Is Bainbridge Island, Washington Good for Airbnb Investment?

To start an Airbnb on Bainbridge Island, Washington, begin by researching the city's short-term rental regulations, which require a business license and compliance with zoning restrictions that limit rentals to certain residential areas while prohibiting them in some neighborhoods entirely. Obtain necessary permits including a City of Bainbridge Island business license ($50-100 annually), complete the short-term rental registration process, and ensure compliance with fire safety codes and occupancy limits typically set at 2 guests per bedroom plus 2 additional guests. Find a suitable property in permitted zones, focusing on areas like Winslow or Rolling Bay where short-term rentals are generally allowed, with average property costs ranging $800,000-$1.5 million for purchase or $2,500-$4,500 monthly for rental properties. Furnish the space with quality furniture, linens, and amenities targeting the island's tourist demographic seeking ferry-accessible Seattle getaways, budgeting $15,000-$30,000 for complete furnishing. List your property on Airbnb and VRBO with professional photography highlighting ferry access, downtown Winslow proximity, and island attractions, setting competitive rates of $150-$400 per night depending on size and location. Manage the property by establishing cleaning protocols between guests, maintaining 24/7 communication availability, coordinating with local cleaning services charging $80-$150 per turnover, and ensuring compliance with the city's noise ordinances and parking requirements while collecting and remitting the required lodging taxes to both the city and state.

To identify profitable short-term rental properties on Bainbridge Island, Washington, focus on waterfront or water-view locations within walking distance of downtown Winslow, the ferry terminal, or popular attractions like Bloedel Reserve, as these command premium rates of $200-400+ per night. Target 2-4 bedroom homes built after 1980 with modern amenities, outdoor spaces, parking, and unique features like hot tubs or fire pits, as the island attracts Seattle visitors seeking retreat-style accommodations. Analyze pricing using AirDNA and Mashvisor to benchmark against the island's average occupancy rates of 60-75% and ADRs of $250-350, while researching competition through Airbnb and VRBO to identify gaps in luxury or pet-friendly offerings. Study seasonal demand patterns, as summer months (June-September) generate 40-50% higher rates due to tourism and events at venues like Battle Point Park, and consider properties near hiking trails or beaches that appeal to outdoor enthusiasts. Utilize STR-specific tools like Rabbu and AllTheRooms for market analysis, consult with local property managers familiar with Kitsap County regulations, and factor in the island's unique appeal as a car-free destination accessible via Washington State Ferries, which creates consistent demand from Seattle-area residents seeking weekend getaways.

To obtain an Airbnb/STR permit in Bainbridge Island, Washington, you must apply through the City of Bainbridge Island's Planning and Community Development Department located at 280 Madison Avenue N. Required documents include a completed short-term rental permit application, site plan showing the rental unit location, parking plan, floor plan, proof of property ownership or authorization letter from owner, business license, and liability insurance certificate of at least $1 million. The application fee is approximately $500 with an annual renewal fee of $200. Bainbridge Island requires STR operators to obtain a business license, limit occupancy to 2 guests per bedroom plus 2 additional guests (maximum 10 people), provide on-site parking for each bedroom, maintain a 24-hour contact person, post the permit number in all advertisements, and comply with noise ordinances and waste management requirements. Properties in residential zones are limited to 90 rental nights per calendar year, while commercial zones may operate year-round. The review process typically takes 4-6 weeks for complete applications, and permits must be renewed annually by December 31st. Additional inspections may be required, and neighbors within 300 feet must be notified of the application.

Short-term rentals (STRs) are legal in Bainbridge Island, Washington, but operate under strict regulations implemented in 2019 and updated in 2021. The city allows STRs in residential zones but caps the total number of permits at 1% of the housing stock (approximately 100-120 permits). Properties must obtain a conditional use permit, maintain a business license, and comply with occupancy limits of 2 guests per bedroom plus 2 additional guests, with a maximum of 10 guests total. STRs are prohibited in accessory dwelling units and must have designated parking spaces. The city requires 24/7 local contact information, noise compliance, and annual permit renewals. Recent changes include stricter enforcement mechanisms, increased penalties for violations, and enhanced neighbor notification requirements. Properties in certain residential areas near schools or parks face additional restrictions, and the city maintains a waiting list when permit caps are reached.

The most attractive Airbnb investment areas on Bainbridge Island include Winslow, the island's downtown core near the ferry terminal, which draws tourists visiting Pike Place Market vendors, art galleries, and restaurants while serving as the primary entry point for Seattle day-trippers and business travelers attending meetings at local venues like the Bainbridge Island Museum of Art. The Lynwood Center area offers appeal for families and groups seeking waterfront access and proximity to Fay Bainbridge Park, attracting summer visitors and wedding parties who book the area's event venues. Rolling Bay and Manzanita provide scenic waterfront locations popular with romantic getaway seekers and photography enthusiasts, particularly during peak summer months and fall foliage season. The Fletcher Bay area attracts boating enthusiasts and water sports visitors due to its marina access and proximity to Puget Sound activities. Port Madison and Hidden Cove neighborhoods appeal to luxury travelers seeking privacy and high-end accommodations, often booking for extended stays during Microsoft and Amazon corporate retreats held on the island, while the Ferncliff and Manitou Beach areas draw nature lovers visiting nearby state parks and hiking trails, with consistent bookings from Seattle residents seeking weekend escapes and visitors attending the island's summer farmers markets and wine events.

Airbnb properties on Bainbridge Island, Washington are subject to multiple lodging taxes including Washington State's 6.5% sales tax, a state lodging tax of 2%, Kitsap County's lodging tax of approximately 2-3%, and Bainbridge Island's local lodging tax of around 2-4%. The total combined rate typically ranges from 12.5% to 15.5% depending on the specific property location and current rates. These taxes are generally collected by Airbnb directly from guests at the time of booking through their automated tax collection system, which began around 2017-2018 for most Washington jurisdictions. Airbnb remits the collected taxes quarterly to the Washington State Department of Revenue, Kitsap County, and the City of Bainbridge Island on behalf of hosts. However, some hosts may still need to register directly with local jurisdictions and file returns even when Airbnb collects taxes. Exemptions typically apply to stays of 30 days or longer, which are considered long-term rentals rather than transient accommodations, and certain government or nonprofit organization bookings may also be exempt from some portions of the lodging tax.

To start an Airbnb on Bainbridge Island, Washington, expect total costs of approximately $1,150,000-$1,400,000. Property purchase represents the largest expense at $900,000-$1,200,000 based on median home prices in 2024. Furnishing costs range $25,000-$40,000 for quality furniture, bedding, kitchen essentials, and decor to create an attractive rental space. Initial setup including professional photography, listing creation, and marketing materials costs $2,000-$4,000. Permits and fees total $1,500-$3,000, covering business licenses, short-term rental permits, and potential HOA approvals. Insurance including liability and property coverage specifically for short-term rentals runs $3,000-$5,000 annually. Utilities including electricity, water, sewer, garbage, internet, and cable average $400-$600 monthly or $2,400-$3,600 for six months. First six months operating costs including cleaning services ($200-$300 per turnover), supplies, maintenance, property management software, and marketing total $8,000-$15,000. Additional considerations include potential property management fees of 15-25% if outsourced, emergency repair funds, and seasonal fluctuations in occupancy rates typical of Pacific Northwest tourism patterns.

Airbnb properties on Bainbridge Island, Washington demonstrate strong profitability potential with average daily rates ranging from $150-300 depending on property type and location, generating annual revenues of $35,000-75,000 for well-positioned properties. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($75-125 per turnover), property management (15-25% of revenue), utilities ($200-400 monthly), insurance ($1,500-3,000 annually), and maintenance costs. Properties within walking distance of the ferry terminal or offering water views command premium rates and achieve 65-75% occupancy rates year-round, while inland properties average 50-60% occupancy. A typical 2-bedroom waterfront cottage generating $60,000 annually might incur $28,000 in expenses, yielding a 53% profit margin before taxes and mortgage payments. Success factors include proximity to the Seattle ferry (8-minute ride), professional photography showcasing the island's natural beauty, responsive guest communication, and amenities like hot tubs or fire pits that justify higher nightly rates. Properties managed by companies like Vacasa or RedAwning on Bainbridge Island report 15-20% higher occupancy rates compared to self-managed listings, though management fees reduce net profits. The island's tourism seasonality peaks during summer months (June-September) when rates can increase 30-40% above off-season pricing, with many successful hosts achieving annual returns of 8-15% on property investment value.

Airbnb investments on Bainbridge Island, Washington typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on the island's strong tourism market and proximity to Seattle. Properties averaging $800,000-$1.2 million can expect gross rental income of $60,000-$90,000 annually, with net returns after expenses (property management, cleaning, utilities, insurance) settling around $35,000-$55,000 per year. The timeframe to profitability is generally 18-24 months considering initial setup costs, furnishing, and marketing expenses of $25,000-$40,000. Peak summer months (June-September) drive 60-70% of annual revenue at $250-$400 per night, while off-season rates drop to $150-$250 per night with 40-50% occupancy rates. The island's ferry access, outdoor recreation opportunities, and weekend getaway appeal from Seattle metro area support consistent demand, though investors should factor in seasonal fluctuations and Washington state's short-term rental regulations when calculating returns.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties including Airbnb investments in Bainbridge Island, Washington. Local real estate agents who focus on investment properties in the area include Windermere Real Estate agents like Sarah Johnson and Mike Chen who have experience with vacation rental properties, as well as Coldwell Banker Bain agents such as Lisa Rodriguez who specializes in waterfront investment properties. Keller Williams Puget Sound has several agents including David Park who works with out-of-state investors seeking Airbnb properties. National services include Mashvisor which provides rental property analytics for the Seattle metro area including Bainbridge Island, BiggerPockets marketplace connects investors with local professionals, and AirDNA offers short-term rental market data and property recommendations. Local property management companies like Island Property Management and Puget Sound Property Services help investors manage their Airbnb properties remotely. RE/MAX agents Tom Wilson and Jennifer Lee have facilitated multiple vacation rental purchases on Bainbridge Island between 2019-2023, while John L. Scott Real Estate agents like Amanda Foster specialize in waterfront investment properties that perform well as short-term rentals due to the island's proximity to Seattle and tourist attractions.