Seattle After Costs: short-term rental Net Drops to 1.2% on a House

The gross short-term rental premium is 87% for a 3-bed house in Seattle (King County), but after Airbnb fees, insurance, maintenance, utilities, and property tax, that headline shrinks fast. This article covers both a 3-bed house and a 2-bed apartment because the cost structures differ materially: apartments add HOA fees but come in at a much lower entry price, and the net yield ranking is not always what the gross numbers suggest.

Seattle is fundamentally a premium, appreciation-led market. Median 3-bed house prices around $986,000 sit well above the national median of $242,500, and gross long-term rental yields of 2.8% fall short of the national median of 5.3%. Investors here are betting on capital growth and location quality more than monthly cash flow, and the after-costs tables below make that trade-off concrete.

3-Bed House: Net Yield Lands at 1.2% on Short-Term, 0.5% on Long-Term

Below is the self-managed cost stack for a typical Seattle 3-bed house. The short-term column assumes the market-average occupancy of 52% across 330 available nights per year. Both columns assume the owner self-manages.

Note that Airbnb's host-only fee of 15.5% is platform-specific. Vrbo charges roughly 5% to hosts on a per-booking basis, and Booking.com typically takes around 15% in commission. Direct bookings avoid platform fees entirely, but require the host to handle marketing, payments, and customer service.

What Eats the Short-Term Premium on the House

Airbnb fees and short-term rental tax do most of the damage on the cost side. Airbnb takes $7,901 a year off the top, and Washington's combined state and local lodging tax of 6.5% adds $3,313 more. Together, those two cost lines alone wipe out a meaningful chunk of the gross premium that short-term commands over long-term.

Insurance and maintenance also run materially higher on short-term: insurance moves from $2,958 to $4,458 because short-term carriers price in commercial-grade liability, and the maintenance figure of $13,052 folds in furnishing replacement on top of routine repairs. Utilities sit on the host's side for short-term but pass through to the tenant on long-term, adding another $2,676 a year to the short-term cost stack. Property tax of $8,094 hits both columns equally.

2-Bed Apartment: Lower Entry Price, but HOA Changes the Math

The apartment version of the same exercise looks like this. The HOA row appears in both columns because it is a property-level cost that applies whether the unit is rented short-term or long-term.

Houses Win on Total Cash, Apartments Win on Yield Percentage

The apartment entry price of $371,454 is dramatically lower than the house at $986,000, which means a much smaller down payment and a much smaller absolute capital commitment. But the apartment carries an HOA bill of $3,966 a year that houses do not pay, and HOA is the single biggest swing factor between the two cost stacks. In some Seattle buildings, HOA can include water, garbage, and exterior maintenance, which partially offsets the line item; in others it is mostly building reserves and amenities.

The net yield comparison is the headline most investors care about: short-term apartment net yield comes in at 2.3% versus the house at 1.2%, and on long-term the apartment runs at 3.2% versus the house at 0.5%. Whichever way the comparison falls, the dollar income on a house is larger because the asset is larger; the yield percentage on the apartment can be more efficient because the entry price is lower. Investors trying to maximize total wealth lean toward houses; investors trying to maximize return on capital deployed often prefer apartments.

Short-Term Breaks Even at 28% Occupancy on the House

For the 3-bed house, short-term gross revenue equals the long-term annual rent at roughly 28% occupancy. That is the floor, not the target: it is the occupancy below which short-term loses outright to long-term. The Seattle market median occupancy is 52%, comfortably above the floor, but new listings and off-prime locations frequently run below market median for the first 12 to 18 months while reviews accumulate. Investors modelling a new Seattle short-term should stress-test the cash flow at the lower-occupancy scenario of 37%, where gross revenue falls to $36,410.

View Seattle in the dashboard → Free preview · every bedroom count and property type

These are county medians across 83 ZIP codes. Individual neighborhoods diverge significantly: the highest-yielding ZIP, Seatac (98168), posts a gross long-term yield of 5.0% on a $587,500 entry, while expensive Bellevue ZIPs can yield less than half that. The dashboard shows the suburb-level breakdown for every bedroom count and property type.

Hiring a Manager Nearly Wipes Out Net Yield on Short-Term

The tables above assume the owner self-manages. Most Seattle investors don't, especially on short-term where guest communication, cleaning coordination, and dynamic pricing run as a near-full-time job. Hiring a short-term professional manager adds roughly $10,195 per year for a 3-bed house (typically around 20% of gross revenue), which drops short-term net yield from 1.2% down to 0.1%.

On the long-term side, a property management company typically charges around 8% of collected rent, adding roughly $2,175 per year and dropping long-term net yield from 0.5% to 0.3%. Long-term management fees are a smaller dollar drag than short-term simply because the gross revenue base is smaller, but the percentage hit to net yield can be substantial when the starting yield is already thin. Explore rental data in the dashboard to see how management fees affect your specific neighborhood.

Tax Treatment: No State Income Tax, Plus 27.5-Year Depreciation

Washington has no state income tax, so federal treatment dominates the after-tax picture. Rental real estate is reported on Schedule E. Depreciation on the building portion of a residential rental is taken over 27.5 years on a straight-line basis: for the median Seattle 3-bed house, that is roughly $28,684 per year on a depreciable base of around $788,800 (using a 80% building allocation for this market). Land is not depreciable.

Short-term rentals are also subject to Washington's combined lodging tax of 6.5%, which is collected from the guest and remitted to the state and local jurisdictions. Seattle requires a short-term rental operator license, and hosts can rent up to two units (one of which must be a primary residence). See our data sources page for how taxes and regulations are wired into the cost model. After-tax yields depend on mortgage interest, depreciation, and operating expenses being layered in; the dashboard shows these for your specific neighborhood. Always confirm closing costs and transfer taxes with a local real estate attorney or escrow agent before transacting.

Data reflects market conditions as of April 2026.

This information is for educational purposes only and should not be considered financial or legal advice. Regulations and market conditions change frequently. Verify current rules with local authorities before making investment decisions.