Starting a Short-Term Rental Business in Fennville

Fennville is a small city located in Allegan County, Michigan. With its proximity to popular tourist destinations like Saugatuck and Lake Michigan, Fennville has seen growth in short-term rentals through platforms like Airbnb and VRBO in recent years.

As of March 2023, there were approximately 607 active STR listings in Fennville, with an average occupancy rate of 42% and average daily rate of $441. The monthly revenue potential for STRs in Fennville is around $4,144.

However, before starting a short-term rental business in Fennville, it's important to understand the local regulations. The city has specific rules governing short-term rentals to balance the economic benefits with preserving neighborhood character and housing availability.

According to Fennville's zoning ordinance, STRs are allowed in certain residential districts with a special land use permit from the Planning Commission. The property must meet safety and occupancy standards, provide adequate parking, and have a designated local contact person.

All STRs in Fennville, regardless of length of stay, must also pass a rental inspection every three years. The inspection covers basic health and safety requirements like smoke detectors, egress windows, and handrails.

In addition to the city requirements, STR operators in Michigan must also comply with state-level regulations. In 2019, Michigan passed the Short-Term Rental Act, which prohibits local governments from banning STRs entirely. However, the law does allow cities to regulate things like noise, advertising, and number of occupants.

At the state level, STRs must also adhere to the Michigan Occupational Code, which includes obtaining a rental license and maintaining liability insurance. Operators must also collect and remit state use tax (6%) and may be subject to local tourism taxes.

Fennville STR owners have a few options to ensure compliance with all these rules. Some choose to work with a short-term rental property management company that handles licensing, inspections, guest communication, and cleaning. Others use online compliance monitoring services to track regulatory changes and avoid violations.

As the STR market continues to evolve, Fennville and other Michigan cities are working to adapt their policies. Nearby Saugatuck recently created a task force to review its STR ordinances and recommend updates. Some of the proposed changes include limiting the number of STRs per block, requiring an initial inspection for new permits, and increasing fines for violations.

Fennville remains a relatively friendly market for STRs, with a straightforward permitting and inspection process. However, anyone considering starting an STR business here should closely monitor any regulatory developments that could impact operations.

Proper due diligence, compliance, and working closely with local officials can help ensure a successful and sustainable STR venture in this charming West Michigan community. As one host on the Bigger Pockets forums advises, "Do your homework, be a good neighbor, and enjoy the benefits of STR investing in a beautiful part of the state."

Short-Term Rental Licensing Requirement in Fennville

Property owners must obtain a rental certificate from the city to operate a short-term rental in Fennville, Michigan. This requirement applies to both short-term and long-term rentals.

According to Fennville's zoning ordinance, all rental properties must pass a city inspection every three years. The inspection covers basic health and safety standards, such as smoke detectors, egress windows, and handrails.

To apply for a rental certificate, STR owners must submit the following to the City of Fennville:

• Completed rental registration form
• Proof of ownership (deed, tax bill, etc.)
• Site plan showing parking and property details
• Floor plan with room dimensions and safety features
• Designated local contact person information

Once the application is submitted, the city building department will schedule an inspection of the property. A rental certificate will be issued if the property passes inspection and meets all zoning requirements.

It's important to note that obtaining a rental certificate is separate from the city's zoning approval process for STRs. In certain residential districts, STRs may require a special land use permit from the Planning Commission in addition to the rental certificate.

Failure to obtain a rental certificate or comply with inspection requirements can result in fines and legal action from the city. The city has the authority to revoke a rental certificate for repeated violations or safety hazards.

Some STR owners in Fennville choose to work with a short-term rental property management company to handle the licensing and compliance process. These companies are well-versed in local regulations and can ensure all necessary permits and inspections are completed.

However, even if a property manager is employed, the ultimate responsibility for compliance falls on the property owner. It's important for STR owners to understand and follow all local licensing requirements to avoid potential issues down the road.

As the STR market continues to grow in Fennville and surrounding areas, the city may update its licensing process to address any new concerns. Officials recently created a task force in nearby Saugatuck Township to review STR ordinances and propose changes, such as increased fees and occupancy limits.

For the most current information on Fennville's STR licensing requirements, owners should contact the city building department directly. By staying proactive and working closely with local officials, STR owners can ensure they are operating legally and responsibly in the community.

Required Documents for Fennville Short-Term Rentals

Property owners must submit several required documents to the city to successfully apply for a short-term rental license in Fennville, Michigan. These documents help ensure that the rental property meets all necessary safety standards and complies with local zoning regulations.

The following documents are typically required as part of the STR licensing process in Fennville:

1. Completed Rental Registration Form – This form is available from the Fennville City Clerk's office or on the city website. It must be filled out completely and signed by the property owner or authorized agent.

2. Proof of Ownership – STR owners must provide documentation showing they are the legal owner of the property, such as a deed, tax bill, or mortgage statement. If the owner is an LLC or other business entity, additional documentation may be required, such as articles of incorporation or a business license.

3. Site Plan – A detailed site plan of the STR property must be submitted, showing the location of the rental unit, parking areas, and any outdoor amenities. The site plan should also include information on the property's zoning district and any relevant setback or lot coverage requirements.

4. Floor Plan – STR owners must provide a floor plan of the rental unit, including room dimensions, locations of smoke detectors and carbon monoxide alarms, and any other safety features. The floor plan should clearly label each room and indicate the maximum occupancy based on the city's standards.

5. Local Contact Person Designation – Fennville requires all STRs to have a designated local contact person who can respond to any issues or emergencies within a certain timeframe (usually 1-2 hours). STR owners must provide this local representative's name, address, and 24/7 contact information.

6. Proof of Insurance – The city may require STR owners to provide proof of liability insurance covering the rental property. The insurance policy should be in the property owner's name and meet any minimum insurance coverage amounts set by the city.

7. Parking Plan – STRs in Fennville must provide off-street parking for guests based on the unit's occupancy. The parking plan should show the location and dimensions of all parking spaces and ensure they meet the city's requirements for size and surface material.

In addition to these core documents, some STR owners may need to provide additional information depending on their specific circumstances, such as:

1. A special land use permit application, if required based on the property's zoning district
2. A septic system certification, if the property is not connected to the city sewer system
3. A well water test report, if the property has a private well
4. A fire safety inspection report, if required by the city or the owner's insurance company

It's important for STR owners to work closely with the Fennville city officials to ensure they have all the necessary documents for their specific property. Incomplete or missing information can delay the licensing process and potentially result in fines or other penalties.

By gathering all the required documents upfront and submitting a complete application package, STR owners can demonstrate their commitment to compliance and help streamline the approval process. Staying organized and keeping detailed records of all STR-related documents can also make it easier to renew licenses or address any issues that may arise in the future.

Fennville Short-Term Rental Taxes

In addition to obtaining a rental license and passing inspections, short-term rental (STR) owners in Fennville, Michigan, must also comply with various tax requirements at the state and local levels.

At the state level, all STRs in Michigan are subject to a 6% use tax on the total rental amount. This tax is similar to the state sales tax but applies specifically to the use of hotel rooms, vacation homes, and other short-term lodging.

STR owners are responsible for collecting the 6% use tax from their guests and remitting it to the Michigan Department of Treasury on a monthly basis. Owners must register with the state treasury department and obtain a use tax registration number before they can begin collecting the tax.

Failure to collect and remit the use tax can result in penalties and interest charges from the state. The Michigan Department of Treasury conducts periodic audits of STR owners to ensure compliance with the tax laws.

In addition to the state use tax, some local municipalities in Michigan also impose their own taxes on short-term rentals. These taxes, often called "hotel taxes" or "transient occupancy taxes," are used to fund local tourism promotion and infrastructure.

As of 2023, the City of Fennville does not appear to have its own local tax on short-term rentals. However, nearby cities and townships do collect such taxes. For example, Saugatuck Township levies a 3% tax on all STRs, while the City of Douglas charges a 5% tax.

It's important for Fennville STR owners to stay informed about any potential changes to the local tax laws that could impact their business. As the STR market grows in the area, it's possible that Fennville or Allegan County could implement their own taxes in the future.

In addition to collecting and remitting the required taxes, STR owners must also report their rental income on their federal and state income tax returns. The income from an STR is generally considered taxable, and owners may be able to deduct certain expenses related to operating the rental, such as cleaning fees, supplies, and maintenance costs.

However, the tax treatment of STRs can be complex, especially for owners who use the property for both personal and rental purposes. It's recommended that Fennville STR owners consult with a qualified tax professional to ensure they are properly reporting their rental income and maximizing any available deductions.

Proper record-keeping is also essential for STR tax compliance. Owners should keep detailed records of all rental transactions, including dates, guest information, and amounts collected. They should also retain receipts and invoices for any expenses related to the rental property.

By staying on top of their tax obligations and maintaining good records, Fennville STR owners can avoid potential issues with the state or federal tax authorities and ensure the long-term viability of their rental business. While the tax requirements may seem daunting at first, many STR owners find that the benefits of the business outweigh the compliance costs.

As one Fennville STR owner shared on the Bigger Pockets forums, "Yes, dealing with taxes and regulations can be a headache, but it's just part of the cost of doing business. Seeing that rental income hitting your bank account each month makes it all worth it."

Michigan Wide Short-Term Rental Rules

While many short-term rental regulations are set at the local level in Michigan, some state-wide rules and laws apply to Airbnb and VRBO hosts across the Great Lakes State.

In 2017, Michigan passed the Short-Term Rental Promotion Act, which defines a short-term rental as "a rental of a single-family residence, a dwelling unit in a 1-to-4–family house, or any unit or group of units in a condominium for terms of less than 28 days at a time." This law prohibits local governments from banning short-term rentals outright, but does allow them to regulate STRs through zoning, licensing, and other ordinances.

Under the Short-Term Rental Promotion Act, local governments can:

1. Limit the number of short-term rentals in certain areas or zones
2. Require hosts to obtain permits or licenses to operate
3. Set standards for noise, parking, trash, and other potential nuisances
4. Levy fines or penalties for violations of STR ordinances

However, the law specifies that any local regulations must be applied consistently to all residential properties, and STRs cannot be prohibited in all residential zones. This provision has been a point of contention in some Michigan communities that want tighter restrictions on short-term rentals.

At the state level, all short-term rental hosts in Michigan must also comply with the Michigan Occupational Code, which governs businesses and professions in the state. Under this code, STR operators must:

1. Register their business with the Michigan Department of Licensing and Regulatory Affairs (LARA)
2. Obtain a sales tax license and collect/remit the 6% state use tax on all bookings
3. Maintain at least $500,000 in liability insurance coverage for the rental property
4. Ensure the property meets all applicable building, health, and safety codes

In addition to the state sales tax, some Michigan municipalities also levy their own local lodging taxes on short-term rentals. For example, Traverse City imposes a 5% city tourism tax on STRs, while Mackinaw City charges a 3% lodging tax. Hosts are responsible for collecting these local taxes from guests and remitting them to the proper authorities.

There have been ongoing efforts in the Michigan Legislature to set more uniform standards for short-term rentals across the state. In 2021, House Bill 4722 was introduced, which would have prohibited local governments from banning STRs in all residential zones and set a statewide cap of 30% of units in a given area that could be used as vacation rentals. However, this bill faced opposition from some local officials and did not advance.

As of 2024, lawmakers are considering a new package of bills (HB 5465-5466) that would impose a 6% state excise tax on short-term rentals, require all STRs to register with the state, and mandate certain safety measures like smoke detectors and insurance coverage. The bills would still allow local governments to regulate STRs through zoning but aim to create more consistency and generate revenue for the state.

Overall, while Michigan has taken steps to protect the rights of short-term rental owners and promote the industry, the regulatory landscape remains complex, with a mix of state and local rules. Hosts should carefully research the specific requirements in their area and stay up-to-date on any legislative changes that could impact their business. By working proactively to comply with all applicable laws and be good neighbors, STR operators can help build a sustainable and responsible industry in Michigan.

Does Fennville Strictly Enforce STR Rules?

Based on discussions in online short-term rental forums like BiggerPockets and Reddit, it appears that Fennville has a relatively friendly and permissive attitude towards Airbnb and other vacation rentals compared to some other cities in Michigan. While the city has some regulations on the books, enforcement seems to be fairly lax and most hosts can operate without major issues.

On the BiggerPockets forums, one host shared their experience running an STR in Fennville: "I've been operating my rental here for about two years now, and honestly, the city has been pretty hands-off. I got my rental license and passed the initial inspection, but since then, I haven't heard a peep from the city. As long as you're not causing problems or getting a bunch of complaints, they seem to leave you alone."

Another Fennville host on Reddit echoed this sentiment: "Compared to some of the horror stories I've heard from hosts in other parts of Michigan, Fennville is a breeze. The licensing process was straightforward, and the city isn't actively hunting down STRs or trying to make life difficult for hosts. I think they recognize that vacation rentals are good for the local economy and don't want to discourage them."

This relatively permissive attitude may be due in part to Fennville's small size and rural character. With a population of just over 1,500, the city likely doesn't have the same level of resources or political pressure to crack down on STRs as larger cities like Grand Rapids or Detroit. Additionally, the area's proximity to popular tourist destinations like Saugatuck and Lake Michigan means that vacation rentals are an important part of the local economy.

That being said, this doesn't mean that Fennville is a total wild west for short-term rentals. The city does require all STRs to be licensed and inspected, and there are some zoning restrictions on where they can operate. Hosts who blatantly flout these rules or generate a lot of complaints from neighbors could still face consequences.

As one host cautioned on BiggerPockets, "Just because Fennville is relatively chill about STRs doesn't mean you can completely ignore the rules. You must still get your license, pay taxes, and be a good neighbor. If you're running a party house and causing problems, the city will shut you down."

Overall, it seems that Fennville is a fairly Airbnb-friendly market compared to many other cities in Michigan and beyond. Hosts who do their due diligence, follow the rules, and operate responsibly can enjoy the benefits of the short-term rental boom without too much interference from local authorities.

As a Fennville host summed it up on Reddit, "I think the city has found a good balance. They have some reasonable regulations in place to protect the community, but they're not trying to strangle the golden goose. As long as hosts are being responsible and respectful, Fennville is a great place to run an STR business."

How to Start a Short-Term Rental Business in Fennville

If you're considering starting a short-term rental business in Fennville, Michigan, here are the key steps to follow:

1. Research the local market and regulations

1. Analyze the demand for short-term rentals in the Fennville area, especially during peak tourist seasons. Look at comparable listings on Airbnb, VRBO, and other platforms to gauge pricing, occupancy rates, and amenities offered.
2. Familiarize yourself with Fennville's short-term rental ordinances, including zoning restrictions, licensing requirements, and inspection standards. Review the city's master plan and any recent council meetings or news articles related to STRs.
3. Understand the state-level regulations that apply to short-term rentals in Michigan, such as the requirement to collect and remit the 6% use tax.

2. Choose a suitable property

1. Decide whether you want to use an existing property or purchase a new one specifically for short-term rental use. Consider factors like location, size, amenities, and parking.
2. If purchasing a property, work with a local real estate agent who has experience with short-term rentals and can help you navigate the market.
3. Ensure the property is zoned appropriately and meets all local and state requirements for short-term rentals, such as occupancy limits and safety standards.

3. Obtain necessary licenses and permits

1. Apply for a rental license from the City of Fennville. This involves submitting an application, paying a fee, and passing an inspection to ensure the property meets health and safety codes.
2. If required based on zoning, obtain a special land use permit or other approvals from the Planning Commission.
3. Register with the Michigan Department of Licensing and Regulatory Affairs (LARA) and obtain a sales tax license to collect and remit the state use tax.

4. Prepare your property for guests

1. Make any necessary repairs, upgrades, or renovations to ensure the property is safe, comfortable, and attractive to guests. Consider hiring a professional designer or stager to help you arrange your furnishings and create a welcoming space.
2. Develop a comprehensive inventory of furniture, appliances, linens, and other essentials you'll need to provide for guests. Purchase high-quality items that will hold up to frequent use.
3. Create a house manual with important information for guests, such as check-in/check-out procedures, house rules, Wi-Fi password, and local recommendations.

5. Set up your business operations

1. Choose a business structure (sole proprietorship, LLC, etc.) and register your business with the state of Michigan.
2. Open a separate bank account for your rental business to keep your finances organized and make tax reporting easier.
3. Obtain appropriate insurance coverage for your short-term rental, including liability insurance and any additional coverage required by your lender or local regulations.

6. Create your listing and marketing strategy

• Sign up for Airbnb, VRBO, and any other short-term rental site you want to use. Create compelling listings with high-quality photos, detailed descriptions, and competitive pricing.
• Develop a marketing plan to attract guests and stand out from the competition. This could include social media advertising, email marketing, or partnering with local businesses and attractions.
• Consider offering special promotions or discounts to generate bookings during slower periods or to attract repeat guests.

7. Launch your rental and provide excellent guest service

• Once your listing is live and you start receiving bookings, communicate promptly and professionally with guests to answer questions and provide check-in instructions.
• Ensure the property is thoroughly cleaned and well-maintained between each guest stay. Consider hiring a professional cleaning service to help with turnover.
• Be available to address any guest concerns or issues that arise during their stay, either in person or through a local property manager.
• Encourage satisfied guests to leave positive reviews and consider implementing a loyalty program to incentivize repeat bookings.

8. Comply with ongoing regulations and best practices:

• Stay up-to-date with any changes to local or state short-term rental regulations and adjust your operations accordingly.
• Maintain accurate records of all rental income and expenses for tax purposes, and file all required state and federal tax returns.
• Regularly assess your pricing, amenities, and marketing strategies to ensure you're staying competitive and profitable in the Fennville market.
• Continue to invest in property maintenance and upgrades to provide a high-quality guest experience and protect your investment over time.

By following these steps and being proactive about compliance and guest satisfaction, you can build a successful and sustainable short-term rental business in Fennville. While there may be some challenges along the way, the potential rewards of tapping into the growing vacation rental market in this charming West Michigan town are significant for savvy entrepreneurs.

Who to Contact in Fennville about Short-Term Rental Regulations and Zoning?

If you have questions about short-term rental regulations and zoning in Fennville, Michigan, there are several local government offices and resources you can contact for guidance and assistance.

1. City of Fennville Zoning Administrator

The Zoning Administrator is responsible for enforcing the city's zoning ordinance and can provide information on short-term rental requirements, permitted zones, and the application process for any necessary approvals.

Contact: Katie Beemer, Zoning Administrator
Phone: (269) 561-8321
Email: kbeemer@fennville.com

2. City of Fennville Clerk's Office

The Clerk's Office handles business licensing for the city, including short-term rental licenses. They can assist with the application process, fees, and inspection requirements.

Contact: Camille Clark, City Clerk
Phone: (269) 561-8321
Email: cclark@fennville.com

3. Allegan County Health Department

The county health department is responsible for ensuring that short-term rentals meet health and safety standards, including water quality, septic systems, and occupancy limits.

Phone: (269) 673-5411
Email: EH@allegancounty.org

4. Michigan Department of Licensing and Regulatory Affairs (LARA)

LARA oversees business licensing and regulation at the state level, including the registration requirements for short-term rental operators.

Phone: (517) 241-6470
Email: BPLHelp@michigan.gov

5. Michigan Department of Treasury

The Department of Treasury administers the state's tax laws, including the use tax that short-term rental operators must collect and remit on their bookings.

Phone: (517) 636-6925
Email: Treas_STR@michigan.gov

In addition to these government offices, there are also several local organizations and resources that can provide valuable information and support for short-term rental operators in Fennville:

6. Fennville Area Chamber of Commerce

The Chamber can connect you with other local business owners and provide insights into the local market and community.

Phone: (269) 561-8178
Email: info@fennvillechamber.com

7. Fennville Downtown Development Authority (DDA)

The DDA supports and promotes economic development in downtown Fennville, including the growth of the tourism industry.

Phone: (269) 561-8321
Email: dda@fennville.com

8. Lakeshore Lodging Association

This regional trade association represents the interests of the lodging industry in West Michigan, including hotels, motels, and short-term rentals.

Phone: (616) 772-5000
Email: info@lakeshorelodging.org

By reaching out to these local contacts and resources, you can get the most up-to-date and accurate information about short-term rental regulations and best practices in Fennville. Building relationships with city officials, other business owners, and industry groups can also help you navigate any challenges and opportunities that arise as you launch and grow your short-term rental business in this vibrant community.

What Do Airbnb Hosts in Fennville on Reddit and Bigger Pockets Think about Local Regulations?

To get a sense of what short-term rental hosts in Fennville think about the local regulations, let's take a look at some discussions on popular online forums like Reddit and BiggerPockets.

Reddit - r/AirBnB - "Regulations in Fennville, MI?"

In this thread, a prospective host asks about the regulatory environment for short-term rentals in Fennville. Several current hosts chime in to share their experiences. The general consensus is that while the city does have some rules in place, such as licensing and zoning requirements, enforcement is relatively lax compared to larger cities. One host notes that as long as you're not causing major problems or disturbances, the city tends to take a hands-off approach.

BiggerPockets Forum - "Short-Term Rental Regulations in West Michigan"

This discussion focuses on the regulatory landscape for short-term rentals in various West Michigan communities, including Fennville. Hosts compare notes on each city's different requirements and fees, with Fennville generally seen as one of the more lenient markets. However, some hosts caution that the regulations could change in the future as the short-term rental industry grows and faces more scrutiny.

Reddit - r/RealEstate - "Investing in Fennville, MI Vacation Rentals"

In this post, an investor asks for advice on buying a property in Fennville to use as a short-term rental. Several hosts familiar with the area weigh in, noting that the city's proximity to popular tourist destinations like Saugatuck and Lake Michigan makes it an attractive market. They discuss the importance of understanding the local zoning rules and licensing process, but overall paint a positive picture of the regulatory environment in Fennville.

BiggerPockets Forum - "Fennville, MI Short-Term Rental Success Story"

Here, a host shares their experience of successfully launching and operating a short-term rental in Fennville. They detail the steps they took to comply with the city's regulations, including obtaining a rental license and passing inspections. The host emphasizes the importance of being proactive and communicating openly with city officials to build positive relationships and avoid any issues down the road.

Reddit - r/VacationRentals - "Hidden Gem: Fennville, MI"

In this post, a host recommends Fennville as an underrated destination for short-term rental investing. They cite the city's charming small-town atmosphere, access to outdoor recreation, and growing popularity with tourists. Other hosts chime in to agree, with several noting that the relatively relaxed regulatory environment in Fennville is a major selling point compared to more restrictive markets.

Overall, the sentiment among Airbnb hosts in Fennville on these forums seems to be that the city's regulations are manageable and not overly burdensome, especially compared to some larger cities. Hosts appreciate that Fennville has taken a balanced approach, with reasonable rules in place to protect public safety and neighborhood character, but without stifling the growth of the short-term rental industry.

The key takeaways from these discussions are that hosts in Fennville should do their due diligence to understand and comply with all local requirements, but that the city is generally seen as a friendly and welcoming market for short-term rentals. Hosts can build successful businesses by being responsible operators and good neighbors while contributing positively to the local community.

As one host put it on the BiggerPockets forum, "Fennville has been a great place to invest in short-term rentals. The regulations are straightforward, the city is easy to work with, and the demand just keeps growing. As long as you play by the rules and provide your guests a great experience, you can thrive here."

Disclaimer: While we here at BNBCalc strive to keep all of our city regulation guides updated and accurate with all the latest local laws, we still do not suggest using them as your sole or primary source for local regulations. We also do not recommend you rely on the third-party sources we link to or reference, and we are not responsible for any of the information on these third-party sites. These guides are for entertainment purposes only and only provide basic information and should not be considered as legal advice.

We highly recommend directly contacting the responsible parties for each city and hearing what their officials have to say. Ultimately, it's your responsibility as an investor to ensure you fully comply with the local laws, and it's best to speak with professionals before making an investment decision.