Is Madison Park, Washington Good for Airbnb Investment?

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Madison Park, Washington Airbnb Investment Overview

Is Airbnb a Good Investment in Madison Park, Washington?

Investing in Airbnb properties in Madison Park, Washington, presents a nuanced opportunity. The area's current market conditions reflect a highly desirable, affluent neighborhood with consistently high property values, which can be a significant barrier to entry for new investors. While Seattle, as a whole, benefits from strong tourism trends driven by its tech industry, natural beauty, and cultural attractions, Madison Park itself is more of a residential enclave, typically attracting visitors seeking a quieter, upscale experience rather than direct proximity to major tourist hubs. This can translate to a stable but potentially smaller pool of short-term renters compared to more centrally located or highly-trafficked tourist areas. The investment potential, therefore, largely depends on a buyer's ability to acquire property at a price point that allows for competitive rental rates while still yielding a strong return, which can be challenging given the premium on real estate in this specific neighborhood.

How Much Does an Average Airbnb Earn in Madison Park?

Based on available market data and rental analytics, Airbnb properties in Madison Park, Washington typically generate between $3,500 to $8,500 per month, with luxury waterfront properties commanding the higher end of this range due to the neighborhood's prestigious lakefront location and proximity to downtown Seattle. Seasonal variations show peak earnings during summer months (June through September) when monthly revenues can increase by 40-60% above winter averages, driven by favorable weather for outdoor activities and higher tourist demand for Lake Washington access. Winter months typically see the lowest occupancy rates and revenues, often dropping 25-35% below annual averages. Key factors affecting earnings include property size and amenities, with larger homes featuring water views, private docks, or luxury finishes achieving occupancy rates of 75-85% compared to 60-70% for standard properties. Location within Madison Park significantly impacts revenue, as properties within two blocks of the lake shore consistently outperform those further inland by approximately 30-50%. Additional revenue drivers include proximity to Madison Park Beach, walkability to local restaurants and shops, parking availability, and property management quality, with professionally managed listings typically achieving 15-20% higher revenues than owner-managed properties due to optimized pricing strategies and guest services.

Airbnb Return on Investment in Madison Park

Airbnb investments in Madison Park, Washington typically generate ROI between 8-12% annually, with premium waterfront properties achieving up to 15% returns due to the neighborhood's desirable Lake Washington location and proximity to downtown Seattle. The average payback period ranges from 8-12 years, depending on property acquisition costs which average $1.2-2.5 million for single-family homes suitable for short-term rentals. Madison Park properties command nightly rates of $200-450 during peak summer months and $150-300 in off-season, with occupancy rates averaging 65-75% annually. Compared to long-term rentals in the same area, which typically yield 4-6% ROI with monthly rents of $3,500-6,500, Airbnb investments can generate 40-60% higher returns but require significantly more active management and are subject to Seattle's short-term rental regulations including the 90-day annual limit for non-owner occupied properties. The higher returns compensate for increased operational costs, vacancy risks, and regulatory compliance requirements, making Madison Park Airbnb investments attractive for investors willing to manage the additional complexity.

Average Airbnb Occupancy Rate in Madison Park

Madison Park, Washington maintains an average annual Airbnb occupancy rate of approximately 68-72%, with significant seasonal variation throughout the year. Peak occupancy occurs during summer months (June through August) when rates climb to 85-90% due to the neighborhood's proximity to Lake Washington and favorable weather conditions, while winter months (December through February) see occupancy drop to around 45-55%. Spring and fall shoulder seasons typically maintain moderate occupancy rates of 60-70%. Madison Park's occupancy rates generally exceed Washington state averages by 8-12 percentage points, as the state overall averages around 60-65% annually, and outperform national Airbnb averages by approximately 5-10 percentage points, with national rates typically ranging from 62-67%. The neighborhood's premium location in Seattle, waterfront access, upscale amenities, and proximity to downtown attractions contribute to its above-average performance, though occupancy can fluctuate based on local events, university schedules, and broader economic conditions affecting travel demand in the Pacific Northwest region.

Best Neighborhoods for Airbnb in Madison Park

Madison Park itself is the premier Airbnb investment area due to its lakefront location on Lake Washington with private beaches, upscale demographics, and proximity to downtown Seattle, commanding premium nightly rates of $200-400 for waterfront properties. The Denny-Blaine neighborhood immediately north offers similar luxury appeal with historic mansions and lake access, attracting high-end travelers willing to pay $250-350 per night. Madrona, just south of Madison Park, provides a more affordable entry point at $150-250 nightly while still offering lake proximity and easy downtown access via public transit. The Central District adjacent to Madrona has experienced significant gentrification and offers good value with nightly rates of $120-200, appealing to younger professionals and tourists seeking authentic Seattle culture. Capitol Hill, though slightly inland, remains highly desirable for its vibrant nightlife, restaurants, and walkability, supporting rates of $130-220 per night with consistent year-round demand. Leschi, positioned between Madison Park and downtown, offers waterfront access at more moderate prices of $140-200 nightly with good public transportation connections. Mount Baker provides an emerging opportunity with its hillside location offering city and water views, currently supporting rates of $110-180 per night with strong appreciation potential as the area continues developing.

Short-term Rental Regulations in Madison Park

Short-term rental regulations in Madison Park, Washington fall under Seattle's citywide ordinances, which require operators to obtain a Short-Term Rental Operator License through the Seattle Department of Finance and Administrative Services, with annual renewal fees of approximately $150-200. Properties must comply with occupancy limits of two guests per bedroom plus two additional guests, with a maximum of eight guests total, and rentals are restricted to owner-occupied properties where the owner lives on-site for at least six months per year. Madison Park's single-family residential zoning allows short-term rentals only in the operator's primary residence, prohibiting dedicated rental units, and all properties must pass safety inspections including smoke and carbon monoxide detectors, emergency egress requirements, and compliance with building codes. The registration process involves submitting applications with proof of residency, insurance documentation, floor plans, and neighbor notification letters to properties within 100 feet, while recent changes since 2019-2020 have strengthened enforcement mechanisms, increased penalties for violations up to $500 per day, and enhanced monitoring through platforms like Airbnb and VRBO to ensure compliance with the owner-occupancy requirement and registration mandates.

Short-term Rental Fees and Taxes in Madison Park

Short-term rentals in Madison Park, Washington are subject to several fees and taxes including Washington State's 6.5% sales tax, King County's 10.25% lodging tax, and Seattle's additional 2.5% short-term rental tax, totaling approximately 19.25% in combined taxes on rental income. Property owners must obtain a short-term rental operator license from Seattle costing $75 annually, plus a business license fee of approximately $110-$125 depending on the rental's gross receipts. Registration with the Washington State Department of Revenue is required but free, though operators must collect and remit the state sales tax monthly or quarterly. Additional costs may include a one-time inspection fee of around $200-$300 for initial permit approval, and properties must maintain liability insurance with minimum coverage of $1 million, typically costing $500-$1,500 annually depending on the property size and rental frequency.

Is Airbnb a Good Investment in Madison Park, Washington?

Investing in Airbnb properties in Madison Park, Washington, presents a nuanced opportunity. The area's current market conditions reflect a highly desirable, affluent neighborhood with consistently high property values, which can be a significant barrier to entry for new investors. While Seattle, as a whole, benefits from strong tourism trends driven by its tech industry, natural beauty, and cultural attractions, Madison Park itself is more of a residential enclave, typically attracting visitors seeking a quieter, upscale experience rather than direct proximity to major tourist hubs. This can translate to a stable but potentially smaller pool of short-term renters compared to more centrally located or highly-trafficked tourist areas. The investment potential, therefore, largely depends on a buyer's ability to acquire property at a price point that allows for competitive rental rates while still yielding a strong return, which can be challenging given the premium on real estate in this specific neighborhood.

How Much Does an Average Airbnb Earn in Madison Park?

Based on available market data and rental analytics, Airbnb properties in Madison Park, Washington typically generate between $3,500 to $8,500 per month, with luxury waterfront properties commanding the higher end of this range due to the neighborhood's prestigious lakefront location and proximity to downtown Seattle. Seasonal variations show peak earnings during summer months (June through September) when monthly revenues can increase by 40-60% above winter averages, driven by favorable weather for outdoor activities and higher tourist demand for Lake Washington access. Winter months typically see the lowest occupancy rates and revenues, often dropping 25-35% below annual averages. Key factors affecting earnings include property size and amenities, with larger homes featuring water views, private docks, or luxury finishes achieving occupancy rates of 75-85% compared to 60-70% for standard properties. Location within Madison Park significantly impacts revenue, as properties within two blocks of the lake shore consistently outperform those further inland by approximately 30-50%. Additional revenue drivers include proximity to Madison Park Beach, walkability to local restaurants and shops, parking availability, and property management quality, with professionally managed listings typically achieving 15-20% higher revenues than owner-managed properties due to optimized pricing strategies and guest services.

Airbnb Return on Investment in Madison Park

Airbnb investments in Madison Park, Washington typically generate ROI between 8-12% annually, with premium waterfront properties achieving up to 15% returns due to the neighborhood's desirable Lake Washington location and proximity to downtown Seattle. The average payback period ranges from 8-12 years, depending on property acquisition costs which average $1.2-2.5 million for single-family homes suitable for short-term rentals. Madison Park properties command nightly rates of $200-450 during peak summer months and $150-300 in off-season, with occupancy rates averaging 65-75% annually. Compared to long-term rentals in the same area, which typically yield 4-6% ROI with monthly rents of $3,500-6,500, Airbnb investments can generate 40-60% higher returns but require significantly more active management and are subject to Seattle's short-term rental regulations including the 90-day annual limit for non-owner occupied properties. The higher returns compensate for increased operational costs, vacancy risks, and regulatory compliance requirements, making Madison Park Airbnb investments attractive for investors willing to manage the additional complexity.

Average Airbnb Occupancy Rate in Madison Park

Madison Park, Washington maintains an average annual Airbnb occupancy rate of approximately 68-72%, with significant seasonal variation throughout the year. Peak occupancy occurs during summer months (June through August) when rates climb to 85-90% due to the neighborhood's proximity to Lake Washington and favorable weather conditions, while winter months (December through February) see occupancy drop to around 45-55%. Spring and fall shoulder seasons typically maintain moderate occupancy rates of 60-70%. Madison Park's occupancy rates generally exceed Washington state averages by 8-12 percentage points, as the state overall averages around 60-65% annually, and outperform national Airbnb averages by approximately 5-10 percentage points, with national rates typically ranging from 62-67%. The neighborhood's premium location in Seattle, waterfront access, upscale amenities, and proximity to downtown attractions contribute to its above-average performance, though occupancy can fluctuate based on local events, university schedules, and broader economic conditions affecting travel demand in the Pacific Northwest region.

Best Neighborhoods for Airbnb in Madison Park

Madison Park itself is the premier Airbnb investment area due to its lakefront location on Lake Washington with private beaches, upscale demographics, and proximity to downtown Seattle, commanding premium nightly rates of $200-400 for waterfront properties. The Denny-Blaine neighborhood immediately north offers similar luxury appeal with historic mansions and lake access, attracting high-end travelers willing to pay $250-350 per night. Madrona, just south of Madison Park, provides a more affordable entry point at $150-250 nightly while still offering lake proximity and easy downtown access via public transit. The Central District adjacent to Madrona has experienced significant gentrification and offers good value with nightly rates of $120-200, appealing to younger professionals and tourists seeking authentic Seattle culture. Capitol Hill, though slightly inland, remains highly desirable for its vibrant nightlife, restaurants, and walkability, supporting rates of $130-220 per night with consistent year-round demand. Leschi, positioned between Madison Park and downtown, offers waterfront access at more moderate prices of $140-200 nightly with good public transportation connections. Mount Baker provides an emerging opportunity with its hillside location offering city and water views, currently supporting rates of $110-180 per night with strong appreciation potential as the area continues developing.

Short-term Rental Regulations in Madison Park

Short-term rental regulations in Madison Park, Washington fall under Seattle's citywide ordinances, which require operators to obtain a Short-Term Rental Operator License through the Seattle Department of Finance and Administrative Services, with annual renewal fees of approximately $150-200. Properties must comply with occupancy limits of two guests per bedroom plus two additional guests, with a maximum of eight guests total, and rentals are restricted to owner-occupied properties where the owner lives on-site for at least six months per year. Madison Park's single-family residential zoning allows short-term rentals only in the operator's primary residence, prohibiting dedicated rental units, and all properties must pass safety inspections including smoke and carbon monoxide detectors, emergency egress requirements, and compliance with building codes. The registration process involves submitting applications with proof of residency, insurance documentation, floor plans, and neighbor notification letters to properties within 100 feet, while recent changes since 2019-2020 have strengthened enforcement mechanisms, increased penalties for violations up to $500 per day, and enhanced monitoring through platforms like Airbnb and VRBO to ensure compliance with the owner-occupancy requirement and registration mandates.

Short-term Rental Fees and Taxes in Madison Park

Short-term rentals in Madison Park, Washington are subject to several fees and taxes including Washington State's 6.5% sales tax, King County's 10.25% lodging tax, and Seattle's additional 2.5% short-term rental tax, totaling approximately 19.25% in combined taxes on rental income. Property owners must obtain a short-term rental operator license from Seattle costing $75 annually, plus a business license fee of approximately $110-$125 depending on the rental's gross receipts. Registration with the Washington State Department of Revenue is required but free, though operators must collect and remit the state sales tax monthly or quarterly. Additional costs may include a one-time inspection fee of around $200-$300 for initial permit approval, and properties must maintain liability insurance with minimum coverage of $1 million, typically costing $500-$1,500 annually depending on the property size and rental frequency.

* The data on this page is pulled from various internet sources, it is not individually verified by our investment team. To get the most up to date data and insights, please contact the STRSearch team directly.

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How to start an Airbnb in Madison Park, Washington?

To start an Airbnb in Madison Park, Washington, begin by researching Seattle's short-term rental regulations since Madison Park falls under Seattle jurisdiction, which requires hosts to obtain a Short-Term Rental Operator License through the Seattle Department of Construction and Inspections (SDCI), complete a land use review, and register with the Washington State Department of Revenue for tax collection. You'll need to ensure your property meets zoning requirements (most Madison Park residential areas allow short-term rentals with restrictions), obtain necessary permits including a business license from Seattle, and comply with the 90-day annual limit for non-owner occupied rentals or unlimited days if you live on-site. Find a suitable property in Madison Park by working with local real estate agents familiar with waterfront and residential properties, considering proximity to Lake Washington attractions and transportation to downtown Seattle. Furnish the space with quality furniture, linens, and amenities that appeal to visitors seeking lakefront experiences, including kayaks or beach equipment if near the water. Create your Airbnb listing with professional photography highlighting Madison Park's scenic location, nearby Denny Blaine Park, and easy access to downtown Seattle, setting competitive rates based on seasonal demand and local comparables. Manage your property by establishing cleaning protocols, coordinating with local cleaning services, installing smart locks for keyless entry, and maintaining responsive communication with guests while ensuring compliance with Seattle's noise ordinances and neighborhood parking regulations specific to Madison Park's residential character.

What's the best way to identify good STR properties in Madison Park, Washington?

To identify profitable short-term rental properties in Madison Park, Washington, focus on properties within 3-4 blocks of Lake Washington waterfront or Madison Park Beach, as proximity to water drives premium rates of $200-400+ per night. Target 2-4 bedroom homes or condos built after 1980 with parking, outdoor space, and lake or city views, as these command 20-30% higher rates than interior units. Analyze comparable STR pricing using AirDNA and Mashvisor, noting that Madison Park properties typically achieve 65-75% occupancy with average daily rates 40-50% above Seattle's overall STR market due to the neighborhood's exclusivity and recreational amenities. Research competition by monitoring active Airbnb and VRBO listings within a 0.5-mile radius, identifying gaps in luxury amenities like hot tubs, high-end furnishings, or waterfront access that can justify premium positioning. Utilize Rabbu and STR Helper for Madison Park-specific market data, while leveraging local resources like the Madison Park Community Council website and Windermere Real Estate agents who specialize in the area to understand seasonal demand patterns, with peak performance typically occurring May through September when lake activities and events like the Madison Park Art Walk drive increased bookings.

How to get an Airbnb permit in Madison Park, Washington?

To obtain an Airbnb/STR permit in Madison Park, Washington, you must apply through the City of Seattle's Department of Construction and Inspections (SDCI) since Madison Park is within Seattle city limits. Begin by creating an online account at the SDCI portal and submit a Short-Term Rental Operator License application, which requires a completed application form, proof of property ownership or lease agreement with landlord consent, a floor plan showing the rental unit, proof of liability insurance ($1 million minimum), a business license from Seattle, and payment of the $150 application fee plus $75 annual renewal fee. You must also pass a life safety inspection conducted by the Seattle Fire Department, which costs approximately $280, and ensure your property meets all zoning requirements (Madison Park allows STRs in single-family and multifamily zones with restrictions). The process typically takes 4-6 weeks from application submission to permit approval, provided all documents are complete and the property passes inspection. Additionally, you must register with the Washington State Department of Revenue for tax purposes, display your permit number in all listings, and comply with Seattle's STR regulations including maximum occupancy limits, quiet hours, and parking requirements specific to Madison Park's residential character.

Is it legal to operate a short-term rental in Madison Park, Washington?

Short-term rentals (STRs) are legal in Madison Park, Washington, but operate under Seattle's comprehensive STR regulations implemented in 2017 and updated through 2023. Madison Park, as a neighborhood within Seattle, follows the city's rules requiring STR operators to obtain a Short-Term Rental Operator License, limit rentals to primary residences only (no investment properties), and cap rentals at 90 nights per year for entire home rentals when the host is not present. Properties must meet safety requirements including smoke and carbon monoxide detectors, and operators must collect and remit city taxes. Seattle prohibits STRs in certain affordable housing units and requires hosts to register with the city, maintain insurance, and follow noise and occupancy limits. Recent changes have strengthened enforcement mechanisms and increased penalties for non-compliance, while maintaining the primary residence requirement to preserve neighborhood character and housing stock for long-term residents.

What are the best places to invest in Airbnb in Madison Park, Washington?

Madison Park in Seattle, Washington offers excellent Airbnb investment opportunities primarily in the waterfront areas along Lake Washington, particularly near Madison Park Beach and the Madison Park neighborhood core around East Madison Street and 42nd Avenue East. The lakefront properties command premium rates due to stunning water views, beach access, and proximity to the Madison Park Beach during summer months when tourism peaks from June through September. The area attracts leisure travelers seeking waterfront experiences, families visiting the nearby Seattle Japanese Garden and Washington Park Arboretum, and business travelers preferring a quieter alternative to downtown Seattle while maintaining easy access via the Madison Street corridor. Properties within walking distance of Madison Park Cafe and local boutiques on Madison Street perform well year-round, benefiting from the neighborhood's upscale residential character and appeal to visitors attending events at nearby venues like the Seattle Tennis Club. The combination of natural beauty, recreational activities, and proximity to both the University of Washington and downtown Seattle makes Madison Park particularly attractive for weekend getaways and extended stays, with average daily rates typically 15-25% higher than Seattle's overall Airbnb market.

Airbnb and lodging taxes in Madison Park, Washington

Airbnb properties in Madison Park, Washington are subject to multiple lodging taxes including Washington State's 6.5% sales tax, King County's 2.5% lodging tax, and Seattle's 8.5% lodging tax for a combined rate of approximately 17.5% on short-term rental stays. The Washington State Department of Revenue requires hosts to register for a business license and collect the 6.5% state sales tax, which must be remitted monthly or quarterly depending on volume. King County's 2.5% lodging tax is collected by the county and supports tourism promotion, with remittance required monthly for properties generating over $1,000 in monthly tax liability. Seattle imposes an 8.5% lodging tax that applies to stays under 30 consecutive days, collected through the city's tax system with monthly remittance required for most operators. Airbnb may collect and remit some of these taxes on behalf of hosts through their platform, but hosts remain ultimately responsible for compliance and should verify which taxes are being handled by the platform versus requiring direct remittance. Properties renting for 30 days or longer are typically exempt from lodging taxes but may still be subject to regular sales tax, and certain low-income housing or extended-stay arrangements may qualify for additional exemptions under Washington State Revenue Code provisions established around 2018-2019.

Total cost to purchase, furnish and operate an Airbnb in Madison Park, Washington

Starting an Airbnb in Madison Park, Washington requires approximately $1,850,000-$2,100,000 in total initial investment. Property purchase represents the largest expense at $1,600,000-$1,800,000 for a median-priced home in this upscale Seattle neighborhood as of 2024. Furnishing costs range from $25,000-$40,000 for quality furniture, bedding, kitchen essentials, and decor to create an attractive rental space. Initial setup expenses including professional photography, listing creation, welcome materials, and basic supplies total $2,000-$3,500. Permits and fees encompass Seattle's short-term rental license ($150), business license ($110), and potential homeowner association approvals costing $500-$1,000 total. Insurance requires specialized short-term rental coverage adding $2,000-$3,000 annually beyond standard homeowner's insurance. Utilities including electricity, gas, water, internet, and cable average $350-$500 monthly. First six months of operating costs including utilities ($2,100-$3,000), cleaning services ($3,600-$6,000), maintenance reserves ($2,000-$4,000), marketing ($1,000-$2,000), and platform fees on estimated bookings ($4,000-$8,000) total approximately $12,700-$23,000, bringing the complete startup investment to roughly $1,850,000-$2,100,000.

Are Airbnb properties in Madison Park, Washington profitable?

Airbnb properties in Madison Park, Washington typically generate strong profitability due to the neighborhood's prime location on Lake Washington and proximity to downtown Seattle, with average nightly rates ranging from $150-300 for well-appointed properties. A typical 2-bedroom waterfront unit can generate approximately $4,000-6,000 monthly revenue during peak season (May-September) and $2,500-4,000 during off-season, resulting in annual revenues of $40,000-65,000. Operating expenses typically include cleaning fees ($50-80 per turnover), property management (15-25% of revenue), utilities ($200-400 monthly), insurance ($1,500-3,000 annually), and maintenance costs ($2,000-5,000 annually), totaling roughly 40-50% of gross revenue. Properties with lake views, modern amenities, and professional photography achieve the highest occupancy rates of 70-85%, while those without water views average 60-75% occupancy. Success factors include strategic pricing during University of Washington events, tech conferences, and summer lake season, with properties like luxury condos in the Denny-Blaine area of Madison Park commanding premium rates and achieving profit margins of 35-45% after all expenses, making this market particularly attractive for investors willing to maintain high hospitality standards.

What is the expected return on investment for an Airbnb in Madison Park, Washington?

Airbnb investments in Madison Park, Washington typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, based on the neighborhood's proximity to Lake Washington and strong demand from business travelers visiting nearby tech companies like Microsoft and Amazon. Properties in this affluent Seattle neighborhood, with median home values around $1.2-1.8 million as of 2023, can expect gross rental yields of 4-6% annually, with net returns after expenses, taxes, and management fees settling at 8-12%. Cash-on-cash returns for leveraged properties with 20-25% down payments typically achieve 6-10% annually, while timeframe to profitability usually occurs within 12-18 months due to Madison Park's consistent occupancy rates of 70-80% and average daily rates of $180-250. The market benefits from year-round demand driven by the area's waterfront location, upscale dining, and proximity to downtown Seattle, with peak summer months generating 15-20% higher revenues than winter periods.

What company can help me find and buy a profitable Airbnb in Madison Park, Washington?

STRSearch is a national platform that specializes in identifying profitable short-term rental properties for investors in Madison Park, Washington. Local Seattle-area real estate agents like those at Windermere Real Estate and John L. Scott specialize in investment properties around Lake Washington and can identify prime Airbnb opportunities in Madison Park's luxury market. RedAwning and AirDNA provide market analysis and property identification services for short-term rental investments in the Seattle metro area. Vacasa offers property management services for Airbnb investors in Madison Park, while AvantStay focuses on group rental properties in premium locations like Madison Park. Local investment-focused agents at Compass Seattle and Redfin have experience with vacation rental properties near the lake. BiggerPockets connects investors with local Seattle real estate professionals who understand the Madison Park market dynamics. Mashvisor provides investment property analysis tools specifically for Airbnb properties in Washington state markets. Local property management companies like Seattle Oasis Vacation Rentals and Elite Host Co specialize in managing short-term rentals in upscale Seattle neighborhoods including Madison Park.

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