5 Best Places to Buy Rental Property in Washington

By Daniel Bortz

Posted on May 13th, 2022

Aerial view of Seattle

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Seattle | Spokane | Tacoma | Vancouver | Bellevue

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Washington offers endless outdoor activities, no state income tax, low cost of living, and lots of job opportunities, making it one of the best states to invest in real estate.

Washington’s major cities saw average rent increases of at least 15% in 2021, according to Apartment List. And with an increase in housing construction in the fourth quarter of 2021, investors will have more options to choose from this year.

Need a little help honing your search? We evaluated investment opportunities in Washington's five most populous cities, assessing each city’s affordability, home prices, rental rates, and amenities.

These five cities are the best places to buy rental property in Washington.

If one of the cities on our list catches your eye, you can get advice from an experienced local real estate agent and up to 0.5% cash back at closing by working with our friends at Clever Real Estate. In Washington, where the median price for a single-family home is $606,643, that's up to $3,000 back in your pocket.

Clever is a free, no-obligation agent matching service that will introduce you to qualified, pre-vetted realtors from trusted brokerages including Keller Williams, RE/MAX, and Coldwell Banker. You can meet as many agents as you like until you find the best one to advise you on your real estate investment journey.

👋 Contact Clever's licensed concierge team to meet top-rated real estate agents in Washington today!

1. The Best Place to Buy Rental Property in Washington: Seattle

Seattle real estate isn’t cheap — the median value of an existing home rose from $649,000 in March 2017 to $958,000 in March 2022, reaching almost double the current national median home value, Zillow data shows. What’s more, Seattle home prices are projected to grow 7.5% this year, nearly two percentage points higher than the expected national home price growth, Realtor.com forecasts.

In a city like Seattle where single-family homes are so expensive, investors fare better with apartment investments – allowing you to cash in on some of the highest rent prices in the nation. Do a quick search on Loop.net and you’ll find four- and six-unit buildings for around $1.2 million. With the average rent for a two-bedroom apartment clocking in at $3,745, you’d be earning twice your mortgage payment, allowing you to pocket half of the rent dues.

Additionally, short-term rentals in Seattle have a high 78% occupancy rate, AirDNA reports.

Young adults are flocking to Seattle, allured by its tech-hub status, city-wide sustainability initiatives, and lively arts scene. In fact, the Emerald City was recently crowned the most desired destination for college graduates in the country by Axios.

Job opportunities abound in the state’s most populous city, particularly in the technology sector. Microsoft, Amazon, Boeing, and Expedia are major employers here. And many Seattle workers have returned to the office: in late September, the city’s downtown district recovered 84% of commuters compared to 2019 levels. Plus, Seattle has a low unemployment rate of 2.6% – a full percentage point below the national unemployment rate.

Tourists in Seattle seek short-term rentals year round to visit the city’s museums – the Museum of Flight, the Museum of Pop Culture, and the Chihuly Garden and Glass, to name a few – as well as the famous Pike Place Market and professional sporting events, from hockey to football.

2. Spokane

Looking for a more affordably priced investment property? Consider Spokane. This eastern Washington city’s median existing home value was about $411,000 in March (up from $193,000 five years ago) – much closer to the national median home value of $337,560, according to Zillow data. The average 2-bedroom rental in Spokane costs $1,721 a month. Its short-term rental occupancy rate is a healthy 73%, according to AirDNA.

Spokane Falls, the largest urban waterfall in the United States, is an Instagram-worthy attraction located in the heart of Spokane’s business district. It’s a stone’s throw from Riverfront Park, which has a skate park, an Ice Age-themed playground, a carousel, and a pavilion where locals gather in the summer for concerts and outdoor movies.

Agriculture jobs represent a large portion of Spokane’s economy, with Spokane County boasting more than 2,500 farms and food processing generating $566 million in annual revenue, according to Advantage Spokane.

The city’s agricultural roots have grown a diverse restaurant and bar scene. Beer drinkers can grab a pint at The Brown Derby, one of the oldest bars in the state. Have a sweet tooth? Mary Lou's Milk Bottle is a neighborhood staple that serves more than 25 milkshakes, including huckleberry, butterscotch, and mocha flavored shakes.

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3. Tacoma

With a median home value of roughly $499,000 — up from $257,000 five years ago — Tacoma is one of the best markets for real estate investment in Washington. The city’s average two-bedroom apartment costs $2,213 per month, Apartment List reports, and its short-term rental occupancy rate is a rock-solid 77%, according to AirDNA.

Tacoma has no shortage of military jobs: an estimated 54,000 employees work at the local Joint Base Lewis–McChord. In addition, Tacoma’s MultiCare Health System employs more than 8,000 workers in the city limits.

Families will enjoy spending the day at Point Defiance Zoo & Aquarium, which offers polar bear presentations, goat feeding, and a water zone where visitors can touch sea stars, crabs, and sea urchins. Plus, it’s easy to take a ferry to one of Washington’s many islands, and Seattle is just an hour away.

But there’s still plenty of action in Spokane. Music fans catch concerts at the Tacoma Dome, which holds up to 21,000 patrons, making it the largest indoor venue in the state. Elton John, My Chemical Romance, and Pink Floyd's Roger Waters are on this year’s fall lineup.

4. Vancouver

Vancouver home values have jumped 21.6% over the past year, according to Zillow data, making it one of Washington’s up and coming cities for real estate investment. The median home value sits at around $505,600, up from $303,000 five years ago. That’s significantly higher than the national median home value of $337,560 but still well below what homes cost in Seattle.

The rental market here is strong, with a 77% short-term rental occupancy rate, and an average two-bedroom rental rate of $1,871.

The biggest employer in town is PeaceHealth, a health care system that employs approximately 16,000 caregivers. Moreover, many Vancouver residents commute just 9 miles to Portland, Oregon, making the scenic drive over the Columbia River.

Vancouver is located along the north bank of the Columbia, where the Pacific Northwest’s first indigenous inhabitants lived. The city is home to some of the best vineyards in Southwest Washington's wine country, 1,600 acres of park land, and the Waterfront Renaissance Trail, a five-mile paved path that's ideal for biking, rollerblading, and jogging.

5. Bellevue

Bellevue isn’t just any Seattle suburb — this vibrant enclave of approximately 145,300 people has its own spirit. The city’s beating heart is its downtown district, which has museums, outdoor parks, more than 200 dining options, and an average Walk Score of 94.

Bellevue is also a great place to buy a rental property — if you have the money to afford a home here. Zillow pins Bellevue’s median existing home value at a whopping $1.51 million, up from $856,000 five years ago. But at the same time, Bellevue has some of the highest-paying jobs in the nation, with an average household income of about $129,500, Census data shows.

Like Seattle, Bellevue is a hub for tech jobs. The city is home to T-Mobile’s North America headquarters. Also, Amazon is expanding its Bellevue workforce, with plans to add 25,000 by 2025.

Bellevue’s average 2-bedroom rental rate is a high $3,400 per month, Apartment List found. That said, the city’s short-term rental prices are high, at an average $200 a night, making it one of the best cities for Airbnb investment.

Next Steps for Your Rental Property Investment

From the big city of Seattle to up and coming cities like Vancouver, Washington is a promising place to start or continue your real estate ventures.

Ready to get started? Finding a local agent is the first step. Real estate agents are powerful allies who can help you spot promising rental property opportunities, navigate up-and-coming markets, and even connect you with properties before they hit the MLS.

Our friends at Clever Real Estate have built a network of trusted partner agents in Washington and beyond. It's free to meet agents through Clever, with zero obligation!

Best of all, real estate investors who find an agent through Clever can easily take advantage of Washington’s buyer rebate opportunities. You can receive up to 0.5% cash back at closing to offset closing costs, get your new property ready for renters, or simply enjoy as extra money in your pocket.

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FAQs

Where is the best place to buy rental property in Washington?

Seattle’s sustained growth and sky high rent prices make it the best place to buy rental property in Washington – particularly multifamily apartment buildings. Learn how plentiful job opportunities, fast-rising home values, and short-term rental properties impact real estate investments.

What is the Washington housing market like?

In Washington, the median price for a single-family home is $606,643. Home values have been steadily increasing over the last five years. It’s a hot market, with most homes selling within six days after listing, so buyers should be prepared with competitive offers. Learn how to spot good investment opportunities — and save time, energy, and money — before buying a rental property in Washington.

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Posted in Investment Property, Real Estate Investing