Is Sequim, Washington Good for Airbnb Investment?

To start an Airbnb in Sequim, Washington, begin by researching local regulations through the City of Sequim Planning Department, as the city requires short-term rental permits and has specific zoning restrictions that typically limit rentals to certain residential areas with a maximum occupancy of 8 guests. Contact Sequim City Hall at 152 West Cedar Street to obtain the necessary business license (approximately $50-100) and short-term rental permit (estimated $200-300 annually), ensuring compliance with fire safety codes, parking requirements (typically 1 space per 2 guests), and noise ordinances. Find a suitable property in approved zones, considering Sequim's popular areas near the Olympic Discovery Trail or downtown, with properties ranging from $300,000-600,000 for typical rental homes. Furnish the space with quality linens, kitchen essentials, WiFi, and local touches highlighting Sequim's lavender farms and outdoor recreation opportunities, budgeting $10,000-20,000 for complete furnishing. List your property on Airbnb, VRBO, and other platforms with professional photos showcasing mountain and water views, emphasizing proximity to Olympic National Park and Hurricane Ridge. Manage bookings through property management software, maintain regular cleaning schedules, provide local recommendations for attractions like the Sequim Lavender Festival and Dungeness Spit, and ensure compliance with Washington State's 8.4% sales tax plus Clallam County's lodging tax of approximately 2%, while maintaining liability insurance coverage of at least $1 million.

To identify profitable short-term rental properties in Sequim, Washington, focus on locations within 10-15 minutes of Olympic National Park entrances, near the Dungeness Spit, or with views of the Olympic Mountains and Strait of Juan de Fuca, as these areas attract nature tourists and retirees seeking scenic getaways. Target properties with 2-4 bedrooms, outdoor spaces like decks or gardens, fireplaces, and modern amenities, as Sequim's appeal lies in its natural beauty and "rain shadow" climate with 300+ sunny days annually. Analyze pricing by researching comparable STRs on Airbnb and VRBO, noting that properties typically command $150-300 per night depending on size and location, with peak seasons during summer months and lavender festival periods. Study competition by examining occupancy rates and reviews of existing rentals, particularly those near popular attractions like the Sequim Lavender Festival venues, Olympic Game Farm, and hiking trailheads. Utilize tools like AirDNA for market analytics, STR Helper for performance tracking, and local resources including the Sequim Chamber of Commerce for tourism data, while monitoring Clallam County's STR regulations and permit requirements, and connecting with local property management companies like Olympic Property Group or Sequim Bay Properties for market insights and operational support.

To obtain an Airbnb/STR permit in Sequim, Washington, you must apply through the Clallam County Community Development Department since Sequim operates under county jurisdiction for short-term rental regulations. Submit your application to the Clallam County Courthouse at 223 E 4th Street, Port Angeles, WA 98362, or apply online through their permitting portal. Required documents include a completed short-term rental permit application, proof of property ownership or lease agreement with landlord consent, site plan showing parking and access, septic system approval if applicable, fire safety inspection certificate, and proof of liability insurance with minimum $1 million coverage. The application fee is approximately $500-750 with annual renewal fees of $200-300. You must also obtain a Washington State business license and register for state and local tax collection. The approval timeline typically takes 4-6 weeks after submitting a complete application. Sequim-specific requirements include maximum occupancy limits based on bedrooms and septic capacity, designated off-street parking spaces for guests, 24-hour local contact person, noise ordinance compliance, and adherence to residential zoning restrictions. Properties must pass health department inspection for water quality and septic systems, maintain guest registry records, and display permit numbers in all advertising. Some residential zones may prohibit STRs entirely, so verify zoning compatibility before applying.

Short-term rentals (STRs) are legal in Sequim, Washington, but operate under regulations established by both Clallam County and the City of Sequim. As of 2023, the City of Sequim 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. Properties must meet safety standards including smoke and carbon monoxide detectors, and operators must provide contact information for a responsible party available 24/7. Clallam County, which governs unincorporated areas around Sequim, has implemented similar regulations requiring permits and adherence to health and safety codes. Recent changes in 2022-2023 have included stricter enforcement mechanisms and increased penalties for violations, with both jurisdictions requiring STR operators to collect and remit applicable taxes. Some neighborhoods may have additional HOA restrictions, and properties in certain environmentally sensitive areas may face additional limitations, but there are no blanket prohibitions on STRs within Sequim city limits or the immediate surrounding county areas.

The best Airbnb investment areas in Sequim, Washington include the downtown historic district near Sequim Avenue, which attracts visitors to local shops, restaurants, and the annual Lavender Festival held each July, generating significant tourism revenue. The Bell Hill area offers elevated properties with mountain and water views that command premium rates from tourists visiting Olympic National Park and Hurricane Ridge. Properties near the Dungeness River and Dungeness National Wildlife Refuge area are highly desirable for nature enthusiasts and bird watchers, particularly during spring and fall migration seasons. The Carlsborg district, just west of downtown, provides good value investments with easy access to both Sequim amenities and Port Angeles ferry connections, attracting business travelers and tourists heading to Victoria, BC. Areas near Sequim Bay and the John Wayne Marina draw boating enthusiasts and water recreation visitors, especially during summer months when occupancy rates peak at 75-85% compared to the county average of 65%.

In Sequim, Washington, Airbnb hosts are subject to multiple lodging taxes including Washington State's 6.5% sales tax, a state lodging tax of 2%, and Clallam County's lodging tax of 2%, totaling approximately 10.5% in combined taxes on short-term rental accommodations. The City of Sequim does not impose an additional municipal lodging tax as of 2023. Washington State sales tax and lodging tax are collected through the Department of Revenue's Business Licensing Service, with hosts required to register for a business license and file monthly returns if gross income exceeds $28,000 annually, or quarterly if below that threshold. Clallam County's lodging tax is remitted separately to the county treasurer's office on a monthly basis by the 20th of the following month. 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. Exemptions typically apply to stays exceeding 30 consecutive days, which are generally not subject to lodging taxes, and certain government or charitable organization bookings may qualify for sales tax exemptions with proper documentation.

The total cost to start an Airbnb in Sequim, Washington is approximately $485,000-$565,000. Property purchase costs around $400,000-$475,000 based on median home prices in the area as of 2023-2024. Furnishing a 2-3 bedroom property ranges from $15,000-$25,000 including beds, linens, kitchen essentials, living room furniture, and decor. Initial setup costs including professional photography, listing creation, and basic marketing total $2,000-$3,500. Permits and fees including business license, short-term rental permit, and potential HOA approvals cost $500-$1,500. Insurance specifically for short-term rentals runs $2,000-$3,000 annually. Utilities setup and deposits for electricity, water, sewer, garbage, internet, and cable total $800-$1,200. First six months operating costs including utilities ($900/month), cleaning services ($150 per turnover averaging 8 turnovers monthly), supplies and maintenance ($300/month), platform fees (3% of estimated $3,500 monthly revenue), and property management software ($50/month) total approximately $12,000-$15,000. Additional considerations include potential property improvements or repairs ($5,000-$10,000) and working capital reserves for vacancy periods.

Airbnb properties in Sequim, Washington typically generate annual revenues between $25,000-$45,000 for well-positioned properties, with average daily rates ranging from $85-$150 depending on property size and amenities. Operating expenses generally consume 40-50% of gross revenue, including cleaning fees ($40-60 per turnover), property management (15-25% if outsourced), utilities ($150-250 monthly), insurance ($1,200-2,000 annually), and maintenance costs. Properties near Olympic National Park entrances or with water views command premium rates, with some luxury cabins achieving $200+ nightly rates during peak summer months (June-September). Success factors include proximity to outdoor recreation areas, unique property features like hot tubs or fire pits, professional photography, and responsive guest communication. A typical 2-bedroom property purchased for $400,000 might generate $35,000 gross revenue with $18,000 in expenses, yielding a 4.25% cash-on-cash return before mortgage payments. The market benefits from Sequim's reputation as a retirement destination and gateway to Olympic Peninsula attractions, though seasonality impacts winter occupancy rates which typically drop to 30-40% compared to 70-80% summer occupancy.

Airbnb investments in Sequim, Washington typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, driven by the area's proximity to Olympic National Park and appeal as a retirement destination. Properties in Sequim average $400,000-$600,000 purchase prices and can command $120-$180 per night during peak summer months (May-September) with occupancy rates of 65-75%, while winter months see rates drop to $80-$120 with 40-50% occupancy. Initial profitability usually occurs within 18-24 months after accounting for startup costs, furnishing, and marketing expenses of approximately $15,000-$25,000. The market benefits from consistent demand from retirees exploring the area, outdoor enthusiasts visiting the Olympic Peninsula, and seasonal tourists attracted to the region's lavender farms and rain shadow climate, with annual gross rental income typically ranging from $35,000-$55,000 for well-positioned properties.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Sequim, Washington, providing market analytics and investment insights. Local real estate agents specializing in Airbnb investments in the Sequim area include Windermere Real Estate agents like John L. Scott Sequim and Coldwell Banker Evergreen Olympic Realty, who understand the Olympic Peninsula vacation rental market. National services include Mashvisor, which offers rental property analysis tools, AirDNA for short-term rental market data, and Roofstock, which focuses on turnkey rental properties. Regional companies such as Pacific Northwest Property Management and Olympic Peninsula Vacation Rentals provide property management services for investors. Additionally, BiggerPockets connects investors with local experts, while companies like Awning and RedAwning offer vacation rental management and booking services. Local mortgage brokers familiar with investment properties include Olympic Peninsula Mortgage and Sequim lending specialists who understand the unique financing needs for short-term rental investments in this popular retirement and tourist destination near Olympic National Park.