What Lakefront Buyers Should Know Before Purchasing

Information reviewed and updated: August 2026

For some Northern Michigan lakefront buyers, the ability to occasionally rent their home or cottage is an important part of the purchasing decision. Short-term rentals can provide supplemental income while allowing an owner to retain the property for personal and family use.

However, short-term rental regulations are generally established by the township or village rather than by the lake itself. Two homes on the same lake can sometimes fall under different jurisdictions and therefore be subject to different rules.

There is another important consideration for buyers:

A home that has historically operated as a short-term rental does not necessarily give the new owner the automatic right to continue renting it.

STR licenses and permits may expire upon sale, require a new application, or be subject to licensing caps and other restrictions. Buyers should therefore investigate both whether STRs are permitted and whether an existing STR approval transfers to them after closing.

BUYER TIP: If short-term rental income is important to your purchase, verify STR eligibility before making an offer. A property's previous rental history does not necessarily mean the right to rent transfers to a new owner.

At-a-Glance STR Guide

Lake Ann & Bryan Lake

Lake Ann and nearby Bryan Lake require additional attention because the exact location of the property determines which municipality's rules apply.

The Village of Lake Ann has adopted a Short-Term Rental Ordinance and requires a license before a dwelling is rented for fewer than 30 nights. The Village license is valid for one year or until a change in ownership, whichever comes first, and licenses expire December 31.

Properties outside the Village but within Almira Township fall under Almira Township regulations instead. Almira Township uses a site-plan review process for STRs. Its current fee schedule lists $500 for a major STR site-plan review and $250 for renewal.

What Happens When an Existing STR Is Sold?

For both jurisdictions, ownership change is important.

The Village of Lake Ann ordinance states that its license lasts only until a change in ownership.

Almira Township's current application expressly states that a change in property ownership voids the STR permit and that the permit does not transfer to the new owner.

A buyer purchasing a cottage that has been rented successfully for years should therefore not treat the seller's approval as a permanently grandfathered property right. The new owner should confirm eligibility and obtain the approval required under the rules then in effect.

Bryan Lake – An Important Distinction

Bryan Lake is a small private lake immediately north of Lake Ann. Its scale, private character and lack of designated public access make it different from Lake Ann from both a recreational and potential vacation-rental standpoint.

A buyer considering Bryan Lake specifically for rental use should verify the property's exact municipal jurisdiction, applicable STR requirements, private restrictions and any deed or association limitations.

Bass Lake

Bass Lake requires property-specific verification because portions of the lake fall within both Long Lake Township and Green Lake Township.

Long Lake Township Portion

Long Lake Township permits STRs but requires a Short-Term Rental Certificate.

Current program requirements include:

• Floor plan
• Site plan
• Well and septic status documentation
• Current septic inspection
• Guest capacity based upon septic capacity
• Property manager available 24/7
• Quiet hours from 10:00 p.m. to 7:00 a.m.
• Designated parking
• Current Township application payment of $600

What Happens When the Property Is Sold?

Long Lake Township's certificate does not continue indefinitely with the real estate; the ordinance provides that it is valid for one year or until the dwelling is sold.

A purchaser who wants to continue STR use should obtain the required certificate under the new ownership.

A strong Airbnb or VRBO history may demonstrate the property's rental appeal and past income, but it should not be represented as a permanently grandfathered STR right.

Green Lake Township Portion

Properties on the Green Lake Township portion of Bass Lake fall under Green Lake Township's annual STR licensing program.

Green Lake Township currently provides an STR ordinance and application process, but a buyer should confirm directly with the Township how a change of ownership will be treated for the specific property before relying on continued rental use.

Buyer takeaway: On Bass Lake, identifying the township is the first step. The same lake can have different STR procedures depending upon the property's location.

Green Lake

Green Lake Township maintains an established short-term rental licensing program. The Township currently provides an STR ordinance and application process through its zoning department.

Because a purchaser's ability to rent after closing is the key issue, a buyer should not assume that a seller's rental history automatically guarantees the same approval under new ownership.

Before purchasing a Green Lake home specifically for vacation-rental purposes, the buyer should obtain current confirmation from Green Lake Township regarding:

• Property eligibility
• Effect of a change in ownership
• Permitted occupancy
• Septic capacity
• Application requirements
• Any outstanding STR violations

This verification is particularly important when rental income is part of the buyer's financial decision.

Spider, Arbutus, George, High, Tibbets, Indian, Rennie & Spring Lakes

These lakes fall within East Bay Township and therefore share the same Township short-term rental licensing requirements.

East Bay Township permits short-term rentals, but a valid STR license must be obtained before a property can be advertised or operated as a short-term rental. The Township also requires a minimum stay of seven nights under its current STR rules.

Understanding East Bay Township's License Cap

East Bay Township limits short-term rentals to a total of 145 licensed properties township-wide.

There is not a separate allocation for Spider Lake, Arbutus Lake, Rennie Lake or the other individual lakes.

The Township currently reports that the 145-license cap has been reached and no new licenses are presently available.

Existing license holders have a universal November 1 renewal deadline. If active licenses fall below the cap, the Township announces an application window.

New licenses are awarded on a first-come, first-served basis to completed applications that satisfy all requirements.

The current annual STR license fee is $450 per property.

What Happens If a Buyer Purchases an Existing East Bay STR?

An East Bay Township STR license does not transfer with an ordinary sale or other conveyance of the property.

The ordinance permits transfers only in certain limited circumstances, including specified immediate-family transfers and certain reallocations of ownership interests within an entity.

That means a home could:

• Have operated successfully as an STR for years
• Have an existing STR license under the seller
• Have established Airbnb or VRBO bookings
• Have a strong rental-income history

Yet an unrelated purchaser may not be able to continue operating it as an STR after closing.

Because the 145-license cap is currently full, a new buyer could have to wait for a license to become available and then compete during an announced application window.

Is There a Grandfather Clause?

East Bay's transition rules allowed qualifying existing operators to continue under the licensing system, subject to renewal and compliance.

That should not be interpreted as permanently grandfathering the property itself for every future owner.

In practical terms, the property's history as an STR and the buyer's future legal ability to operate an STR are two separate questions.

How Can a Buyer Pursue an East Bay STR License?

If a buyer purchases a property without a transferable license, the buyer should monitor East Bay Township's STR program for openings.

When active licenses fall below the cap, the Township publishes notice of:

• Number of licenses available
• Application window
• Date and time applications will be accepted
• Method for submitting the application

Applications are processed in the order received, and the first completed qualifying applications receive the available licenses.

Applicants should be prepared with ownership documentation, floor and site plans, property photographs, applicable subdivision or condominium documents, and required well/septic documentation.

East Bay's current checklist also requires proof that subdivision restrictions or condominium bylaws do not prohibit short-term rentals.

East Bay Buyer Designation

SHORT-TERM RENTALS: PERMITTED – LIMITED LICENSE AVAILABILITY

East Bay Township permits licensed STRs but maintains a 145-property township-wide cap that is currently full. An existing license does not transfer through an ordinary property sale. Buyers should verify the property's license status, any limited transfer eligibility and future license availability directly with East Bay Township before purchasing.

A Critical Question for Every Lakefront Buyer

When viewing a home advertised as an “existing short-term rental,” “successful vacation rental,” or “established Airbnb,” a buyer should ask:

Does the legal ability to operate this property as an STR continue after I become the owner?

The answer should be established independently of the property's rental history.

An established rental history can be valuable information, but past rental income should not be used to project future income until the buyer confirms that short-term rental authorization will continue under the new ownership.

Ideally, the buyer should determine:

• Does the seller currently hold a valid STR license or permit?
• Does that license terminate upon sale?
• Does the license belong to the owner, property, or both?
• Is there a grandfather provision?
• Does grandfather protection survive a change in ownership?
• Must the purchaser submit a new application?
• Is there a cap on new licenses?
• If the cap is full, how are future licenses awarded?
• Are there HOA, condominium or deed restrictions?
• Does the septic system support the desired number of rental guests?
• Are there outstanding violations associated with the property?

For a buyer depending upon future rental income, these questions should be addressed before the transaction becomes unconditional.

“Grandfathered” Does Not Always Mean What Buyers Think

The term grandfathered can be misleading in short-term rental discussions.

A property may have been legally rented before a new ordinance was adopted, but that does not necessarily create a permanent STR entitlement attached to the real estate.

Depending upon the municipality, an existing owner may be allowed to continue operating while maintaining a valid license. A sale may terminate that license and require the purchaser to qualify under the rules in effect at that time.

Therefore, rather than asking only:

“Has this property been grandfathered?”

buyers should ask:

“Will the existing STR authorization remain valid after I purchase the property?”

That is the more important question.

What Buyers Should Investigate Before Purchasing

Municipal approval is only one part of determining whether a lakefront property can successfully operate as a short-term rental.

A buyer should verify:

• Township or village jurisdiction
• Current STR license or permit
• Transferability following sale
• Grandfather status, if applicable
• Current license availability or caps
• Zoning requirements
• Maximum overnight and daytime occupancy
• Septic-system capacity
• Required inspections
• Parking requirements
• Noise and quiet-hour restrictions
• Local caretaker/property-manager requirements
• HOA, condominium or association restrictions
• Recorded deed restrictions
• Insurance requirements
• State and local tax obligations

A property may satisfy municipal STR regulations and still be restricted by a homeowners association, condominium documents or private deed restrictions.

A Lakefront Buyer's Perspective

For buyers who want to use their Northern Michigan lakefront home primarily for themselves while renting it during selected weeks, Green Lake, portions of Bass Lake, and qualifying properties in the Lake Ann area may offer STR possibilities under current regulations, subject to property-specific approval.

The East Bay Township lakes — including Spider, Arbutus, George, High, Tibbets, Indian, Rennie and Spring — require considerably more caution for a buyer purchasing today specifically with short-term rental plans because the Township's current 145-license cap is full and an existing seller's license does not transfer through an ordinary sale.

The important question is therefore not simply:

“Are short-term rentals allowed on this lake?”

A better question is:

“Can this particular property legally be operated as a short-term rental after I purchase it?”

That distinction can make a significant difference when evaluating a Northern Michigan lakefront home.

Important Note

Short-term rental ordinances, licensing requirements, fees and availability can change. Regulations may also differ by township, village, zoning district, subdivision, association and individual property.

This information is intended as a general buyer resource rather than a representation that a specific property qualifies for short-term rental use. Buyers considering STR use should verify current requirements with the applicable municipality and review deed, HOA or condominium restrictions before purchasing.

Before You Buy

If short-term rental potential is important to your lakefront search, it is worth identifying that priority before you begin evaluating individual properties.

A cottage with an established rental history may look like an obvious opportunity, but the more important question is whether you, as the new owner, will be permitted to continue that use after closing.

Municipal licensing, ownership changes, septic capacity, association restrictions and even which side of a lake the property is located on can affect the answer.

Understanding those details early allows us to focus your search on lakefront properties that better align with both how you want to enjoy the property and how you may want to use it when you're not there.