New STR Investor - Seattle Tips?

Question

I recently moved to the greater Seattle area and I am looking into purchasing my first vacation rental. I own an LTR on the east coast but do not have any experience with STR's. I am looking for a condo/townhome with 1-2 bedrooms. Do any vacation-rental owners in Seattle have any tips on their experience with starting the process? Would it be beneficial for me to create an LLC? Any and all input is appreciated!

Michael Haas · Answer

@Kera Takacs as Adrian has mentioned, what Seattle lacks in Landlord Friendliness it makes up for in development opportunities - the best STR's tend to take advantage of the favorable ADU & DADU codes to get multiple rentable structures on a single lot.

When you hear investors S**t on Seattle, be sure to ask why. Some of them have legitimately owned rentals in the city and sold them because of difficulties they've personally experienced - others have never owned property here and just read the news headlines. The news isn't made to tell the truth, its made to catch your attention, and horror stories catch a heck of a lot more attention than "business as usual" stories. That said, I know landlords here in Seattle that have had tough situations thrust on them because of the city code, and I am by no means characterizing Seattle as "Landlord Friendly", I'm just saying that a couple of restrictive laws and a difficult city council aren't enough of a reason for me to NEVER invest in one of the fastest growing cities in the United States.

PS: I own 6 short term rentals, 2 of which (the maximum allowable by current city codes) are in Seattle. I love my Seattle STR's and have had no difficulties with them, nor have I had any personal difficulties with my rentals in the 6 years I've been landlording in Seattle (Knock on Wood!). I think its important that those of use that are enjoying smooth sailing speak up as well, otherwise all we'll hear about are the horror stories - much like how all yelp reviews are either 5 or 1 star. There's lots of quiet people in the middle!

Tyler Solomon · Answer

Seattle is notoriously hard on owners/hosts, and the last thing you want is a potential bad apple playing the "eviction game" with you, tying up your property for an extended amount of time thout cash flow. I would look outside the city if you can - the STR's near the larger parks typically do well in that region, just do not overpay for an asset.

Adrian Chu · Answer

Despite what you may hear otherwise, Seattle has a LOT of strong rental demand from both short term and long term renters.  It also has super friendly land use codes for small builders/developers.  The best areas for STRs in Seattle are Central District, Capitol Hill, Judkins Park and Queen Anne, basically in areas close to the downtown core.  Best of luck and happy to chat more.

Account Closed · Answer

Seattle is hell. King co is the road to hell. Avoid hell. Repent. (means take action, change your direction)Yes, I've owned multiple houses in King Co (Kent, Tukwila, Burien, Riverton, SeaTac) and in Seattle specifically (Magnolia, Fauntleroy, White Center, Madison Park and have I personal knowledge. Sold all of my properties and left Seattle for better investing opportunities and a lot less hassle.

Matthew McKee · Answer

I'm just going to mimic what these guys are saying. There are much better markets to get into, especially for STRs. and if you buy >50 miles away you can utilize a 10% down second home mortgage.

Patty Tower · Answer

For the most part I'm leaning away from Seattle because they do not favor landlords, but if you're ever in need of someone to cohost with further from the city let me know!

Henry T. · Answer

Yup. Huge demand for LTR rentals, because all the landlords quit, or moved to STR. STR's do appear plentiful. Construction is currently going gangbusters. I often wonder if these huge apt complex's know what they're getting into. Then again, if you have 5 bum tenants out of 400 maybe its acceptable. But Seattle tenants are emboldened. I won't give up control the way Seattle demands. I'm not gonna participate in LTR, the risk is too high. I'm closing down slowly through attrition. Not saying you can't be successful, but there's so many other places where the opportunity appears better, and the risk lower. Ha ha,  I sure don't wanna be here if China sends one over, we are target #1.

Henry T. · Answer

1ST in line, is Seattle only. Adjoining cities have pretty much follwed suit in all other terms. Olympia is continuing to pile on more. They are trying to pass a laws keep a database of all rentals, income, status (vacant/occupied), and mortgage info. It got denied last session. More paper work, and they want you to be able to justify a rent increase if its over 3 percent..

New STR Investor - Seattle Tips?

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