Have you had your mind set on investing in the Washington real estate market, but just don’t know where to start your search? Mashvisor’s real estate data will definitely help you in finding the best places to invest in Washington real estate.
What Makes Washington One of the Best Investment Locations?
When it comes to investing in real estate and choosing the right investment location, there are a couple of key factors which need to be considered. Let’s break them down into two main categories: the general market conditions and investment property returns.
Market Conditions
Upon initial analysis of a real estate market, investors need to look at a couple of things. Let’s list them and see how the Washington real estate market performs based on these factors.
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Property Price
According to Mashvisor’s data, the median property price of Washington real estate is currently $415,941 and the price per square foot is $253. It’s important to not only look at the listed property price but to also compare this to selling price and real estate values. According to Zillow, the median property value is $387,100 and the median price of Washington real estate that sold is $370,300.
The median home value in the Washington State real estate market has been steadily going up since 2011 when it was $225,000. So clearly, buying a house in Washington for investment will be a good addition to your investment portfolio as it has been appreciating well, and is expected to go up another 2.4 percent within the next year. But why are actual property prices higher than the market value? It has to do with inventory levels.
Related: Report: Property Prices Are Still Rising in These 10 US Cities
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Role of Inventory Levels
It’s always recommended to check out the inventory levels of housing on the market as this will help you determine whether you’re dealing with a buyer or seller’s market. On-market supply of Washington real estate has been steady for a while, but it seems to be that demand is starting to catch up with supply as the Washington housing market is warming up to a seller’s market.
Washington real estate prices have generally always been pretty expensive when compared to the rest of the nation, but a tighter supply of housing could explain the higher property prices. It seems as demand increases, prices will only get hotter. Don’t worry though, we will include some markets where you can find cheap houses for sale in Washington below.
Related: Searching for Property in a Low-Inventory Real Estate Market: 6 Tips
Investment Property Returns
Let’s focus a little bit more on the actual performance of long term rentals in the Washington real estate market now. When it comes to analyzing the profitability of a traditional rental investment in any market, there are key return on investment metrics that you should always look up. Here are a few:
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Rental Income
The amount of monthly rental income expected to be generated by your rental property should be the first thing you check out. This number differs from city to city but the average traditional rental income for Washington rental properties statewide is $1,605 monthly.
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Cash on Cash Return
Next, you need to consider the rate of return. The return could be measured using a number of different metrics. Using the cash on cash return for traditional rentals in the Washington real estate market, investors can expect a return rate of 1.43 percent on average.
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Occupancy Rate
This measures the percentage of all units in your rental property that remains occupied for a certain period of time. It is the opposite of vacancy rate which measures how often your rental units are vacant. This is a key metric all rental property investors need to consider as it projects an estimate of how high demand is for rental units in a certain market. When searching for Washington real estate using Mashvisor’s search tools, you will be given an accurate estimation of occupancy for any prospective investment properties under both Airbnb and traditional strategies.
Related: Apartment Occupancy Rates Reach 20-Year High
The Best Cities for Investing in Washington Real Estate
Using data generated by Mashvisor’s Airbnb calculator, we will now list the best places for high returns with Washington real estate. There is no specific order for these cities, so just check out the data and see which numbers work best for your personal goals and strategy.
Covington- King County
- Median Property Price: $424,397
- Price per Square Foot: $233
- Price to Rent Ratio: 11
- Average Days on Market: 61
- Monthly Traditional Rental Income: $3,268
- Traditional Cash on Cash Return: 5%
Cle Elum- Kittitas County
- Median Property Price: $194,879
- Price per Square Foot: $162
- Price to Rent Ratio: 12
- Average Days on Market: 16
- Monthly Traditional Rental Income: $1,300
- Traditional Cash on Cash Return: 9%
Index- Snohomish County
- Median Property Price: $82,000
- Price per Square Foot: $90
- Price to Rent Ratio: 3
- Monthly Traditional Rental Income: $2,030
- Traditional Cash on Cash Return: 17%
Skykomish- King County
- Median Property Price: $195,000
- Price per Square Foot: $210
- Price to Rent Ratio: 6
- Average Days on Market: 44
- Monthly Traditional Rental Income: $2,760
- Traditional Cash on Cash Return: 9%
Zilla- Yakima County
- Median Property Price: $90,000
- Price per Square Foot: $75
- Price to Rent Ratio: 6
- Average Days on Market: 84
- Monthly Traditional Rental Income: $1,350
- Traditional Cash on Cash Return: 8%
Federal Way- King County
- Median Property Price: $354,341
- Price per Square Foot: $215
- Price to Rent Ratio: 12
- Average Days on Market: 47
- Monthly Traditional Rental Income: $2,437
- Traditional Cash on Cash Return: 4%
Gold Bar- Snohomish
- Median Property Price:$277,690
- Price per Square Foot: $214
- Price to Rent Ratio: 9
- Average Days on Market: 13
- Monthly Traditional Rental Income: $2,670
- Traditional Cash on Cash Return: 7%
Morton- Lewis County
- Median Property Price: $106,157
- Price per Square Foot: $65
- Price to Rent Ratio: 8
- Average Days on Market: 20
- Monthly Traditional Rental Income: $1,095
- Traditional Cash on Cash Return: 8%
Sprague- Lincoln County
- Median Property Price: $308,034
- Price per Square Foot: $150
- Price to Rent Ratio: 21
- Average Days on Market: 33
- Monthly Traditional Rental Income: $1,227
- Traditional Cash on Cash Return: 5%
You should move on these cities in the Washington real estate market fast to get the best deals out there. Do you have a free Mashvisor account? Use our Property Finder to find lucrative Washington real estate investment properties that match your criteria in a matter of minutes!
Related: Washington State Real Estate Market 2019: Invest in These Cities