Is Pentagon City, Virginia Good for Airbnb Investment?

To start an Airbnb in Pentagon City, Virginia, begin by researching Arlington County's short-term rental regulations, which require hosts to obtain a Transient Occupancy Tax Certificate and register with the county, as Arlington County has specific zoning restrictions that may limit short-term rentals in certain residential areas. Obtain necessary permits including a business license from Arlington County (approximately $50-100) and ensure compliance with fire safety codes and occupancy limits, while also registering for Virginia state taxes and Arlington County's transient occupancy tax (currently 5.75%). Find a suitable property by focusing on condominiums or single-family homes near Pentagon City Mall, Crystal City, or areas with easy Metro access, considering that many HOAs and condo associations in Pentagon City prohibit short-term rentals, so verify building policies before purchasing or leasing. Furnish the space with modern, comfortable furniture targeting business travelers and tourists, including high-speed internet, workspace areas, and amenities like coffee makers and local guidebooks, with typical furnishing costs ranging $8,000-15,000 for a one-bedroom unit. List your property on Airbnb and other platforms like VRBO, setting competitive rates (typically $80-150 per night for Pentagon City area), creating professional photos, and highlighting proximity to Pentagon, Washington DC, National Airport, and Metro stations. Manage the property by establishing cleaning protocols between guests (budget $30-50 per turnover), implementing keyless entry systems, maintaining responsive communication with guests, and considering hiring local property management companies like RedAwning or Vacasa if managing remotely, while keeping detailed records for tax purposes and ensuring compliance with Arlington County's annual registration renewals and reporting requirements.

To identify profitable short-term rental properties in Pentagon City, Virginia, focus on locations within walking distance of the Pentagon City Metro station and Pentagon City Mall, as proximity to these transit and shopping hubs drives consistent demand from business travelers and tourists visiting Washington DC. Target properties with 1-3 bedrooms, modern amenities, dedicated parking, and strong WiFi infrastructure, as corporate travelers and government contractors frequently book extended stays in this area. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against comparable properties, aiming for properties that can command $100-200 per night given the area's proximity to the Pentagon, Reagan National Airport, and downtown DC. Research competition by analyzing existing Airbnb and VRBO listings within a 1-mile radius, noting occupancy rates, pricing strategies, and guest reviews to identify market gaps. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through partnerships with Arlington County real estate agents to evaluate properties, while monitoring STR regulations through Arlington County's zoning department since Virginia allows short-term rentals but local jurisdictions may have specific requirements. Properties near Crystal City and Pentagon Row typically perform well due to Amazon HQ2 proximity, with optimal investment targets being condos or townhomes priced between $400,000-700,000 that can generate 15-25% annual returns through strategic pricing and professional management.

To obtain an Airbnb/STR permit in Pentagon City, Virginia, you must apply through Arlington County since Pentagon City is located within Arlington County jurisdiction. Begin by submitting an application to the Arlington County Zoning Office located at 2100 Clarendon Boulevard, submitting Form ZA-2021-0001 for Short-Term Rental Registration along with required documents including proof of property ownership or lease agreement with landlord consent, Virginia business license, liability insurance certificate for minimum $1 million coverage, floor plan showing maximum occupancy, and contact information for a local responsible party available 24/7. The application fee is approximately $150 with an additional $75 annual renewal fee, and processing typically takes 4-6 weeks from submission of complete application. Pentagon City specific requirements include maximum occupancy of 2 guests per bedroom plus 2 additional guests, parking must be provided on-site, no more than 2 short-term rentals permitted per property owner within Arlington County, quiet hours enforcement from 10 PM to 7 AM, and compliance with all HOA or condo association rules if applicable. You must also register with the Virginia Department of Taxation for transient occupancy tax collection and remit 5.3% county tax plus applicable state taxes, maintain guest registry for minimum 3 years, and display permit number in all online listings and advertisements.

Short-term rentals (STRs) in Pentagon City, Virginia are legal but subject to Arlington County's regulations, which were updated in 2019. The county allows STRs in residential zones but requires hosts to obtain a use permit, register their property, pay transient occupancy taxes, and comply with safety requirements including smoke detectors and fire extinguishers. Properties must be owner-occupied or the owner's primary residence, rentals are limited to 90 days per year for non-primary residences, and no more than two bedrooms can be rented. STRs are prohibited in certain multi-family buildings where homeowner associations or condo boards have banned them, and the county maintains a registry of approved properties. Recent enforcement has increased with fines up to $500 per violation for unregistered properties, and platforms like Airbnb are required to collect and remit taxes directly to Arlington County as of 2020.

Pentagon City offers excellent Airbnb investment opportunities primarily in the Crystal City-Pentagon City corridor, particularly near the Pentagon City Metro station and Crystal Drive area, which attracts significant business travelers due to proximity to the Pentagon, Amazon HQ2 (arriving 2023-2025), and numerous defense contractors like Booz Allen Hamilton and Raytheon. The Rosslyn-Ballston corridor extension into Pentagon City is highly desirable for corporate housing needs, with companies like Accenture and Deloitte maintaining major offices nearby. The area around Army Navy Drive and South Hayes Street benefits from consistent demand from Pentagon employees, military personnel on temporary assignments, and visitors to Arlington National Cemetery. The Crystal City neighborhood specifically has seen increased investment since Amazon's HQ2 announcement, driving up both tourism and extended-stay business travel. Properties within walking distance of the Pentagon City Mall and Metro stations command premium rates due to convenience for both leisure travelers visiting DC attractions and business travelers needing easy airport access via Metro to Reagan National Airport, which is just one stop away.

Airbnb properties in Pentagon City, Virginia are subject to multiple lodging taxes including Virginia's state transient occupancy tax of 5.3% and Arlington County's local transient occupancy tax of 6.75%, totaling 12.05% in combined lodging taxes. These taxes apply to stays of less than 30 consecutive days and are typically collected by Airbnb directly from guests at the time of booking through their tax collection service, which began around 2019-2020 for Virginia jurisdictions. Airbnb remits the collected taxes quarterly to the Virginia Department of Taxation and Arlington County on behalf of hosts, though hosts must still register with local tax authorities and may need to file returns even when Airbnb collects the taxes. Properties rented for 30 days or longer are generally exempt from transient occupancy taxes, and certain government employees or long-term medical patients may qualify for exemptions with proper documentation. Additionally, standard Virginia sales tax of 5.3% plus Arlington County's 0.7% local sales tax may apply to the lodging charges, bringing the total tax burden to approximately 18.05% for short-term rental stays.

Starting an Airbnb in Pentagon City, Virginia requires approximately $650,000-$750,000 in total initial investment. Property purchase costs average $580,000-$650,000 for a median 1-2 bedroom condo suitable for short-term rentals in this high-demand area near Washington DC. Furnishing costs range $15,000-$25,000 for quality furniture, bedding, kitchen essentials, and decor to create an attractive rental space. Initial setup expenses include $2,000-$3,500 for professional photography, listing creation, smart locks, and technology upgrades. Permits and fees total approximately $500-$1,200, including Arlington County business license, transient occupancy tax registration, and HOA approval if applicable. Insurance costs $1,500-$2,500 annually for short-term rental coverage beyond standard homeowner's insurance. Utility setup and deposits require $500-$800 for electricity, gas, water, internet, and cable services. First six months of operating costs average $8,000-$12,000, covering utilities ($200-$300/month), cleaning services ($75-$100 per turnover), supplies and maintenance ($150-$250/month), platform fees (3% of bookings), and marketing expenses, assuming 60-70% occupancy rates typical for Pentagon City's strong business and tourist market.

Airbnb properties in Pentagon City, Virginia demonstrate strong profitability potential due to the area's proximity to Washington D.C., the Pentagon, and Reagan National Airport, with average daily rates ranging from $120-180 for one-bedroom units and $180-250 for two-bedroom apartments. Properties typically achieve 65-75% occupancy rates annually, generating gross revenues of $35,000-55,000 per year for well-managed units. Operating expenses including cleaning fees ($40-60 per turnover), utilities ($150-200 monthly), insurance ($1,200-1,800 annually), and platform fees (3% Airbnb + 14-16% guest fees) typically consume 40-50% of gross revenue. Net profit margins generally range from 25-35% after expenses, with successful hosts like those managing furnished corporate housing near Crystal City reporting annual profits of $15,000-25,000 per unit. Key success factors include professional photography, rapid guest communication, strategic pricing during peak government and business travel periods, and maintaining properties that cater to business travelers seeking extended stays. Properties within walking distance of Metro stations, particularly Crystal City and Pentagon City stops, command premium rates and achieve higher occupancy due to convenience for government contractors, consultants, and tourists visiting the nation's capital.

Airbnb investments in Pentagon City, Virginia typically generate annual ROI of 12-18% due to the area's proximity to Washington D.C., the Pentagon, and Reagan National Airport, with cash-on-cash returns ranging from 8-14% depending on property type and financing structure. One-bedroom condos in high-rise buildings like those near Pentagon Row or Crystal City can achieve 15-20% annual returns, while larger units may see 10-15% returns with higher absolute cash flows. The timeframe to profitability is generally 6-12 months, with break-even occurring faster for properties under $400,000 due to lower carrying costs and strong demand from business travelers, government contractors, and tourists visiting the D.C. metro area. Properties within walking distance of the Pentagon City Metro station command premium nightly rates of $120-180, contributing to gross rental yields of 8-12% before expenses, while factoring in occupancy rates of 70-85% and operating expenses of 25-35% of gross income.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Pentagon City, Virginia, providing market analysis and investment insights. Local real estate agents specializing in Airbnb investments in the area include Keller Williams Capital Properties agents who focus on investment properties, Long & Foster agents with short-term rental expertise, and Compass agents specializing in Pentagon City condominiums. National services include Mashvisor for property analysis and market data, AirDNA for short-term rental analytics, Awning for turnkey Airbnb investments, RedAwning for vacation rental property sourcing, and Vacasa which offers property management and acquisition services. Local property management companies that also help with acquisitions include AvantStay, which manages high-end properties in the DC metro area, and several boutique firms like Capital City Stays and DC Metro Short Term Rentals that provide both management and investment consulting services for the Pentagon City market, leveraging its proximity to Reagan National Airport and downtown DC to maximize rental yields.