Is Lopez Island, Washington Good for Airbnb Investment?

To start an Airbnb on Lopez Island, Washington, begin by researching San Juan County's short-term rental regulations, which typically require a business license and conditional use permit for properties operating more than 90 days annually, with specific zoning restrictions and occupancy limits that vary by property type. Contact San Juan County Planning Department to obtain the necessary Conditional Use Permit (CUP) for short-term rentals, which involves submitting an application, site plan, and paying fees around $1,500-$3,000, followed by a public hearing process that can take 3-6 months. Find a suitable property by working with local real estate agents familiar with Lopez Island's market, focusing on areas zoned for short-term rentals and considering proximity to amenities like Lopez Village, Odlin County Park, or waterfront access, with property prices typically ranging from $400,000-$1,200,000 depending on location and size. Furnish the property with durable, coastal-appropriate furniture and amenities that appeal to island visitors, including outdoor gear storage, kayak racks, bicycles, and weather-appropriate bedding, while ensuring compliance with safety requirements like smoke detectors, carbon monoxide detectors, and emergency evacuation plans. List your property on Airbnb and other platforms like VRBO, emphasizing Lopez Island's unique attractions such as cycling, kayaking, hiking at Iceberg Point, and the island's quiet, rural atmosphere, with competitive pricing typically ranging from $150-$400 per night depending on season and property size. Manage the property by either hiring a local property management company familiar with San Juan County regulations and Lopez Island logistics, or handling it yourself while ensuring compliance with tax obligations including Washington State sales tax, San Juan County lodging tax, and maintaining detailed records for annual CUP renewal requirements.

To identify profitable short-term rental properties on Lopez Island, Washington, focus on waterfront or water-view locations within walking distance of Spencer Spit State Park, Odlin County Park, or Lopez Village, as these areas command premium rates of $200-400 per night during peak summer months. Target properties with 2-4 bedrooms, full kitchens, outdoor spaces like decks or patios, and unique features such as hot tubs, fire pits, or kayak access, as Lopez Island attracts families and couples seeking nature-based retreats. Analyze pricing using AirDNA and Mashvisor to benchmark against the island's 150-200 existing STR properties, noting that occupancy rates typically range 60-75% annually with seasonal peaks from May through September. Research competition by studying listings on Airbnb and VRBO for properties within 2-3 miles, focusing on amenities, pricing strategies, and guest reviews to identify market gaps. Utilize Lopez Island-specific resources including the San Juan County vacation rental permit database, local real estate agents familiar with STR regulations, and the Lopez Island Chamber of Commerce for tourism data, while monitoring ferry capacity and seasonal visitor patterns through Washington State Ferries statistics to understand demand fluctuations that drive the island's tourism-dependent rental market.

To obtain an Airbnb/STR permit in Lopez Island, Washington, you must apply through San Juan County's planning department as Lopez Island falls under county jurisdiction. Begin by submitting a Short-Term Rental Business License application to San Juan County Planning Department located at 135 Rhone Street, Friday Harbor, WA 98250, or apply online through their permitting portal. Required documents include a completed application form, site plan showing parking and septic system, proof of property ownership or authorization letter from owner, septic system inspection report (if applicable), fire safety plan, and neighborhood notification affidavit. You'll need to pay approximately $500-800 in application fees plus annual renewal fees of around $200-300. The approval timeline typically takes 60-90 days from submission of complete application. Specific Lopez Island requirements include maintaining adequate parking spaces (minimum 2 per unit), ensuring septic system capacity meets occupancy levels, providing emergency contact information to neighbors within 300 feet, maintaining guest registry, limiting occupancy to posted maximums, and ensuring quiet hours compliance between 10 PM and 7 AM. Properties must also meet all building and fire codes, have working smoke and carbon monoxide detectors, and maintain liability insurance coverage of at least $1 million.

Short-term rentals (STRs) are legal on Lopez Island, Washington, but are subject to San Juan County's comprehensive regulations established in 2019 and updated through 2023. The county requires STR operators to obtain a conditional use permit, limits the total number of STR permits island-wide, and mandates compliance with health department septic system requirements, fire safety standards, and noise ordinances. Properties must meet specific parking requirements, maintain guest registries, and display permit numbers in all advertising. The county prohibits STRs in certain residential zones and requires a minimum 100-foot separation between permitted STR properties in some areas. Recent changes include stricter enforcement mechanisms, increased permit fees, and enhanced neighbor notification requirements during the application process. Operators must also collect and remit local lodging taxes and ensure properties comply with Americans with Disabilities Act requirements where applicable. The regulations aim to balance tourism revenue with preserving the island's rural character and addressing community concerns about housing availability and neighborhood impacts.

The best areas for Airbnb investment on Lopez Island, Washington are around Lopez Village, the Fisherman Bay area, and properties near Spencer Spit State Park. Lopez Village offers the highest rental potential due to its concentration of restaurants, shops, and the main ferry terminal, making it convenient for tourists who prefer walkable access to amenities and dining options like Bay Cafe and Love Dog Cafe. The Fisherman Bay area is particularly attractive for waterfront properties that can command premium rates, especially during summer months when visitors seek kayaking, sailing, and fishing experiences, with properties here potentially earning 20-30% more than inland locations. Spencer Spit State Park vicinity is ideal for nature-focused travelers and families, as the park attracts thousands of visitors annually for camping, beachcombing, and hiking, creating consistent demand from May through September. Properties along Mud Bay Road and near Agate Beach also perform well due to their scenic waterfront locations and proximity to popular cycling routes, as Lopez Island is renowned among cycling enthusiasts for its gentle terrain and scenic roads, generating steady bookings from this niche market throughout the warmer months.

Airbnb operators on Lopez Island, Washington are subject to multiple lodging taxes including Washington State's 6.5% sales tax, San Juan County's 2% lodging tax, and potentially a local Lopez Island lodging tax of approximately 1-3%. The Washington State Department of Revenue requires hosts to register for a business license and collect the 6.5% sales tax on all rental income, which must be remitted monthly or quarterly depending on volume through the state's online portal. San Juan County's 2% lodging tax applies to stays under 30 days and is collected by the county treasurer's office, with remittance typically required quarterly. Lopez Island may impose an additional municipal lodging tax collected through the county system, bringing total tax rates to approximately 9.5-11.5% on short-term rentals. Airbnb automatically collects and remits Washington State sales tax for participating hosts as of 2018, but hosts remain responsible for registering with local jurisdictions and ensuring county and municipal taxes are properly collected and remitted. Stays of 30 days or longer are generally exempt from lodging taxes but remain subject to regular sales tax, and some jurisdictions offer exemptions for certain types of accommodations or low-income housing providers.

Starting an Airbnb on Lopez Island, Washington requires significant upfront investment due to the island's premium real estate market. Property purchase costs average $650,000-$850,000 for a suitable vacation rental home based on 2023-2024 market data from Windermere Real Estate and John L. Scott. Furnishing costs typically range $25,000-$40,000 for a complete setup including beds, linens, kitchen equipment, and outdoor furniture from retailers like West Elm and Pottery Barn. Initial setup expenses including professional photography, listing creation, and marketing materials cost approximately $2,500-$4,000. San Juan County requires a vacation rental permit ($500 annually) plus business license ($150), with potential impact fees of $1,000-$3,000 depending on property size. Insurance through companies like VRBO or specialized STR insurers like Proper Insurance costs $2,000-$3,500 annually. Utilities including electricity, water, internet, and propane average $300-$500 monthly. First six months operating costs including cleaning services ($150 per turnover), supplies, maintenance, and platform fees (3% Airbnb, 5% VRBO) total approximately $8,000-$12,000. Total startup costs range from $690,000-$915,000, making Lopez Island one of the more expensive markets for Airbnb investment in Washington State.

Airbnb properties on Lopez Island, Washington typically generate annual revenues between $35,000-$65,000 for well-positioned vacation rentals, with peak summer months (June-September) accounting for 60-70% of bookings at average daily rates of $180-$280. Operating expenses generally run 40-50% of gross revenue, including property management fees (15-25%), cleaning costs ($75-$125 per turnover), utilities ($200-$400 monthly), insurance ($2,000-$4,000 annually), and maintenance reserves. Net profit margins typically range from 25-35% for owner-operated properties, though this drops to 15-25% when using professional management companies like Vacasa or RedAwning. Success factors include waterfront or water-view locations, proximity to Lopez Village or Odlin County Park, modern amenities, and strong photography showcasing the island's natural beauty. Properties with hot tubs, kayaks, or bicycles command premium rates, while those offering multi-generational accommodations (3+ bedrooms) see higher occupancy during summer family vacation season. The island's limited accommodation options and ferry access create natural demand constraints that support pricing power, though seasonality remains challenging with winter occupancy often dropping below 30%. Properties purchased specifically for short-term rental investment typically see 8-12% annual returns when factoring in appreciation, though recent interest rate increases and stricter county regulations have compressed margins since 2022.

Airbnb investments on Lopez Island, Washington typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% based on the island's seasonal tourism patterns and limited rental inventory. Properties purchased in the $400,000-$800,000 range can expect gross rental yields of $35,000-$65,000 annually, with peak summer months (June-September) commanding $200-$350 per night while shoulder seasons average $120-$180 nightly. Most investors achieve profitability within 18-24 months after accounting for initial renovation costs, property management fees of 20-25%, and seasonal vacancy rates of 35-40%. The San Juan Islands market has shown consistent 4-6% annual appreciation since 2019, with Lopez Island specifically benefiting from its reputation as the "friendliest isle" and growing demand for Pacific Northwest vacation rentals, though investors should factor in ferry transportation limitations that can impact booking rates during winter months.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors looking in Lopez Island, Washington. Local real estate agents serving the San Juan Islands including Lopez Island who work with Airbnb investors include Windermere Real Estate San Juan Islands, John L. Scott San Juan Islands, and Coldwell Banker San Juan Islands, with agents like those at San Juan Islands Sotheby's International Realty having experience in vacation rental properties since around 2015. National services that help investors find Airbnb properties include AirDNA (founded 2015), Mashvisor, BiggerPockets, and Roofstock, while companies like RedAwning and Vacasa provide property management services for short-term rentals in the Pacific Northwest region. Local property management companies serving Lopez Island include San Juan Property Management and Island Property Management, and investment-focused real estate companies like HomeUnion and Roofstock have expanded their services to include Washington state markets since approximately 2018-2020.