Is Orcas Island, Washington Good for Airbnb Investment?

To start an Airbnb on Orcas Island, Washington, begin by researching San Juan County's short-term rental regulations, which require a Conditional Use Permit (CUP) for properties operating as vacation rentals for less than 30 days, with applications typically costing $1,500-$3,000 and taking 3-6 months for approval through the county planning department. Obtain necessary permits including the CUP, business license from San Juan County ($50-$100 annually), and Washington State business license, while ensuring compliance with septic system requirements and fire safety codes specific to the island. Find suitable property by working with local real estate agents familiar with vacation rental zoning (primarily Rural Residential and Rural zones allow short-term rentals with permits), considering properties near popular areas like Eastsound, Doe Bay, or waterfront locations, with typical investment ranging from $400,000-$1.5 million depending on size and location. Furnish the property with durable, coastal-appropriate furniture and amenities that appeal to tourists seeking Pacific Northwest experiences, including outdoor gear storage, kayak racks, and cozy indoor spaces for rainy weather, budgeting $15,000-$40,000 for complete furnishing. List your property on Airbnb, VRBO, and local rental sites like San Juan Island Vacation Rentals, highlighting unique island features such as whale watching opportunities, hiking trails, and proximity to Moran State Park, with competitive nightly rates typically ranging from $150-$500 depending on property size and season. Manage the property either personally or through local management companies like Orcas Island Vacation Rentals or San Juan Property Management, ensuring regular maintenance, cleaning between guests (budget $75-$150 per turnover), and compliance with the island's quiet hours and parking restrictions while maintaining good relationships with neighbors in this close-knit island community.

To identify profitable short-term rental properties on Orcas Island, Washington, focus on waterfront or water-view locations within walking distance of Eastsound village, Doe Bay, or near popular attractions like Moran State Park and Mount Constitution, as these areas command premium rates year-round. Target properties with 2-4 bedrooms, outdoor spaces like decks or patios, fireplaces, hot tubs, and unique architectural features that photograph well, as Orcas Island visitors seek authentic Pacific Northwest experiences and are willing to pay $200-400+ per night during peak summer months (June-September) and $150-250 during shoulder seasons. Conduct pricing analysis using AirDNA and Mashvisor to track seasonal rate fluctuations, with summer occupancy rates typically reaching 80-90% while winter drops to 40-60%, and research competition through Airbnb and VRBO searches focusing on properties with consistently high ratings and booking frequency. Utilize local resources like the Orcas Island Chamber of Commerce for tourism data, San Juan County planning department for zoning regulations and STR permit requirements, and connect with local property managers like Orcas Island Vacation Rentals or San Juan Property Management who understand the unique challenges of ferry-dependent logistics, seasonal maintenance needs, and the island's limited inventory of approximately 200-300 active STRs serving the 500,000+ annual visitors to the San Juan Islands.

To obtain an Airbnb/STR permit on Orcas Island, Washington, you must apply through San Juan County's Planning Department either online via their permit portal or in-person at 135 Rhone Street, Friday Harbor, WA 98250. Required documents include a completed Short-Term Rental Permit application, site plan showing parking and septic system, proof of septic system approval from San Juan County Health Department, fire safety inspection certificate, liability insurance documentation (minimum $1 million), business license from Washington State, and neighbor notification forms signed by adjacent property owners within 300 feet. The application fee is approximately $500-750 with annual renewal fees around $200-300. The timeline typically takes 60-90 days for initial approval, depending on completeness of application and any required inspections. Orcas Island-specific requirements include maximum occupancy limits based on septic capacity (usually 2 people per bedroom plus 2 additional), mandatory 24/7 local contact person residing within 30 minutes of the property, compliance with rural zoning density requirements, adequate off-street parking (minimum 1 space per bedroom), and adherence to noise ordinances with quiet hours from 10 PM to 7 AM. Properties must also meet all building and fire codes, maintain guest registry records for at least 3 years, and display permit numbers in all advertising materials.

Short-term rentals (STRs) are legal on Orcas 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 to approximately 200-250 units, and mandates compliance with specific operational standards including noise restrictions, parking requirements, and occupancy limits. STRs are prohibited in certain residential zones and must maintain a minimum distance from each other in some areas to preserve neighborhood character. Recent changes in 2022-2023 have strengthened enforcement mechanisms, increased permit fees, and added requirements for local property management representation. The county also requires STR operators to collect and remit lodging taxes, maintain liability insurance, and provide 24/7 contact information for complaints, with violations potentially resulting in permit revocation and significant fines.

The best areas for Airbnb investment on Orcas Island, Washington are Eastsound village, which serves as the main commercial hub with restaurants, shops, and ferry access making it highly attractive to tourists seeking convenience and walkability; Doe Bay area on the southeast shore, popular for its natural hot springs, yoga retreats, and scenic waterfront locations that draw wellness tourists and nature enthusiasts; Moran State Park vicinity including areas near Mount Constitution, attracting outdoor recreation visitors, hikers, and families seeking proximity to the island's premier hiking and camping destination; West Sound area offering quieter waterfront properties appealing to luxury travelers and those seeking secluded retreats while still maintaining reasonable access to amenities; and Olga area on the eastern shore, which provides a balance of natural beauty, artistic community atmosphere, and access to Obstruction Pass State Park, making it attractive to both adventure seekers and cultural tourists visiting local galleries and studios.

Airbnb hosts on Orcas Island, Washington are subject to multiple lodging taxes including Washington State's 6.5% sales tax, the state's 0.2% lodging tax, San Juan County's 2% lodging tax, and potentially a local tourism promotion area tax of approximately 1-2%. The total effective tax rate typically ranges from 9-11% on short-term rental bookings. These taxes are generally collected by Airbnb directly from guests at the time of booking for properties enrolled in Airbnb's tax collection service, which began around 2017-2018 for Washington State. For hosts not using Airbnb's automatic collection, they must register with the Washington State Department of Revenue, obtain a business license, collect taxes from guests, and remit payments monthly or quarterly depending on volume. San Juan County requires separate registration and remittance for county lodging taxes. Exemptions typically apply to stays exceeding 30 consecutive days, which are considered long-term rentals rather than transient accommodations, and some properties may qualify for exemptions if they rent fewer than a specified number of days per year, though specific thresholds vary by jurisdiction.

Starting an Airbnb on Orcas Island, Washington requires significant upfront investment due to the island's premium real estate market. Property purchase costs average $850,000-$1,200,000 for a suitable vacation rental home based on 2023-2024 market data, with waterfront or view properties commanding higher prices. Furnishing costs typically range $25,000-$40,000 for a complete setup including beds, linens, kitchen equipment, outdoor furniture, and decor to create an appealing guest experience. Initial setup expenses include professional photography ($500-$800), listing creation, welcome materials, and basic supplies totaling approximately $2,000-$3,000. Permits and fees in San Juan County include business license ($100), transient accommodation tax registration, and potential conditional use permits which can total $1,500-$5,000 depending on zoning requirements. Insurance costs run $3,000-$5,000 annually for comprehensive short-term rental coverage through companies like Proper Insurance or CBIZ. Monthly utilities including electricity, water, sewer, garbage, internet, and propane average $300-$500 per month. First six months operating costs encompass utilities ($1,800-$3,000), cleaning services at $100-$150 per turnover, supplies and maintenance ($1,500), marketing ($500), and property management if outsourced (25-30% of revenue). Total startup costs range from approximately $885,000 to $1,260,000, making Orcas Island one of the more expensive markets for Airbnb investment in the Pacific Northwest.

Airbnb properties on Orcas Island, Washington demonstrate strong profitability potential with average nightly rates ranging from $150-400 depending on property type and season, generating annual revenues of $35,000-85,000 for well-managed properties. Operating expenses typically include 25-30% for cleaning and maintenance, 10-15% for property management, 8-12% for utilities, and 3-5% for Airbnb fees, resulting in net profit margins of 40-55% for debt-free properties. Success factors include waterfront or view locations which command 30-40% premium rates, professional photography and staging, responsive guest communication, and strategic pricing during peak summer months (June-September) when occupancy rates reach 80-90% compared to 40-50% in winter. Properties near Moran State Park, Eastsound village, or with private beach access consistently outperform, with some luxury waterfront homes generating over $120,000 annually. The island's limited accommodation options and strong tourism demand from Seattle metro area visitors create favorable market conditions, though seasonal fluctuations require careful cash flow management and many successful operators supplement with long-term winter rentals to maintain year-round income streams.

Airbnb investments on Orcas Island, Washington typically generate annual ROI of 12-18% with cash-on-cash returns ranging from 8-15%, depending on property location and amenities. Properties closer to ferry terminals and popular attractions like Moran State Park command higher nightly rates of $200-400, while more remote locations average $150-250 per night. The seasonal nature of tourism means 70-80% of annual revenue occurs between May and September, with occupancy rates reaching 75-85% during peak summer months and dropping to 25-35% in winter. Initial profitability usually occurs within 18-24 months for well-positioned properties, though the high acquisition costs averaging $800,000-1.2 million for suitable vacation rental properties require substantial upfront investment. Properties with waterfront access, hot tubs, or unique architectural features consistently outperform the market, achieving gross rental yields of 6-9% annually, while factoring in property management fees of 20-25%, maintenance costs, and seasonal vacancy periods typically results in net returns of 4-7% before tax benefits.

STRSearch is a national platform that specializes in identifying profitable short-term rental properties including Airbnb investments in markets like Orcas Island, Washington. Local real estate agents serving the San Juan Islands include Coldwell Banker San Juan Islands with agents like John Cain and Susan Moulton who have extensive knowledge of vacation rental properties, while Windermere Real Estate San Juan Islands offers agents such as Michael Russell and Patricia Trullinger who specialize in investment properties. National services include Mashvisor which provides Airbnb analytics for the Pacific Northwest, BiggerPockets marketplace connecting investors with local professionals, Roofstock which occasionally features short-term rental properties in Washington state, and AirDNA providing market data and investment analysis for Orcas Island. Local property management companies like San Juan Property Management and Island Property Management can assist with identifying properties suitable for Airbnb conversion, while vacation rental management firms such as Vacasa and RedAwning have experience in the San Juan Islands market and can provide insights on profitable property characteristics. Real estate investment groups like the Seattle Real Estate Investors Association occasionally organize trips to analyze island markets including Orcas Island for short-term rental opportunities.