RANK #31 of 50 Better · DepreciMax Score 65 Lake

Traverse City, MI

Northern Michigan's flagship Great Lakes STR market. MI full conformity plus cherry-country and lakefront inventory dominated by cottage-style STRs with docks, fire pits, and outdoor kitchens. Land ratios are competitive for a resort market, and the seasonal STR demand supports amenity-heavy inventory that classifies well under §168(k).

Median Year 1 Deduction

$126,000

on a $525k STR · range $107k–$145k · ~$47k federal tax savings at 37%

Ranked #31 in the 2026 STR Bonus Depreciation Market Study — see the full 50-market analysis and category breakdowns.

Representative short-term rental home in the Traverse City market

Median Listing Price

$525k

Sample of ~50 active STR-suitable listings analyzed.

Median Land Ratio

23%

Lower is better — leaves 77% of purchase price as depreciable basis.

Bonus-Eligible %

24.0%

Median % of purchase price classifiable as 5-yr or 15-yr property under §168(k).

Federal Savings @ 37%

$47k

Median federal tax savings on a $525k purchase. Range $40k–$54k.

Short-Term Rental Regulations — Restricted

Traverse City permits whole-home vacation rentals only in commercial and mixed-use districts (HR, C-1 through C-4, D-1 through D-3) under Chapter 870; unhosted STRs are prohibited in single-family residential zones. Permit: Yes · Cap: — · Min stay: None · Owner-occ.: No. Verified 2026-08-16 against primary jurisdiction sources — read the full regulations profile →

Printable field guide

Get the printable Traverse City house-hunting guide

Pre-tour checklist · amenity mix · 5 diligence questions · fits on 3–4 printed pages

Open guide

✓

Michigan State Conformity — Full

Michigan conforms fully to federal §168(k). Investors get the full federal Year 1 deduction (~$47k typical at the median) PLUS the state-level benefit on the Michigan return — no add-back required. This is the ideal scenario for bonus depreciation math.

Why Traverse City ranks #31

1. Land ratio drives the math

Lake-adjacent inland properties get the best of both worlds: water-front amenity premium without coastal land pricing. Traverse City's land ratio of ~23% leaves roughly $404k of depreciable basis on a $525k purchase.

2. Full state conformity stacks federal and state benefits

MI conforms fully to federal §168(k), so Traverse City investors get both the federal AND state deduction. The Total Tax Benefit column in the DepreciMax Top 50 reflects this stacking — federal savings at the 37% top marginal rate plus state savings at MI's top marginal rate. Same property in a decoupled state would produce the same federal deduction but no state add-on.

See live Traverse City listings

Every active Traverse City short-term rental listing, ranked by estimated bonus depreciation potential. Sort by price, beds, or DepreciMax medal tier. Free — no signup.

Browse all live Traverse City listings, ranked by bonus depreciation potential →

Permit cap

—

Min stay

None

Owner-occupancy

Verified as of 2026-08-16 against primary jurisdiction sources. See the full Traverse City STR regulations page for jurisdiction breakdown, ordinance section numbers, and 5-question FAQ.

How the score is calculated

Traverse City's DepreciMax Score is the aggregate score across ~50 active listings run through our proprietary algorithm. We use multiple inputs — including land values and AI photo recognition — closely calibrated over time against a completed cost segregation study on a benchmark short-term rental.

More detail in the Top 50 Markets methodology section.

Snapshot date: May 2026. Sample listings are real active listings from Realtor.com — actual addresses shown. Bonus depreciation outcomes vary by individual property; this report estimates ranges for typical purchases. Not tax advice — consult your CPA before making investment decisions.

Score live Traverse City properties — for your specific deal

Run any active Traverse City listing through the DepreciMax property scorer. Free market search shows you every listing ranked by bonus depreciation potential. $99 per detailed AI report on a specific property — closely calibrated to a formal cost segregation study.

Score Traverse City Properties →

Want the full Top 50 report?

All 50 markets ranked by bonus depreciation score, with category filters and the full methodology.

View Full Report →

Traverse City vs Lake Cumberland vs Door County — bonus depreciation comparison

Head-to-head from the 2026 DepreciMax STR Bonus Depreciation Study — rank, price point.

Market	Rank	Median Bonus %	Median Y1 Deduction	State Conformity
▸ Traverse City	#31	24.0%	~$126k on $525k STR	Full
Lake Cumberland	#1	27.1%	~$89k on $330k STR	Full
Door County	#74	21.4%	~$112k on $525k STR	Partial

Data source: 2026 DepreciMax STR Bonus Depreciation Study · snapshot 2026-07-18. See the Aspen vs Lake Cumberland writeup for the full head-to-head methodology.