Is Anacortes, Washington Good for Airbnb Investment?

To start an Airbnb in Anacortes, Washington, begin by researching local regulations as the city requires short-term rental permits and limits rentals to owner-occupied properties or those in specific zoning areas, with a maximum of 30% of residential units allowed as short-term rentals. Contact Anacortes Planning Department to obtain the required Conditional Use Permit ($500-800) and business license ($50-100), ensuring compliance with fire safety codes, parking requirements (typically 1 space per unit), and noise ordinances. Find a suitable property in residential zones that allow short-term rentals, focusing on areas near downtown, Cap Sante Marina, or Washington Park for tourist appeal, with properties ranging from $400,000-800,000 depending on location and size. Furnish the space with coastal-themed decor, essential amenities including WiFi, kitchen supplies, linens, and outdoor furniture to capitalize on Anacortes' island charm and proximity to ferry terminals serving the San Juan Islands. Create listings on Airbnb, VRBO, and Booking.com with professional photography highlighting water views, ferry access, and nearby attractions like Deception Pass Bridge and whale watching tours, pricing competitively at $120-250 per night depending on season and property size. Manage the property by establishing cleaning protocols between guests, coordinating with local cleaning services ($75-125 per turnover), installing keyless entry systems, and maintaining responsive communication with guests while monitoring city compliance requirements and annual permit renewals to ensure continued operation in this popular Pacific Northwest destination.

To identify profitable short-term rental properties in Anacortes, Washington, focus on waterfront or water-view locations within walking distance of downtown, ferry terminals, and Deception Pass State Park, as these areas command premium rates year-round. Target 2-4 bedroom properties with outdoor spaces, full kitchens, and parking, particularly those built after 1980 with modern amenities, as vacation renters prioritize comfort and convenience. Analyze pricing using AirDNA and Mashvisor to benchmark against similar properties, aiming for locations that can achieve $150-300+ per night during peak summer months (June-September) when tourism peaks due to boating, whale watching, and island access. Research competition by studying existing Airbnb and VRBO listings within a 2-mile radius, identifying gaps in amenities or underpriced properties, while noting that Anacortes has limited hotel inventory which benefits STR demand. Utilize tools like Rabbu, AllTheRooms, and local MLS data through Redfin or Zillow, while consulting Skagit County's STR regulations and connecting with local property managers like Vacasa or RedAwning who understand seasonal patterns driven by ferry traffic to the San Juan Islands, summer festivals, and the area's appeal as a Pacific Northwest maritime destination.

To obtain an Airbnb/STR permit in Anacortes, Washington, you must apply through the City of Anacortes Planning Department located at 904 6th Street or online through their permitting portal. Required documents include a completed short-term rental application, proof of property ownership or lease agreement with landlord consent, site plan showing parking and access, proof of liability insurance (minimum $1 million), emergency contact information for a local representative within 30 minutes of the property, and a good neighbor agreement. The application fee is approximately $200-300 with an annual renewal fee of $150-200. You must also obtain a business license from the city clerk's office for an additional $50-75. The timeline is typically 4-6 weeks for processing, though it may extend to 8 weeks during peak application periods. Anacortes-specific requirements include limiting occupancy to 2 guests per bedroom plus 2 additional guests (maximum 10 people), providing adequate off-street parking (minimum 1 space per rental), maintaining a 24/7 local contact person, posting the permit number in all advertisements, and adhering to noise ordinances with quiet hours from 10 PM to 7 AM. Properties must pass a safety inspection covering smoke detectors, carbon monoxide detectors, fire extinguishers, and emergency egress routes before permit issuance.

Short-term rentals (STRs) are legal in Anacortes, Washington, but operate under specific regulations established by the city. As of 2023, Anacortes requires STR operators to obtain a business license and comply with zoning restrictions that primarily allow STRs in residential zones with certain limitations on the number of guests and parking requirements. The city prohibits STRs in some residential areas to preserve neighborhood character and requires operators to maintain noise standards and provide adequate waste management. Properties must meet safety standards including smoke and carbon monoxide detectors, and operators are subject to occupancy taxes. Recent changes around 2022-2023 included stricter enforcement mechanisms and clearer definitions of what constitutes a short-term rental versus traditional lodging. The city also implemented a complaint process for neighbors and requires STR operators to provide local contact information for issues that may arise during guest stays.

The most promising Airbnb investment areas in Anacortes, Washington include the Historic Downtown District near Commercial Avenue, which attracts tourists visiting the Anacortes Museum and local shops while serving as the ferry departure point to the San Juan Islands, generating consistent year-round demand from island-bound travelers. The Guemes Channel waterfront area offers premium rental potential due to its scenic views and proximity to Washington Park, appealing to nature enthusiasts and families seeking outdoor recreation. The Cap Sante Marina district is ideal for targeting boating enthusiasts and maritime tourists, particularly during summer sailing seasons and events like the Anacortes Arts Festival held annually since the 1960s. Properties near Deception Pass Bridge benefit from heavy tourist traffic visiting Deception Pass State Park, one of Washington's most visited state parks with over 2 million visitors annually. The residential areas around Mount Erie provide elevated views and attract hiking enthusiasts and photographers, while locations near the Anacortes Community Forest Lands appeal to mountain bikers and trail runners, creating demand particularly during peak outdoor recreation months from May through September.

In Anacortes, Washington, Airbnb hosts are subject to multiple lodging taxes including the Washington State Sales Tax at 6.5%, Skagit County Lodging Tax at 2%, and the City of Anacortes Lodging Tax at 2%, totaling approximately 10.5% in combined taxes on short-term rental accommodations. The Washington State Sales Tax applies to all lodging stays under 30 consecutive days, while the local lodging taxes specifically target transient accommodations typically defined as stays less than 30 days. Airbnb automatically collects and remits the state sales tax and local lodging taxes for bookings made through their platform as of 2018-2019, simplifying compliance for hosts. However, hosts booking guests through other channels must register with the Washington State Department of Revenue for a business license, collect taxes from guests, and remit payments monthly or quarterly depending on volume. The city requires hosts to obtain a business license and may require separate registration for local tax collection. Exemptions typically include stays of 30 days or longer, certain government and nonprofit organization bookings, and accommodations for permanent residents, though hosts should verify current exemption criteria with local tax authorities as regulations can change.

Starting an Airbnb in Anacortes, Washington requires significant upfront investment with property purchase being the largest expense at approximately $650,000 based on median home prices in the area as of 2023. Furnishing costs typically range from $15,000-25,000 for a complete setup including beds, linens, kitchen essentials, living room furniture, and decor to create an appealing guest experience. Initial setup costs including professional photography, listing creation, welcome materials, and basic supplies total around $2,000-3,000. Permits and fees vary but expect $500-1,500 for business licenses, short-term rental permits, and any required inspections depending on city regulations. Insurance specifically for short-term rentals adds approximately $1,200-2,000 annually, while utilities including electricity, water, sewer, garbage, internet, and cable average $300-400 monthly. First six months of operating costs including cleaning services, restocking supplies, maintenance, property management software, and marketing total approximately $8,000-12,000. The total startup investment ranges from $685,000-700,000, making it a substantial financial commitment that requires careful planning and adequate capital reserves.

Airbnb properties in Anacortes, Washington demonstrate strong profitability potential due to the city's strategic location near the San Juan Islands ferry terminal and growing tourism sector. Properties typically generate $150-250 per night during peak summer months (May-September) and $80-120 during off-season, with average annual revenues ranging from $35,000-65,000 for well-positioned 2-3 bedroom homes. Operating expenses including cleaning fees ($75-100 per turnover), property management (15-25% of revenue), utilities ($200-300 monthly), insurance ($1,500-2,500 annually), and maintenance typically consume 40-50% of gross revenue. Successful properties near downtown or waterfront areas achieve profit margins of 25-35%, with owners like those operating converted historic homes on Commercial Avenue reporting annual net profits of $18,000-25,000. Key success factors include proximity to ferry terminals, professional photography showcasing water views, competitive pricing during Skagit Valley Tulip Festival season, and maintaining 4.8+ star ratings through consistent cleanliness and local amenities guidance. Properties within walking distance of downtown restaurants and the Anacortes Community Forest Lands typically achieve 70-85% occupancy rates, while those requiring car transportation see 55-70% occupancy, directly impacting overall profitability in this seasonal market driven by island-bound tourists and Pacific Northwest outdoor enthusiasts.

Airbnb investments in Anacortes, Washington typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, driven by the city's proximity to the San Juan Islands ferry terminal and seasonal tourism demand. Properties within walking distance of downtown or waterfront areas command premium nightly rates of $150-250, while standard residential properties average $100-150 per night during peak summer months (June-September). Initial profitability usually occurs within 18-24 months, assuming 60-70% annual occupancy rates and average property acquisition costs of $400,000-600,000. The market benefits from consistent ferry traffic to the islands, Deception Pass State Park visitors, and weekend getaway demand from Seattle metro area residents, with properties typically achieving break-even on operating expenses within 12-15 months and full investment recovery in 7-10 years depending on financing structure and property management efficiency.

STRSearch is a national platform that helps investors identify profitable short-term rental properties in Anacortes, Washington, providing market analysis and investment metrics. Locally, Anacortes Realty Group and Island Properties Real Estate have agents experienced with vacation rental investments in the area. Windermere Real Estate/Anacortes and John L. Scott Real Estate also serve investors looking for Airbnb properties on Fidalgo Island. National services include Mashvisor, which offers rental property analysis tools, AirDNA for short-term rental market data, and Roofstock for turnkey rental property investments. BiggerPockets connects investors with local real estate professionals familiar with STR regulations in Skagit County. RedAwning and Vacasa provide property management services for Airbnb investments, while local property managers like Fidalgo Property Management can assist with operations. Real estate agents specializing in investment properties include those at RE/MAX and Coldwell Banker who understand Anacortes' tourism market and ferry accessibility advantages for vacation rentals.