Detroit, MI – Rental Regulations Guide 2025

Last updated: March 2025

7 Step Guide to Detroit Rental Regulations

1. City Overview: Short-Term Rental Landscape

Detroit, Michigan, has a growing short-term rental (STR) market, offering unique opportunities for investors. The city has implemented specific regulations to balance the economic benefits of STRs with neighborhood stability. Operators must comply with zoning laws and licensing requirements to legally operate a short-term rental in Detroit.

For the most up-to-date short-term rental data, including occupancy rates, average daily rates, and revenue trends, visit Chalet Market Dashboard.

2. Quick Facts

  • Chalet Detroit Investor Potential & Regulation Score: Moderate Friendly 77/100
  • Permit Required? Yes, a Rental Registration Certificate is required.
  • Zoning Restrictions? STRs are allowed only in permitted zoning districts.
  • Maximum Occupancy: Subject to local zoning and housing regulations.
  • Tax Requirements: STRs must comply with local and state tax regulations.
  • Renewal Frequency: Annual renewal required.
  • Insurance Required? Recommended for liability protection.
  • Enforcement Level: Active enforcement, including penalties for non-compliance.

3. Getting Started with STRs in Detroit (Step-by-Step Guide)

Step 1: Verify Zoning Compliance

Before applying for a short-term rental permit, property owners must ensure their rental is in a zoning district where STRs are permitted.

  • Check Zoning Maps: Use the Detroit Rental Map to confirm property eligibility.
  • Contact Detroit Planning & Development Department:

Step 2: Obtain a Rental Registration Certificate

All STR operators must register their rental property with the City of Detroit. The application process includes:

  • Completed Rental Registration Application
  • Proof of Property Ownership
  • Valid Government-Issued ID
  • Tax Registration Documentation
  • Zoning Compliance Verification

License Fees:

  • New Rental Registration: Fees vary based on property size and type.
  • Annual Renewal Fee: Required every year.

Where to Apply:

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Step 3: Submit Required Documents

STR operators must ensure all required documents are submitted before the application is processed. The application can be completed online or in person.

Online Application Process:
  1. Visit the Detroit Rental Registration Portal.
  2. Ensure all required materials are gathered, including:
    • Rental Registration Application
    • Proof of Ownership
    • Valid ID
    • Zoning Compliance Verification
    • Tax Registration Documentation
  3. Submit the application online.
  4. The review process begins after submission, following this sequence:
    • BSEED: Reviews application and zoning compliance.
    • Fire Marshal: Conducts a safety inspection (if applicable).
    • Revenue Department: Collects fees and issues the certificate.
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Physical Application Process:
  1. Complete the Rental Registration Application.
  2. Gather all required documents.
  3. Submit the application in person at:
    • Detroit BSEED Office
      • Address: 2 Woodward Ave, Suite 401, Detroit, MI 48226
      • Phone: (313) 224-2733
      • Email: bseed@detroitmi.gov

Step 4: Tax Registration & Payment

STR hosts are required to collect and remit applicable taxes.

Tax Breakdown:

  • Michigan State Lodging Tax: Variable
  • City of Detroit Lodging Tax: Subject to local tax policies

How to Pay:

Step 5: Health & Safety Compliance

STRs must meet local health and safety standards, including:

  • Fire & Safety Standards: Smoke detectors, carbon monoxide detectors, and fire extinguishers.
  • Building Codes: Compliance with structural and occupancy safety regulations.
  • Occupancy Limits: Based on zoning laws and property classification.
  • Property Inspections: Required under the 2024 Rental Ordinance.

5. Key Considerations for Investors

  • Investment Potential: Detroit’s STR market is developing, with regulatory frameworks in place.
  • Regulatory Trends: The city enforces STR regulations, and operators should monitor updates.
  • Community Compliance: STR hosts should verify neighborhood-specific restrictions.
  • More Information: Contact Detroit BSEED at (313) 224-2733 and visit Chalet Market Dashboard.

6. Taxes and Financial Obligations

Operating a short-term rental in Detroit requires compliance with local and state tax obligations. STR hosts must collect and remit lodging taxes, which vary depending on the length of stay and the type of rental property.

Tax Breakdown:

  • Michigan State Lodging Tax: Variable, dependent on property classification.
  • City of Detroit Lodging Tax: Subject to local tax policies, applicable to short-term stays.
  • Federal Tax Considerations: STR operators must report rental income and may be eligible for deductions related to property management, maintenance, and depreciation.

How to Register and Pay:

  • Taxes may be collected by rental platforms such as Airbnb and VRBO, but owners should verify compliance independently.
  • STR operators must register their rental property with the Detroit Revenue Division to ensure tax remittance obligations are met.
  • Filing Frequency: Taxes must be reported and remitted on a periodic basis, which varies by jurisdiction and rental platform agreements.

Resources for Tax Compliance:

  • Detroit Revenue Division
  • IRS Guidance on Rental Income: Hosts should review IRS Publication 527 to understand federal tax obligations related to STR income.

It is recommended that STR operators consult with a tax professional to ensure full compliance with all applicable tax laws and deductions available to property owners.

For up-to-date financial obligations, tax schedules, and filing instructions, visit Detroit Revenue Division or call (313) 224-3310.

7. How Chalet Can Help

  • Local Realtor Partnerships:
    Looking to invest in short-term rental properties? Chalet’s nationwide network of specialized realtors is here to guide you. Our experts understand the nuances of vacation rentals and local markets, helping you identify high-ROI properties and navigate complex regulations with ease. Best of all, their services come at no extra cost to you. Click here to connect for free.
  • Chalet’s Regulation Updates:
    Chalet email subscribers receive updates regarding regulatory changes in cities. Subscribe here!
  • Connect with Local Experts:
    At Chalet, our goal is to enable everyone to create wealth with short-term rentals. We bring the experience and expertise to optimize your rental property. Connect with a STR professional in your area here.

Recommended Tools and Resources

  1. Chalet STR Market Insights Tool
    Chalet offers a free market analytics tool that allows investors to explore detailed data on occupancy rates, average daily rates, revenue estimates, and market trends for specific cities. This tool helps investors make informed decisions based on comprehensive insights. Access the STR Market Insights Tool.
  2. Airbnb Income Guide
    Investors can dive into this guide to better understand how to maximize income from STRs. It covers critical aspects such as dynamic pricing, guest management, and how to boost profitability through effective listing strategies. Read the Comprehensive Guide to Airbnb Income.
  3. Chalet Investor Guides
    These investor guides provide city-specific insights, including tax obligations, regulations, investment potential, and detailed market data. Investors can select from over 200 city guides to find data tailored to their target market. Explore Investor Guides.
  4. AI-Powered Market Comparison Dashboard
    Chalet’s market comparison dashboard offers a powerful tool for comparing different STR markets based on yield, occupancy rates, and other key performance indicators. This tool is particularly useful for investors looking to diversify across different regions. Check out the Market Dashboard.
  5. Chalet STR Calculator
    The free Chalet STR Calculator is a powerful tool designed to help short-term rental investors evaluate potential property performance with ease. It enables users to estimate revenue, analyze expenses, and project profitability for any STR market, streamlining investment decisions. Whether you’re comparing properties or exploring new opportunities, the Chalet STR Calculator simplifies the process with precision. Learn more about the Chalet STR Calculator.

DISCLAIMER: The information provided in these guides is for entertainment and general informational purposes only. It may not reflect the most up-to-date regulations, and Chalet is not responsible for any inaccuracies or changes to the information on third-party sites. These guides are not legal advice. We highly recommend verifying details directly with local authorities and consulting professionals before making any investment decisions. Ultimately, it is your responsibility as an investor to ensure compliance with local laws.

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