Puget Sound - First Purchase (short term rental vs SFR vs duplex)

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Puget Sound - First Purchase (short term rental vs SFR vs duplex)

Casey Kernan
Member since 2022 · 6 posts · 5 votes

I would like to make that first move and purchase a property.  I'm working towards preapproval and have been following the market here in the Puget Sound for a few years now and prices have certainly climbed.  I am hoping to make that first move into real estate and with this climate (raising rates, prices, competition, etc) I have some hesitancy.

Currently living in Bremerton/Silverdale (Kitsap Peninsula) with multiple navy bases, hospital, college and short ferry to downtown Seattle. I'm starting to see some price reductions finally. I have also been looking at areas outside Olympic National Park up in Port Angeles, both places you can still find some decent sub 400k homes 3b homes. I have considered both STR/Airbnb (airdna reports >$3k revenue monthly in Port Angeles -? how accurate this is) vs a long term tenant situation in a SFR or duplex. Using some cash flow calculators, the homes in Bremerton don't cash flow as well as STR but do have more potential for appreciation....with these crazy prices in Puget Sound I do think about out of state investment too...hmmmm

What type of property was your first purchase and would you have done it different?

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Sherief Elbassuoni
Realtor · Bellevue, WA · Member since 2019 · 882 posts · 1k+ votes
4y

@Casey Kernan, Bremerton is a pretty strong market because of the naval base. Vacancy is typically low there as well because of the high and consistent demand from the naval.

Even if STR is grossing $3K, the net may be way less. If you do not manage yourself, some STR management companies charge 25%-35%. You also need to take into consideration all the other fees like cleaning fees and if this is part of the management % or not

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  • Joshua MessingerBusiness Member
    Property Manager · Poconos, PA · Member since 2020 · 443 posts · 264 votes
    4y

    Hey @Casey Kernan! 

    I would recommend using Pricelabs vs. Airdna as I believe they pull more accurate results than Airdna does. 

    It seems like this may be a good area to get started for your first STR given it's around ample attractions/amenities/strong commercial district. Prices do seem a bit steep for a property but you would be more familiar with the market up there yourself so if the prices are right I wouldn't hesitate to move forward if the numbers work out!

    I'd love to help you run some analysis on the area you are looking at and answer any other questions you may have. Don't hesitate to reach out! :)

    Live Free, 

    Josh 

    [email protected]484-986-5012
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  • Bob Malecki
    Investor · Kingston, WA · Member since 2008 · 1k+ posts · 1k+ votes
    4y

    Frankly, I would focus on Bremerton. With the naval shipyard employing thousands of workers and Seattle over spill of employees who commute via the ferry, Bremerton has much more upside over the long term. We purchased a duplex in the Phinney Bay area in 2007. It barely cash flowed at that time but now we are seeing over $900 per door net profit. Our tenants are professionals who have been renewing their lease with us for the past four years and one of them is a nuclear engineer at the naval shipyard for instance. 

    Bremerton is not the prettiest town in our area, but it consists of a large population of middle class workers who may not be able to afford to buy a home due to the rise in prices and mortgage rates.

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  • Casey Kernan
    OP
    Member since 2022 · 6 posts · 5 votes
    4y

    Appreciate the support and advice @Joshua Messinger and @Bob Malecki

    Bremerton certainly does seem like a good market. Manette, particularly seems to be the next little West Seattle.  I am in the medical field and could rent to training residents and nurses as well.

    The market is saturated in Port Angeles with STR and I think locals are having difficulty finding housing. I would hate to make that problem worse.

    I like the idea of having my first rental locally so that I can learn the struggle and time it takes to self manage. If it became too much or i moved I could also meet with local property managers and find a reliable one.


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  • Sherief Elbassuoni
    Realtor · Bellevue, WA · Member since 2019 · 882 posts · 1k+ votes
    4y

    @Casey Kernan, Bremerton is a pretty strong market because of the naval base. Vacancy is typically low there as well because of the high and consistent demand from the naval.

    Even if STR is grossing $3K, the net may be way less. If you do not manage yourself, some STR management companies charge 25%-35%. You also need to take into consideration all the other fees like cleaning fees and if this is part of the management % or not

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