Seattle Neighborhoods - Price to Rent Ratios

8 Replies

Hi All,

What are the best Seattle neighborhoods in terms of price to rent ratios? 

For purposes of this post, please share thoughts on neighborhoods within a 15 mile radius of Seattle (e.g. Shoreline, Columbia City, Beacon Hill, etc.). Thank you!

ALL CAP rates (see what I did there) suck in seattle, as they do in most large metro areas. Right now in city listed properties often the advertised cap rate is 3-4 percent; in many cases these represent properties which are being marketed for redevelopment or with the expectation that new buyers will increase rents 20-30-40 percent. Outside the city 5 percent-ish is more the norm. Your best bet for comparatively higher cap rates is the south end (burien, renton, kent, auburn, des moines, etc). Though some of those areas are quite 'hot' since everybody else who wants a strategy of more than just appreciation is looking there too. OR look further out - outskirts of tacoma, and in more rural towns - if you can find someplace that has a viable economy or proximity to larger metro area many such towns also have a shortage of good housing.

With a dense military population and good growth, Silverdale is a great area to consider investing. I've had our 4-plex owned in Silverdale since 2006 and never had any issues with vacancies. 

Thank you for your replies. For clarification, I am looking to purchase a primary residence in the Seattle area in which I can rent/Airbnb a room or two to reduce my monthly mortgage payment. Looking for an up and coming neighborhood that provides reasonable price to rent ratios relative to other Seattle neighborhoods.

Although I am not expecting to acquire a cash flowing property in Seattle for this primary residence purchase, I am interested in purchasing an investment property outside of the Greater Seattle area for a second acquisition. Thank you for the recommendations.

Hi Matthew,

A house hack in Seattle is completely within reason.  If your goal is looking to lessen your total monthly payment, and not completely cover it, you'll be able to do so.  Your budget / price range, and other criteria would somewhat dictate which areas you'd want to search within.  Some areas you might consider close to the city/down town would be Greenwood, Fremont, Capitol Hill and U-district.

Columbia City is pretty saturated as of a couple years ago. Beacon Hill was up and coming 2 years ago - and I am speaking mostly about NORTH Beacon Hill. Central and South Beacon are still gentrifying and you will see some new construction SFH in the area. If you're planning to AirBNB I'd stay closer to Seattle DT and close to mass transit.

I might suggest Northgate cause the lightrail station is slated to open in 2021. In the mean time, there's a big park n ride there too. 

Central district, Cap hill, fremont, u-dist/ravenna are still good neighborhoods for AirBNBs. There's also a new light rail station in Ravenna opening in 2021 - its a great established neighborhood and close to the UW. 

If you're looking for more affordable homes, I'd look further down the light rail line like Othello Station or the Columbia City station (which is not really in Columbia City). 

@Matthew Pietrangelo take a look at Poulsbo and Kingston also. With the Bainbridge Ferry and recently-launched fast ferry from Kingston, both are viable commute options and have great potential for AirBnB. Lots of summer activities and weddings in this area in spring and summer, especially. PM me for more info on North Kitsap. :-)

I would recommend starting with living where you want in Seattle, then look for a property there that is suitable to Airbnb/ roommates. I have a 2 BR townhouse in CD that I house hack through Airbnb and it does ok (pays half my mortgage since we have family/ friends visit). Summers are hot in terms of tourism and winters are cold. I've heard of people with big 5BR houses that can make a lot of money running high quantity lower cost, but that's a grind. The high end can command higher rates, but I'm sure they have high vacancy off season. I think it's probably easier to find better deals in other markets than try to focus too much on Seattle Airbnb'ing unless it's your primary strategy. I consider Airbnb an expense reducer, not income.

Hi @Matthew Pietrangelo.  House hacking is doable practically anywhere you like.  Just like Flips and BRRRs, it's most important to buy right.  The dwelling, down payment, interest rate, rental type, preferred renter profile, and more are all important elements of the model.  Look for homes that will meet your personal needs for at least a 5-year period and then honestly assess the type of rental candidate each will attract.  For instance, I helped an Amazon employee into a brand new Magnolia townhome with the intention of house hacking and he's doing incredibly well.  It's a 3BR and he AirBnB's the middles two rooms w/ private bath, while sharing common areas.  He leverages his Amazon job, specifically targeting traveling Amazon employees by posting on internal Amazon boards and carefully crafting marketing language in his AirBnB / VRBO ads.  In this case, the income covers his mortgage at about 60% occupancy.  Each scenario is different, of course, but it's totally possible to create a house hack where the majority of debt is serviced by rental income and location is only one piece of the puzzle and only as important (relative to the other elements) as you choose for it.

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