As I prepare for an upcoming summer vacation with my two sons and my cousin at a vacation rental, I wonder how the owners are protected if a renter causes damage to their home. Not that I anticipate us creating any damage but what if another renter does?
I ask if vacation rentals are considered commercial because I live in an area where people rent their homes out as vacation rentals. If I decide to do the same, would my home then become like a Michigan motel or hotel needing commercial insurance or would my homeowner’s insurance suffice?
According to the National Association of REALTORS®, “There are many things to think about and do to prepare for operating an STR (short term rental), says Rob Copenhaver, real estate agent with REMAX Unlimited and owner of Vacation Rentals of Tampa Bay, Fla. ‘And the information can be really confusing and hard to find.’
With that in mind, it’s important to prepare clients for the realities of STRs. They can indeed be a lucrative investment, but buyers need to know what they are getting into when it comes to return on investment, regulations, taxes, and insurance. Dispelling myths for clients and leading them to the information they’ll need to maximize their investment is important when it comes to providing superior customer service.
‘Buyers need to be clear that the property will be used as a short-term rental,’ Copenhaver says.
Likewise, a regular homeowner’s insurance policy won’t cover an STR either. Though STR outlets like Airbnb cover quite a bit as far as liability is concerned, Copenhaver suggests to his clients that they shop for STR-specific insurance on their own as well,”.
Where do vacation rentals make the most money in Michigan
Where I live in Southeast Michigan, within a vicinity nicknamed “The Lakes Area”, we have higher water table levels because of all the lakes being so closely located. While it is a rapidly growing region of Oakland County, it is still rural in many of the surrounding neighborhoods, so it has an up-north type of feel.
For example, we have hundreds of small to medium-sized inland lakes throughout the area and my home sits across the street with privileges on our township’s largest, private lake. In fact, to be exact on just how many lakes we have, Oakland County’s official website states, “Oakland County boasts more than 1,400 lakes and numerous streams stemming from its six major watersheds,”.
Put it this way: it doesn’t matter where you live in this area; even if you are not on a lake or in view of one, a lake will certainly be within walking distance. Wherever I turn, there is an inland lake to play in and explore. Furthermore, there are the following state parks and county parks within ten miles of our home to explore, including:
- Pontiac Lake State Park
- Indian Springs Metroparks
- Highland Recreation State Park
- Kensington Metroparks
- Proud Lake State Park
The inland lakes around here are well taken care of, clean, have great fishing, and have fewer incidents of accidents and deaths. The people are friendly, and it has a small-town feel yet has all the amenities that one needs to live and raise a family or vacation.
Some of the most profitable vacation properties in Michigan are Petoskey, Traverse City, Boyne City, Harbor Springs, and Gaylord. Most of these areas are considered up-north to those of us that live in Southeast Michigan near Detroit.
The Lakes Area is also a very desirable vacation location, and we could probably make a decent living from renting our home out over the summer. But where would we go? I guess this venture will have to wait until I find my dream home on the lake instead of across the street.
Places to visit in Michigan during summer
When I think about my favorite places to visit in Michigan during the summer, I think about how some of my beloved spots to camp are in Michigan’s National Forests.
According to the United States Forest Service (USDA), the land where we love to camp is, “Lying between the shores of Lake Michigan and Lake Huron in the northern half of the Lower Peninsula of Michigan, is the nearly one-million-acre Huron-Manistee National Forests. The Forests offer year-around motorized and non-motorized recreation opportunities. Most popular are the trails and campgrounds along four nationally designated Wild and Scenic Rivers such as the Pine, Manistee, Au Sable and Pere Marquette,”.
While the US manages and maintains Michigan’s national forestland, the Michigan Department of Resources (DNR) manages the State forestland. Here’s what the DNR has to say about Michigan’s forests, “Michigan’s nearly 4 million acres of state forest lands provide our state with clean air and water, materials for a strong forest products industry, and places to hunt, fish, hike, ride ORVs and camp,”.
I have experienced camping all over the state of Michigan, in private campgrounds, State Parks, and National Forest land. As an adult, I have taken my sons camping since they were only a few months old as well. Below are some of my favorite State and National Parks in Michigan:
- Huron Manistee forest in Oscoda, on the Au Sable River
- Manistee National Forest, Manistee, footsteps from Lake Michigan
- Ludington State Park, on the shores of Lake Michigan
- Lakeport State Park, on the shores of Lake Huron
- Proud Lake State Park, on the Huron River (close to home)
- Seven Lakes State Park, for Halloween camping (close to home)
- Algonac State Park, on the shores of Lake Huron (great pier fishing)
- Burt Lake State Park, on Burt Lake (which connects to the Indian River, connecting to Mullet Lake that feeds into the Cheboygan River, leading out to Lake Michigan)
- Mears State Park, on the shores of Lake Michigan, minutes away from world-renowned Sleep Bear Sand Dunes
Our Pure Michigan tourism is extremely popular and because of that, it can be difficult to secure camping reservations at one’s desired time. This is what happened this year so instead, I rented a vacation property in Mears near the State Park with a beautiful beach on Lake Michigan and close to the Sleeping Bear Sand Dunes.
My son has a Jeep and is bringing his Four Winns ski boat on our trip. We will ride on Sleeping Bear Sand Dunes in the Jeep, boat on Silver Lake where there is a sand bar for the younger people to hang out as well as have beach and swim time on the sandy shores of Lake Michigan.
Are vacation rentals considered commercial?
In conclusion, vacation rentals can definitely be lucrative but come with responsibilities—especially regarding insurance—so it’s wise to treat them more like a business than a hobby.
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