Tell me about your zip codes
Hi everyone.
I’ve been trying to exercise doing neighborhood analysis as I work to refine my investing strategy. As the saying goes, in real estate it’s location location location!
So to that end, I’d love to hear from those of you who invest in the Western Washington area. If you’re open to answer these few questions:
1) what kind of investing do you focus on?
2) what are your target Zipcodes and why do you like them?
3) which areas do you absolutely avoid and why?
4) Any resources you’d recommend for market/neighborhood analysis?
Thank you!!
Most Popular Reply
@Christina Greaves, it all depends on your goals.
If you want pure, crazy high appreciaiton, you will need to focus on East side cities (Bellevue, Kirkland, Sammamish, Redmond, ....)
If you want DADU, you will need to focus on (Seattle, Tacoma, Kirkland)
If you want Airbnb income, you will need to focus on cities like (Baring, Gold Bar, Skykomish,.....)
and do on, and so forth.....
So you will need to define your goals first before picking the zip code
Western WA is a strong appreciation investment. With the way current rates are today, it is hard to get something to cash flow. I know people will say "If you have enough downpayment then anything can cash flow". I completely disagree with that strategy because I also care about my ConC return but to each their own.
As far as area go, I like the majority of Pierce County and parts of South King County for investments. The reason for that is it is a little more affordable down here and we are closer to JBLM. The further North that you get, the higher the prices.
I will say that if you are looking for a property and come across a screaming deal, use caution. In Real Estate, if it's too good to be true, it is usually (not always) too good to be true.
If you do not own a home, I would strongly urge you to consider house hacking. Anywhere in Western Washington in all honesty. Pay down your mortgage while reaping the benefits of appreciation all in one.
Hope this help. Best of luck!
Christina,
I'm not from your area so I can't speak to locations but I can speak to an investing strategy that is great for newbies (I'm also a newbie). I always will advocate for house hacking. Nathan mentioned it above and I highly recommend that you look into this strategy.
It could be buying a SFH and renting out rooms or buying a multifamily and renting out units.
You can drastically decrease your living expenses while building equity. You can also get into it with relatively low money down.
All the best!
Zipcodes: 32459 32550 32541 Tight inventory, lots of demand, tremendous appreciation and huge destination zone.
Anything that is below a B minus property or area I try to avoid unless im trying to solely focus on higher cashflow.
Check out my blog on my website
Thank you both!
Im already house hacking :) and me and my partner already own 2 investment properties, both SFH with long term renters. But these were not necessarily "intentional" purchases for RE investing, we just each owned a home before we met and decided to move in together buying a separate house in a new town where we moved due to proximity to my partner's work location.
So now for the first time I'm looking to make an intentional decision on which neighbors/strategy to hone in on. I just know that to start I'd rather stay local, but I'm still defining whether to stick to LTR versus venturing on STR for example. Hence my questions.
I’m really looking for more detailed beta from other investors that know the area well and differences between how investors think about neighborhoods depending on their investing strategy..
#5 House Hacking Contributor
- Investor
- CO
1) Multi families 2-4 & 5+ commercial
2) The north end of Seattle. Lots of things will be helpful to investors:
- Population growth will not be supported by the city's growth plans. WA state's recent actions to force cities to build middle housing will help, but not enough.
- Everett: designated as the Navy's future homeport for the next generation of 12 guided missile frigates. First ship scheduled to show in 2026. 428 navy personal per ship, plus support staff and families
- A great deal of lots will benefit from the new WA middle housing laws. Think ADU & DADUs.
- Future development in the port of Everett: 60k sqft retail and 200k sft commercial
- Lynnwood's growth plans is rather restrictive for high density multi family growth
- Massive investments in Maltby, Cathcart, Arlington & Maryville's signaling developer's confidence in lack of housing and growth opportunities. These projects will take years to complete and not likely to address demand.
- Jobs are moving North, for example, Tesla signed a lease for 245k sqft warehouse in Marysville.
3) I avoid King County and will not invest in Seattle.
4) Depends what you want to look at and for what strategy. Far too many tools out there. Forecast data is hard to come by and very much city by city. The good stuff, however you have to dig up in news stories, public announcements, investor meet up and notes from the cities/counties meetings.
Hi Julien,
I am curious to hear why is it that you avoid King County and specifically the Seattle area? Curious to hear your thoughts on this one. Thanks!
It's great to hear that you're already making strides in your real estate journey with house hacking and two investment properties, even if they weren't initially planned as such. Transitioning from accidental to intentional investing is a significant step, and it sounds like you're eager to make informed decisions. Here are some considerations and insights that might help you refine your strategy:
Understanding Local Dynamics:
Since you prefer to start by staying local, it's an excellent idea to leverage your existing knowledge of the area. Consider factors like job growth, schools, amenities, and neighborhood trends to identify areas with strong investment potential.
Long-Term vs. Short-Term Rentals:
The choice between long-term rentals (LTR) and short-term rentals (STR) depends on your goals and the local market. LTR typically offer stability and steady income, while STR can yield higher returns but may require more active management. Assess your tolerance for hands-on involvement and your financial objectives.
Market Research and Analysis:
Dive deep into market research for your local area. Explore rent-to-price ratios, vacancy rates, and historical appreciation. These metrics can guide your decision on which neighborhoods align best with your chosen strategy.
Property Type:
Consider the type of properties that dominate your local market. Are single-family homes (SFH) more prevalent, or is there a demand for multi-family units or other property types? This can impact your investment choices.
Neighborhood Demographics:
Pay attention to the demographics of potential tenants or guests. Are there specific demographic groups that are more likely to rent in your area? Understanding your target market can inform your property selection.
Risk Assessment:
Evaluate the risks associated with your chosen strategy. LTR and STR have different risk profiles. For instance, STR can be more susceptible to seasonality and regulatory changes, while LTR offers more stability but might have longer-term tenant commitments.
Networking and Learning:
Connect with local investors who have experience in both LTR and STR. Their insights can provide valuable "beta" on the nuances of your specific market and how different strategies play out in the area.
Exit Strategy:
Consider your long-term goals. How do your investment choices align with your exit strategy? Whether you plan to hold properties indefinitely or sell them down the line, your strategy should support your ultimate objectives.
Remember, there's no one-size-fits-all approach in real estate investing. Your strategy should reflect your personal goals, risk tolerance, and local market conditions. Continuously educate yourself, network with local investors, and gather data to make well-informed decisions. With the right approach and a strong foundation, you're on your way to successful intentional real estate investing. Feel free to share more details about your local market, and we can discuss specific neighborhoods and strategies further!
#5 House Hacking Contributor
- Investor
- CO
Regulation risk and unfriendly landlord environment.
This can be mitigated, but I choose to derisk that part of my business and there are plenty of other great markets. Prices points are also better.
To add, there's still good options when it comes to development if you're not planning on building to hold. Lots of great AADU/DADU options if you're trying to exit upon completion.
@Christina Greaves, I'm doing some LTR, MTR, STR, and development. There's pros/cons to every investing strategy, so you'll want to define clear goals for yourself. On my end, I started off by building up enough cash flow to feel comfortable to quit my job. Since then, I've continued to grow my STR portfolio while simultaneously starting to venture into development (where you can multiply your capital more quickly).
I tell people all the time that you want to have a mix of wealth-generating (buy and holds) & capital-generating (flips, W2, development) investments so that you can keep growing.
#5 House Hacking Contributor
- Investor
- CO
Great points @Eric Yu
It always starts with goals and chosen strategy.
@Christina Greaves, it all depends on your goals.
If you want pure, crazy high appreciaiton, you will need to focus on East side cities (Bellevue, Kirkland, Sammamish, Redmond, ....)
If you want DADU, you will need to focus on (Seattle, Tacoma, Kirkland)
If you want Airbnb income, you will need to focus on cities like (Baring, Gold Bar, Skykomish,.....)
and do on, and so forth.....
So you will need to define your goals first before picking the zip code
- Real Estate Broker
- Tacoma, WA: 🏢 27 LTRs 🏡 3 STRs
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@Christina Greaves already some very great input from the group here. I'll comment to each of your points below:
1) Personally, I focus on the boring, conservative stuff...long term, buy and hold multifamily in landlord-friendly states. All of my LTRs are in the greater Boise area but I watch CO, OK, KS and others. I own a 3-unit STR/MTR in North Tacoma but I don't plan to grow that part of my portfolio. Maybe one STR condo on Oahu where my brother lives and has a real estate office. I believe it is ok to diversify but the more you focus, the more successful you'll be. Thankfully we all don't focus on the same segment of investing! :)
2) I don't focus on zip codes. I watch for properties in specific metro areas, then once I identify a property I'll do a deep dive into the neighborhood (even that particular block) to verify crime, development, etc.
3) AVOID SEATTLE and possibly now Federal Way and Burien for LTRs. They are continuously adding regulations on top of the existing state landlord-tenant laws. Be sure to watch other cities' discussions about their local ordinances being proposed by such groups as Tacoma 4 All. That being said, I know investors still bullish on Seattle, Tacoma, etc. It's all about mitigating your risk. RHA is great for keeping its members updated on long-term rental ordinances but if you intend to invest in STRs you'll need to specifically watch local city council announcements about potential regulations.
4) Resources: A knowledgeable, experienced agent. Local investor/landlord groups such as RHA, REIA, Facebook groups. Websites: Spotcrime, Rentometer, Airdna...are a few examples. Also look at the ipropertymanagement site and click the "research" button at the top right. I don't overthink the analysis. If the numbers work and I like the area/property enough that I would live there myself, then it's usually good enough for me.
Best wishes on your investing journey!
- Brandon Vukelich
Your second question:
3) which areas do you absolutely avoid and why?
Any 981-- zip code
Helping people with Student housing in Seattle - 98105. I like them because of their zoning and ability to maximize rent within a smaller amount of space. I usually avoid the "crazier" parts of Seattle like Capitol Hill, Belltown, Queen Anne, etc. because of obvious resources.
I recommend using Niche.com to understand specific neighborhoods as well as Redfin market data for appreciation. But, nothing beats a realtor who has been living there for the majority of their life! Barbara Cocoran used to literally cold call people in the neighborhood and get them in the deal because neighborhood information was so relevant to her. Check out her podcast with Bigger Pockets to learn more
Get after it,
Ran
