Buy and hold rental investments around Seattle?

Question

Hi all,

I've been looking at alternatives to Seattle as a purchase initially for myself but likely as a rental a few years down the road. I've heard Tacoma is a hot pick but I was also checking out Lynnwood and Everett.

Curious if anyone had thoughts on those two areas. My goal is a 3 or 4 bed home under $600k as either a new construction or a light to medium rehab. I'm thinking over the next few years people will start to expand into the surrounding areas of Seattle more than usual due to an increase in WFH, particularly in tech.

Just curious if anyone had already explored some of these options. Thanks.

Michael Haas · Answer

@Dashiel C Neimark I think it will definitely be built, but I'm sure many West-Seattlites won't be happy with the end result haha. With the West Seattle bridge down-for-the-count and unlikely to be rebuilt in the next 3 years, the commute to many parts of West Seattle is going to be tough in the short term. Still a wonderful place to live and own property though, so I wouldn't count it out.

The areas north & south on the I-5 Corridor are always a safe bet based on pure convenience and friendly commute times.

Michael Haas · Answer

@Dashiel C Neimark Google ST2 (the existing expansion into North Seattle and the Eastside, and some parts of Tacoma, trains rolling in 2-3 years) and ST3 (the longer-term expansion into West Seattle, Ballard, and some parts of Tacoma, Trains rolling in 4-12 years).

The route is set for the most part, with some notable exceptions. West Seattle is ALL OVER THE PLACE with a bunch of competing proposals, most of which cost more money than we have. Current plans call for an elevated light rail line and they want a tunnel, because North Seattle got a tunnel. Ballard is also a little up-in-the air for similar reasons ("can we have a tunnel too?"). And no one even asked poor South Seattle if they wanted a tunnel when lightrail started running there in 2008 haha, we just got stuck with surface rail on MLK. Another good reason to live in North Beacon Hill, with the only underground station on the south end :).

Michael Haas · Answer

Lots of good duplexes in both Tacoma & Everett at that price point, especially if you're ok with a light-to-medium rehab as you mentioned. In those cities there are a lot of older (1900-1950) multifamily housing stock with good bones.

I second @Brandon Vukelich's advice to follow the lightrail - traffic on i-5 is only geting worse, and Seattle's long term vision is to eliminate most buses and cars from downtown and have most of the other transit options simply shuttle folks to and from the lightrail stops.

We buy within .5 miles of lightrail, sometimes up to .75 miles away if the deal is right. Some lightrail stations have parking, but the majority of them do not so picking something up that is walkable/bikeable distance is key.

Best of luck @Dashiel C Neimark - hit me up anytime if you have questions about investing here!

Dashiel C Neimark · Answer

Thanks everyone, this is super helpful.

It sounds like West Seattle may not even get the expansion? Competing proposals / insufficient budget? Maybe a safer bet is both south and north of Seattle (Tacoma / Lynnwood / Everett). I'll have to keep exploring. Good info!

Brandon Vukelich · Answer

*This is just a personal opinion (obviously). :)  Yes, stay out of the city limits of Seattle.  The expanding growth has already begun outside of Seattle into other parts of King County as well as Pierce, Snohomish and even Kitsap.  Follow the light rail plan.  Everett is hot but Tacoma is hotter.  If your budget is $600k, why go SFR?  Especially if it is just you.  You could pick up a decent duplex...maybe triplex, for that amount and have your monthly housing expense much lower.  Also depends on where you plan to work locally or staying in Chicago.  Best wishes on your investment journey!

Trevor Ramos · Answer

@Dashiel C Neimark

Your logic is solid. I work in the IT consulting/staffing industry so I can see IT projects across various industries so I can attest that yes, wfh is becoming the new norm for companies in Seattle and there’s trends to show it will be around for the long haul post-COVID.

I second what the others have mentioned. The light rail expansion is supposed to be done in the next 4 years and will make better commutes for people who live in the South King County region.

If you are looking to focus on SFH in general that are less than 20 years old, good luck finding that. Let alone one that is a cash flowing deal. In my recent searches I’ve found tons of 3-4 br properties that are along that I-5 corridor/Light Rail expansion plan that were built in the 50s-70s for less than 500k that need some light rehabbing/updating.

Brandon Vukelich · Answer

Look up sound transit light rail map.

Dashiel C Neimark · Answer

Thanks, Michael. Super helpful. Is there a definite map of where the lightrail will be? Or is it still pending? Or do you mean the existing lightrail? I know there's talk of expanding it / introducing more rail systems

Dashiel C Neimark · Answer

Thanks, Brandon. I hadn't seen too many duplexes on the market but I'll look more into that. I'm looking to move there and work there.

Buy and hold rental investments around Seattle?

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