Seattle, WA — Rental Investment Analysis
🔴WEAK— appreciation play onlyData: HUD FMR FY2024 + Zillow ZHVI April 2026 + Freddie Mac rates. Last updated June 2026.
Investment Summary
As of 2026, Seattle, WA has a 2.6% cap rate, indicating limited cash flow potential at current prices of $788,537 median.
Seattle is primarily an appreciation play with limited cash flow potential. At $788,537 median home price, Seattle requires significant capital. A 20% down payment alone is $157,707. With 3-bedroom rents around $3,670/month, the 2.6% cap rate tells the story. Cash flow is deeply negative at -$2,466/month with standard assumptions. This market requires appreciation to justify the investment.
At 0.44% on the 1% rule, rents are low relative to purchase prices. You'd need a significant discount from asking price to make the numbers work. DSCR of 0.41 is below 1.0, meaning rental income doesn't cover the mortgage. DSCR lenders will likely decline this market at current prices.
Bottom line: At current valuations, Seattle doesn't make sense for rental investors focused on returns. Look at lower-cost markets unless you have specific local knowledge.
Data sources: HUD Fair Market Rents (FY2024), Zillow Home Value Index (April 2026), Freddie Mac Primary Mortgage Market Survey.
Cap Rate
2.6%
Below average
Monthly Cash Flow
-$2,466
After all expenses
Price-to-Rent
19.1
Overpriced for rent
DSCR
0.41
Fails
Key Metrics
- Median Home Price
- $788,537
- Average Rent (3BR)
- $3,670/mo
- Price-to-Rent Ratio
- 19.1(high)
- 1% Rule
- 0.44%(fails — need 1%+)
- Cash-on-Cash Return
- -16.5%
- Vacancy Rate
- 8.0%
Market Strength
- Unemployment Rate
- 5.2%(+0.9% vs national)
- Rent Growth (YoY)
- +2.9%(national avg)
- Population Growth
- +2% YoY
Property Tax Rate
0.87%
of assessed value (WA avg)
Median Income
$82,228
household (WA avg)
Rent-to-Income
53.6%
Stretched
Section 8 Max Rent
$3,670/mo
3BR voucher payment
WA Investor Climate
Landlord Friendly
5/10
State Income Tax
None
Property Tax
0.87% effective
Population Trend
+2% (3yr)
Population Movement (Tax Year 2021→2022)
Net Migration
-6,706 households
SHRINKING
Total Inflow
973,483
households moved in
Avg Income (New Residents)
$192,152
per household
Where they're coming from:
Where residents are leaving to:
Net outflow may indicate weakening demand — but can mean lower prices and higher cap rates.
Best Zip Codes in Seattle for Investors
All Zip Codes in Seattle
| Zip | Cap Rate | Cash Flow | Home Price | Rent (3BR) | DSCR |
|---|---|---|---|---|---|
| 98121 | 7.2% | +$401 | $581,750 | $5,270/mo | 1.13 |
| 98134 | 7.1% | +$269 | $438,320 | $3,930/mo | 1.12 |
| 98101 | 6.2% | -$103 | $594,404 | $4,760/mo | 0.97 |
| 98241 | 5.0% | -$520 | $438,483 | $2,970/mo | 0.78 |
| 98109 | 4.3% | -$1,300 | $764,730 | $4,700/mo | 0.68 |
| 98104 | 3.8% | -$1,205 | $553,576 | $3,080/mo | 0.59 |
| 98102 | 3.4% | -$1,862 | $745,904 | $3,860/mo | 0.53 |
| 98122 | 3.1% | -$2,260 | $837,946 | $4,130/mo | 0.49 |
| 98092 | 2.9% | -$1,999 | $682,285 | $3,170/mo | 0.45 |
| 98107 | 2.8% | -$2,606 | $871,048 | $3,980/mo | 0.44 |
| 98106 | 2.8% | -$2,033 | $676,373 | $3,080/mo | 0.44 |
| 98118 | 2.8% | -$2,260 | $751,509 | $3,420/mo | 0.43 |
| 98103 | 2.6% | -$2,956 | $937,500 | $4,100/mo | 0.41 |
| 98282 | 2.6% | -$2,327 | $735,849 | $3,210/mo | 0.41 |
| 98108 | 2.5% | -$2,311 | $704,356 | $2,970/mo | 0.38 |
| 98125 | 2.4% | -$2,783 | $837,626 | $3,490/mo | 0.38 |
| 98144 | 2.3% | -$2,726 | $801,110 | $3,260/mo | 0.36 |
| 98126 | 2.3% | -$2,663 | $775,965 | $3,130/mo | 0.36 |
| 98136 | 2.0% | -$3,491 | $957,351 | $3,610/mo | 0.31 |
| 98117 | 2.0% | -$3,717 | $1,011,448 | $3,780/mo | 0.31 |
| 98116 | 1.8% | -$3,870 | $1,019,583 | $3,660/mo | 0.29 |
| 98115 | 1.8% | -$4,096 | $1,073,855 | $3,830/mo | 0.28 |
| 98119 | 1.8% | -$4,005 | $1,042,038 | $3,680/mo | 0.28 |
| 98199 | 1.3% | -$5,378 | $1,278,660 | $3,950/mo | 0.21 |
| 98105 | 1.3% | -$5,082 | $1,198,172 | $3,650/mo | 0.20 |
| 98112 | 0.9% | -$6,334 | $1,393,687 | $3,730/mo | 0.15 |