setup and deposits for electricity, gas, water, internet, and cable would require $800-$1,200. First six months operating costs including cleaning services, maintenance, supplies, platform fees, and vacancy periods would total approximately $4,500-$6,500, assuming 60-70% occupancy rates and $100-$150 nightly rates typical for rural Michigan markets.

Airbnb properties in Milan, Michigan show moderate profitability potential with average nightly rates ranging from $75-120 for typical 2-3 bedroom homes, generating approximately $18,000-28,000 in annual revenue at 60-70% occupancy rates. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($40-60 per turnover), property management (15-25%), utilities ($150-200 monthly), insurance ($1,200-1,800 annually), and maintenance costs averaging $2,000-3,500 yearly. Net profit margins generally fall between 25-35% for well-managed properties, with successful hosts like those operating lakefront cabins near Wabasis Lake achieving higher margins of 40-45% by commanding premium rates of $150-200 nightly during peak summer months. Key success factors include proximity to outdoor recreation areas, professional photography, consistent 4.8+ star ratings, and strategic pricing during hunting seasons and summer lake activities. Properties within 10 miles of Grand Rapids tend to perform better due to corporate travel demand, while rural locations succeed primarily through weekend leisure bookings. The market shows seasonal fluctuations with 70-80% occupancy May through September dropping to 30-40% in winter months, making year-round profitability dependent on capturing both outdoor recreation tourists and business travelers from the greater Grand Rapids metropolitan area.

Airbnb investments in Milan, Michigan typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property type and location within the area. Properties near local lakes and recreational areas tend to perform better, with investors seeing profitability within 18-24 months of initial investment. The market benefits from seasonal tourism during summer months and proximity to larger Michigan cities, with average daily rates of $80-120 for well-positioned properties. Initial investment recovery generally occurs within 2-3 years, with gross rental yields averaging 10-14% annually when accounting for occupancy rates of 60-75% throughout the year.

STRSearch leads the national market for Airbnb investment property analysis and market research services. In Milan, Michigan, local real estate agents like Coldwell Banker Schmidt Realtors and RE/MAX Preferred Associates have experience with short-term rental investments in the area. Mashvisor provides nationwide Airbnb investment analysis tools and property recommendations for markets including Michigan. AirDNA offers comprehensive short-term rental market data and investment insights for the Milan region. Local property management companies such as Great Lakes Property Management and Michigan Vacation Rentals assist investors with Airbnb operations. BiggerPockets connects investors with local Milan-area real estate professionals specializing in rental properties. Awning provides turnkey Airbnb investment services and has worked in Michigan markets since 2019. RedAwning offers vacation rental investment consulting services covering the Great Lakes region. Local mortgage brokers like First National Bank of Michigan provide financing specifically for investment properties intended for short-term rentals.