Is It Worth Owning a Rental Property in Seattle in 2023?

According to a recent Redfin analysis, a typical home in Seattle was 88% more expensive to buy than rent. So even though Seattle prices have started to cool, homeownership remains out of reach for many Seattleites. This will continue to fuel the need for long-term rentals, keeping vacancy rates low and demand high. 

If you own a home in Seattle or have received an inheritance, long-term renting could prove more lucrative than selling in 2023. Sale prices are coming back down to earth after recent records, but single family homes in Seattle consistently attract good rents and opportunities for consistent returns and appreciation. 

As for would-be investors, a drop in housing prices also isn’t going to put Seattle in the “affordable” category any time soon! But a lack of bargains doesn’t mean that there aren’t opportunities to be had for those who do their homework. Check out this video from investment experts, BiggerPockets, for a deeper dive on investing in the Seattle real estate market. 

Regardless of where you are in your rental home journey, this guide to the Seattle rental market will cover some of the ins and outs of setting the right price and maximizing your return on investment in the Emerald City. 

The topics we’ll cover in this article include:

• How much rent should I charge for a home in Seattle?
• Does Seattle have rent control?
• What is the rental vacancy rate in Seattle in 2023? 
• How can I get the best ROI for my rental home in Seattle?

How much rent should I charge for a home in Seattle?

There’s no hard and fast rule for working out what to charge for rent in Seattle. Even the old ‘1% rule’ (charging 1% of the home value for monthly rent) went out the window years ago when house prices skyrocketed. For example, it used to be said that a home valued at $310,000 could charge $3,100 per month.

The median listing price for homes in Seattle in June 2023 is $850,000. But charging $8,500 per month for a modest single family home would likely result in a rental income of zero while the home sat empty. At Belong we’ve seen average rental rates sit between $2,476-$3,305 per month for the Seattle market over 2022/early 2023. 

But determining a rental value should be unique to every home based on the amenities, neighborhood, and demand. When helping owners price their homes for the Seattle rental market, Belong uses technology to blend live market data with an all-important metric: real-time demand for your home. We can determine the right price for your home that will maximize rental income, while attracting the best people to care for your home in the long term. 

Median rents in Seattle by bedroom:

According to Belong partner, Zumper, median rents are up 3% YoY in June 2023, trending up from last month. The big winners are homeowners with larger 3-bedroom spaces that saw a 17% jump in rental pricing. The breakdown by housing type is:

• Studio: $1,529 (+11% YoY)
• 1-Bedroom: $2,005 (+3% YoY)
• 2-Bedroom: $2,764 (+7% YoY)
• 3-Bedroom: $3,500 (+17% YoY)
• 4-Bedroom: $3,995 (+3% YoY)

Read More: How to Find the Sweet Spot of Rental Pricing For Your Seattle Home

Does Seattle have rent control?

Not technically. Rent control measures are governed at a state level and are currently prohibited in Washington. That said, there are rules in Seattle that don’t apply to the rest of the state. 

Seattle has recently introduced restrictions that prevent landlords from increasing rent during a lease. You can only increase housing costs when the rental agreement is monthly or up for renewal, which makes getting it right the first time all the more important. There are also more protections in place for evictions, which you can learn about here. 

What is the rental vacancy rate in Seattle in 2023? 

Homeowners looking to fill vacancies for rentals in the regions of Seattle, Tacoma and Bellevue should find new tenants quicker in 2023. According to the latest U.S. Census data for Q1 2023, rental vacancy rates in the Seattle/Tacoma/Bellevue area are sitting at a mere 3.3%, down from 5.7% this time last year.

How can I get the best ROI for my rental home in Seattle?

When you have a home on the Seattle rental market, you need to know how to optimize your investment. You should start with an accurate cash-flow analysis and then look at how you can increase your returns without blowing out your expenses. 

Here are 9 tips on how to best reach your financial goals through the Seattle rental market. 

1. List your home as a long-term rental for stability

While a per-night rate might be attractive, the profits may be negligible once you account for the extra work and fluctuation in vacancies. Long-term renting can offer good returns and more stability than short-term vacation rentals in Seattle. Vacation rentals are also subject to restrictions, taxes and licensing requirements in Seattle that don’t apply to homes with a longer lease agreement. 

Read More: Short-Term Rental vs. Long-Term Rental: The Pros and Cons

2. Avoid falling behind in rental income

Nothing messes up your rental cash flow like not getting paid. Your expenses don’t stop when the rent checks do, so the best way to avoid falling behind is to stay in the green with guaranteed rent. With Belong, rent collection is something you’ll never have to worry about. All homeowners receive their rental payment at the same time every month, regardless of when the residents pay it.

Read More: How Guaranteed Rent is Changing Property Management Forever

3. List your home in summer for Seattle’s peak rental demand

Belong data shows that August-September is the best time to attract top dollar for your property in Seattle, with average rents peaking at $3,305 per month. Zillow data shows a similar trend with median rents peaking at $2,450-$2,461 in the August/September period. 

Besides the gorgeous natural playground of the Puget Sound, Seattle is home to many desirable school districts, so single family rentals attract hot competition and rents in the lead-up to Semester 1 in September.  

Read More: Peak Cash Flow: How To Achieve The Best Rent By Listing In Summer 2023

4. Get great photos and video marketing for your home

First impressions count and will influence the demand for your Seattle rental home. To attract long-term residents, you need to get them to fall in love with your home and imagine themselves spending a year (or many years!) there. Grainy photos of a poorly-lit bathroom aren’t going to do that. It’s why Belong includes video marketing and virtual tours at no extra cost to our homeowners. 

Read More: Virtual Open Homes: 5 Tips For Offering Video Inspections For Rentals

5. Find a partner or property manager who can find great tenants

A common question from landlords is “can a property manager help you to find tenants faster?”. The short answer is yes. Screening credit scores and running background checks on every applicant is a big job and real estate companies have the skills, knowledge and resources needed to find tenants quickly. 

Belong takes that a step further, with fast and diligent resident placement. Belong isn’t a traditional property management company in Seattle. Belong’s platform integrates with all the top real estate sites (like Zillow, HotPads and Zumper) getting our homes featured fast. This can get you 30-50% more views for your rental home as well as a direct feed of applicants from these sites into the Belong system. We can contact potential residents quickly and find the best applicant faster than one person or even a property manager ever could. 

Read More: Find Out Who Outshines The 7 Top-Rated Property Managers in Washington

6. Show your home some love

A home that isn’t in good repair doesn’t exactly scream “love me!”. If you want your residents to treat your home with respect (and pay top-dollar to live there), the home should be kept in great condition. 

Homes need regular upkeep, so Belong has introduced a way to make sure preventive maintenance runs like clockwork. Add, pause or remove recurring services and maintenance subscriptions, right from the Belong app. From lawn mowing to gutter cleaning, set and forget your seasonal home maintenance and let Belong do all the work. This will also keep your expenses predictable, supporting your cash flow. And if unexpected repairs or damage occurs, we’ll let you spread the costs over the term of your lease agreement. 

Read More: The Annual Maintenance Checklist for Rental Homes in Washington State

7. Make your Seattle rental more sustainable

Seattle isn’t just the Emerald City, but also a ‘green one’. Seattle has a reputation for progressive environmental politics with many of its residents caring deeply about climate change action. Yet this can be a challenge to achieve for those who rent, with many solutions targeted at homeowners. By making some simple, cost-effective improvements to the home's energy efficiency, you can lower both the carbon footprint and overheads for your residents. As this continues to become a priority for people, sustainable rentals will soon have the upper-hand on competing homes, potentially increasing the rent value and decreasing vacancy rates.

Read More: 7 Cost-Effective Ways To Make Your Rental Home Sustainable in 2023

8. Protect your investment and personal liability

Investing in the right insurance for your rental home helps to protect your cash flow. If the home suddenly becomes unlivable due to storm damage or a burst pipe, you want to know your finances won’t take a big hit. Landlord insurance policies will also protect you from liability claims if a resident is injured in or around your rental home. 

Read More: What Type of Insurance Should I Get For My Rental Property?

9. Uncover the hidden costs of rental property management

Reducing your ongoing rental management expenses can be a good way to boost your bottom line. Particularly if you have been working with an old-school rental property management company for a while, you could discover you’ve been stung with fees you never budgeted for. Hidden costs like setup costs, lease renewal fees, inflated maintenance costs, advertising and marketing fees, issuing notices — the list goes on.

When analyzing your cash flow, look at what you’re really paying for with your property management services. Then look at how Belong is different to see what you could be saving. 

Read More: What are Property Management Services? How is Belong Different?

The easy way to reach your financial goals with Seattle real estate

Belong is simplifying the rental experience and helping more homeowners reach their financial goals through real estate in Seattle and Washington state. 

Visit our homeowner's page to find out more about how our services are helping people to ditch property management in Seattle, with coverage in and around cities like Bellevue, Bothell, Issaquah, Redmond, Mercer Island, Snoqualmie, Sammamish, Yarrow Point and many more.