If you are reading our blog, it means that you are thinking about starting a real estate investing business or you are already a real estate investor looking for your next rental property. In either case, you should definitely think about Seattle real estate investing as your next option in the US real estate market.
So, you are asking yourself: Why should you go for Seattle real estate investing?
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Well, the first and foremost answer is THE ECONOMY. At the moment, Seattle hosts 8 of the Fortune 500 companies, chosen for their gross revenues: Costco, Microsoft, Amazon, Paccar, Starbucks, Nordstrom, Expeditors International of Washington, and Weyerhaeuser. Seattle’s economy used to be dominated by manufacturing (ships and planes), which is now being replaced by high-tech.
And what is typical for high-tech industries? They pay high salaries. No surprise the family median income in Seattle is $93,000, compared to only $65,000 in the US, according to Sperling’s Best Places. The per capita income is 51% higher than in the rest of the US.
The unemployment rate at 4.0% is below the country average of 6.3%. Recent job growth in Seattle (2.6%) exceeds the US average (1.2%), and what is even more important is that the expected job growth over the next 10 years is 41%, compared to 36% in the US.
All these numbers matter greatly for real estate investors like you because you want: 1) people moving into the city; 2) tenants who are willing to pay higher rents; and 3) tenants who have stable jobs so that they can pay their rent on time.
Then, Seattle real estate investing is a great choice for your next investment as the economy is expected to continue growing. Demand is what is driving the Seattle real estate market as people keep on moving to Seattle for work, school, or the lifestyle associated with this part of the country.
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One of the KEY CHARACTERISTICS OF THE SEATTLE REAL ESTATE MARKET in recent years has been increasing prices of properties. And this trend is likely to continue, at least in the next few years because of the expected growth in job opportunities. This means one thing – TODAY is the time for Seattle real estate investing as prices tomorrow will already be higher. This is the notion which Forbes also conveys about options for Seattle real estate investing.
REAL ESTATE PROPERTY PRICES in Seattle are some of the highest in the US now, but they are still competitive. When you hear that the median property price in Seattle is $700,000 according to Mashvisor data, don’t forget that 31% of the Seattle population makes $100,000 per year or more, compared to 22% of the general US population. This means that Seattle residents are capable of paying their monthly rents, which is what you want as a real estate investor.
ANOTHER CHARACTERISTIC of the real estate market in Seattle is the low inventory. As more and more people are moving into the city following the always emerging new employment opportunities, any newly listed property is almost immediately bought. So, once again, hurry up with your Seattle real estate investing decision. Options will be even more limited in the upcoming years because of the scarce land left for building in the city.
Below are a few quick numbers that you should keep in mind when you think about Seattle real estate investing.
Seattle Real Estate Investing Quick Figures:
- Median Property Price: $700,000
- Traditional Rental Monthly Income: $2,300
- Traditional Cash on Cash Return: 1.4%
- Traditional Cap Rate: 4.1%
So, if you are now convinced that Seattle real estate investing is the thing for you, and you are interested in the traditional mode of renting (as opposed to Airbnb), you should know the top neighborhoods for traditional Seattle real estate investing.
Related: Your Next Investment: Airbnb Seattle
Seattle Real Estate Investing Top Neighborhoods:
Denny Triangle
Based on Mashvisor data, Denny Triangle is without doubt the best area for Seattle real estate investing. While the median property price is below the average for the city, the expected rental income is significantly higher. This is why you can expect CoC return of 3.9% and a cap rate of 6.9%, the highest among all Seattle neighborhoods. A part of Downtown, Denny Triangle is one of the fastest-growing areas in Seattle, hosting both professional and residential communities, and featuring public parks, shops, restaurants, coffee shops, and bars.
- Median Property Price: $625,000
- Traditional Rental Monthly Income: $2,900
- Traditional Cash on Cash Return: 3.9%
- Traditional Cap Rate: 6.9%
Lakewood
Another top neighborhood for your Seattle real estate investing is Lakewood, which has an even lower median price, but also a lower rental income. Nonetheless, the CoC (3.1%) and the cap rate (6.4%) are both excellent compared to the Seattle averages. This historic area has evolved into a very diverse neighborhood.
- Median Property Price: $519,000
- Traditional Rental Monthly Income: $1,600
- Traditional Cash on Cash Return: 3.1%
- Traditional Cap Rate: 6.4%
Ballard
Ballard is yet another neighborhood which you should seriously consider when choosing your Seattle real estate investing area. The median home price is slightly higher than the average for Seattle, but your rental property will yield an above-average rental income. The nature of this neighborhood has been determined by its maritime history as well as the Scandinavian heritage. 65% of the Ballard population are renters.
- Median Property Price: $727,000
- Traditional Rental Monthly Income: $2,400
- Traditional Cash on Cash Return: 1.6%
- Traditional Cap Rate: 3.2%
Cascade
If you still have not settled on a neighborhood for your Seattle real estate investing decision, then how about Cascade? It is more affordable than Seattle overall, but the rental income is below the average for the city. The CoC and the cap rate are still good, though. This historic area in Downtown Seattle is nowadays a residential neighborhood with condo complexes and apartment buildings.
- Median Property Price: $650,000
- Traditional Rental Monthly Income: $1,300
- Traditional Cash on Cash Return: 1.4%
- Traditional Cap Rate: 4.5%
Once you have decided which neighborhood to go for in your Seattle real estate investing, don’t forget to check out Mashvisor for comparative analytics on hundreds of actual properties in the area.
