Is Port Townsend, Washington Good for Airbnb Investment?

To start an Airbnb in Port Townsend, Washington, begin by researching local regulations as the city requires short-term rental permits and has specific zoning restrictions limiting rentals primarily to commercial and mixed-use zones, with some residential areas allowing them under conditional use permits. Contact Port Townsend's Planning Department to obtain a Conditional Use Permit (approximately $500-800) and business license (around $50-100), ensuring compliance with the city's 2019 short-term rental ordinance that caps the number of permits and requires owner occupancy for some property types. Find a suitable property in approved zones, considering that Port Townsend's historic downtown and waterfront areas are most desirable for tourists visiting for the Victorian architecture, maritime activities, and arts scene. Furnish the space with quality amenities including WiFi, kitchen essentials, and local guidebooks, emphasizing the area's attractions like Fort Worden State Park, the Northwest Maritime Center, and ferry access to Whidbey Island. List your property on Airbnb and other platforms with professional photos highlighting Port Townsend's charm, setting competitive rates (typically $100-250/night depending on size and location), and create detailed descriptions mentioning proximity to galleries, restaurants, and outdoor activities. Manage the property by establishing cleaning protocols, coordinating with local cleaning services, responding promptly to guests, and maintaining compliance with city requirements including annual permit renewals, occupancy limits (typically 2 people per bedroom plus 2), and parking provisions, while collecting and remitting the required lodging taxes to both the city and state.

To identify profitable short-term rental properties in Port Townsend, Washington, focus on locations within walking distance of downtown's Victorian architecture, the waterfront, and ferry terminals, as these areas command premium rates of $150-300+ per night. Target properties with 2-4 bedrooms, water views, historic charm, parking, and outdoor spaces, as guests pay 20-40% more for Puget Sound or mountain views. Analyze pricing using AirDNA and Mashvisor to benchmark against the market average of $180-220 per night, while monitoring seasonal fluctuations where summer rates can double winter pricing. Research competition by studying the 200+ existing STRs through Airbnb and VRBO, identifying gaps in luxury amenities, pet-friendly options, or unique themes like maritime or Victorian decor. Utilize Port Townsend-specific resources including the Jefferson County planning department for zoning compliance, local STR permit requirements, the Port Townsend Chamber of Commerce for tourism data, and connect with property management companies like Olympic Property Group who understand the local market dynamics and can provide occupancy rate insights for different neighborhoods.

To obtain an Airbnb/STR permit in Port Townsend, Washington, you must apply through the City of Port Townsend Planning Department located at 250 Madison Street. Required documents include a completed short-term rental application, site plan showing parking and access, proof of property ownership or lease agreement, floor plan indicating maximum occupancy, waste management plan, and emergency contact information. The application fee is approximately $200-300 with an annual renewal fee of around $150. The process typically takes 4-6 weeks for review and approval. Port Townsend specific requirements include limiting occupancy to 2 people per bedroom plus 2 additional guests, providing adequate off-street parking (minimum 1 space per unit), maintaining a 24-hour local contact person within 30 minutes of the property, displaying the permit number in all advertisements, and ensuring compliance with residential zoning restrictions. Properties must also meet fire safety standards, have working smoke and carbon monoxide detectors, and maintain liability insurance of at least $1 million. The city requires annual inspections and limits the total number of STR permits issued citywide.

Short-term rentals (STRs) are legal in Port Townsend, Washington, but operate under specific regulations established by the city. As of recent years, Port Townsend requires STR operators to obtain a business license and comply with zoning restrictions, with STRs generally permitted in residential zones but subject to occupancy limits, parking requirements, and noise ordinances. The city has implemented registration requirements and may limit the total number of STR permits available, particularly in certain residential neighborhoods to preserve housing stock for long-term residents. Property owners must also comply with state and local tax obligations, including collecting and remitting lodging taxes. Recent legal changes have included stricter enforcement mechanisms and potential caps on STR density in specific areas, reflecting the city's effort to balance tourism revenue with community housing needs and neighborhood character preservation.

The best areas for Airbnb investment in Port Townsend, Washington include the Historic Downtown District, particularly near Water Street and the Victorian seaport area, which attracts tourists year-round for its maritime heritage, art galleries, shops, and proximity to the ferry terminal. The Uptown residential area offers excellent potential due to its historic Victorian homes, walkability to downtown attractions, and appeal to visitors seeking authentic period accommodations. The Point Hudson area is highly desirable for its marina access, RV park proximity, and appeal to boating enthusiasts and maritime tourists. Properties near Fort Worden State Park command premium rates due to the park's popularity for conferences, weddings, arts events, and the annual Centrum music and arts festivals that draw thousands of visitors. The Kah Tai Lagoon Nature Park vicinity attracts nature lovers and families, while areas near the Northwest Maritime Center benefit from educational tourism and sailing events. Bluff properties with water views of Puget Sound and the Olympic Mountains are particularly lucrative for luxury short-term rentals, appealing to couples and groups seeking scenic retreats within walking distance of downtown amenities.

Airbnb hosts in Port Townsend, Washington are subject to multiple lodging taxes including the Washington State sales tax of 6.5%, Jefferson County lodging tax of 2%, and Port Townsend city lodging tax of 2%, totaling approximately 10.5% in combined taxes on short-term rental stays under 30 days. The Washington State Department of Revenue requires hosts to register for a business license and collect state sales tax, which must be remitted monthly if collections exceed $1,200 annually or quarterly for smaller amounts. Jefferson County's lodging tax is collected by the county and supports tourism promotion, while Port Townsend's municipal lodging tax funds local tourism and infrastructure projects. Airbnb can collect and remit these taxes automatically for hosts who opt into their tax collection service, or hosts can handle collection and remittance independently by registering with the appropriate tax authorities. Exemptions typically apply to stays of 30 days or longer, which are considered long-term rentals rather than transient accommodations, and certain government or non-profit organization bookings may qualify for exemptions with proper documentation.

Starting an Airbnb in Port Townsend, Washington requires approximately $650,000-$750,000 in total initial investment. Property purchase costs around $550,000-$650,000 based on median home prices in this historic waterfront town. Furnishing a 2-3 bedroom property with quality furniture, appliances, linens, and decor runs $15,000-$25,000. Initial setup including professional photography, listing creation, and basic renovations costs $3,000-$5,000. Permits and fees include a business license ($100), short-term rental permit ($200-$500), and potential impact fees totaling $1,000-$2,000. Insurance for short-term rentals costs $2,000-$3,000 annually. Utility deposits and connections for electricity, water, sewer, internet, and cable run $500-$1,000. First six months operating costs including utilities ($300/month), cleaning services ($100 per turnover), supplies and maintenance ($200/month), property management software ($50/month), and marketing expenses total approximately $4,500-$6,000, assuming 60-70% occupancy rates typical for Port Townsend's seasonal tourism market.

Airbnb properties in Port Townsend, 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-$65,000 for well-managed properties with 60-70% occupancy rates. Operating expenses typically consume 40-50% of gross revenue, including cleaning fees ($75-$125 per turnover), property management (15-25%), utilities ($200-$400 monthly), insurance ($1,500-$3,000 annually), and maintenance costs, resulting in net profit margins of 25-35% for successful operators. Properties within walking distance of downtown or waterfront command premium rates, with Victorian-era homes and waterfront cottages performing exceptionally well due to Port Townsend's appeal as a historic maritime destination and arts community. Success factors include professional photography, responsive guest communication, strategic pricing during peak summer months and festival periods, and maintaining high cleanliness standards, with top-performing hosts like those operating restored historic properties near Fort Worden State Park achieving occupancy rates above 80% and annual profits exceeding $25,000. The market benefits from limited hotel inventory, strong tourism demand from Seattle-area visitors seeking weekend getaways, and the town's designation as a Victorian seaport and arts destination, though seasonality requires careful financial planning as winter occupancy can drop to 30-40%.

Airbnb investments in Port Townsend, Washington typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, based on the area's strong tourism appeal as a Victorian seaport town and gateway to Olympic National Park. Properties within walking distance of downtown and the waterfront command premium nightly rates of $150-250, while those further out average $100-180 per night, with occupancy rates of 65-75% during peak season (May-September) and 35-45% in winter months. Initial profitability usually occurs within 18-24 months for well-positioned properties, with investors typically requiring $80,000-150,000 down payment for suitable investment properties ranging from $400,000-750,000. The market benefits from consistent demand from Seattle-area visitors (90 minutes away), maritime festival attendees, and outdoor enthusiasts, though seasonal fluctuations and local short-term rental regulations requiring business licenses and compliance with zoning restrictions can impact returns. Properties with unique Victorian charm, water views, or proximity to Fort Worden State Park tend to achieve the higher end of ROI projections, while standard residential properties typically fall toward the lower range.

STRSearch is a national platform that helps investors identify profitable short-term rental properties including in Port Townsend, Washington. Local real estate agents specializing in investment properties include Windermere Real Estate Port Townsend, John L. Scott Real Estate, and Coldwell Banker Best Homes, with agents like those at Olympic Peninsula Properties having experience with vacation rental investments since 2018. National services include AirDNA for market analysis, Mashvisor for property analytics, and BiggerPockets for investor networking and deal sourcing. RedAwning and Vacasa provide property management services for Airbnb investments, while companies like RentSpree and Awning offer investment analysis tools. Local property management companies such as Port Townsend Property Management and Olympic Peninsula Vacation Rentals assist with operations, and mortgage brokers like First Federal and Kitsap Bank offer financing for investment properties. Real estate investment firms like HomeUnion and Roofstock occasionally feature Pacific Northwest properties, while local contractors and renovation specialists help optimize properties for short-term rental success.