Airbnb vs Long-Term Rental Seattle 2025: Which Strategy Makes More Money?
The Bottom Line up Front
Short-term rentals in Seattle outperform long-term rentals by $10,000–$30,000+ per year when operated professionally. But they require more capital, compliance, and hospitality-level execution. Long-term rentals offer predictable income with less effort but limited upside under Washington’s 2025 rent stabilization laws. The best path depends on your property, capital, and willingness to treat it as a hospitality business.
Seattle Rental Market Overview (2025)
Long-Term Rentals
Seattle’s median rent in mid-2025 is about $2,115 across all units.
- 1-bedroom average: $1,973/month
- 2-bedroom average: $2,463/month
(Source: ApartmentList, July 2025)
Rent stabilization introduced in 2025 caps annual increases around 3–4%. That limits long-term upside even as costs rise.
Short-Term Rentals (Airbnb & VRBO)
According to AirDNA and Airbtics, Seattle’s short-term rentals average:
- Average Daily Rate (ADR): $157
- Occupancy: 72%
- Monthly revenue: ~$3,300
- Annual revenue: $39,000–$60,000, depending on property size and location
Top-quartile listings (professionally managed homes in Ballard, Queen Anne, Capitol Hill) regularly exceed $80,000–$90,000 per year.
Compliance Snapshot
Seattle requires:
- Business License Tax Certificate
- Short-Term Rental Operator License (one per property)
- RRIO registration for non-primary residences
Most hosts can operate only two STR units—their primary home and one additional. Violations risk fines and delisting.
Recreation helps with all licensing and compliance for owners, ensuring legal operation and ongoing adherence to local regulations.
The True Cost Picture
| Expense Category | Airbnb / STR | Long-Term Rental |
|---|---|---|
| Platform Fees | 3–15% | None |
| Cleaning & Turnover | $150–$300 per stay | Tenant-paid |
| Utilities | $150–$300/month | Usually tenant-paid |
| Maintenance & Repairs | 5–8% of revenue | 3–5% |
| Insurance | $1,000–$2,500/year (STR policy) | $700–$1,200/year |
| Furnishing (one-time) | $8,000–$60,000+ | Minimal |
| Management Fee | 15–25% | 8–10% or self-managed |
Result: STRs carry higher operating costs and upfront capital but produce stronger cash-on-cash returns once stabilized.
Example 1: Two-Bedroom Condo in Ballard
| Metric | Airbnb / STR | Long-Term Rental |
|---|---|---|
| ADR | $170 | N/A |
| Occupancy | 72% | 95% |
| Annual Gross Revenue | $44,700 | $32,400 |
| Variable Costs | –$20,100 | –$1,600 (vacancy) |
| Net Income (before debt) | $24,600 | $30,800 |
| One-Time Furnishing | –$12,000 | N/A |
| Year 1 Net | $12,600 | $30,800 |
| Year 3 Net (avg) | $25,000+/year | $33,000/year (capped) |
| 5-Year Total (after furnishing) | ≈ $185,000 | ≈ $165,000 |
Once furnishing is recovered, STR outpaces LTR by ~$20,000+ over five years. Dynamic pricing and professional management widen that gap further.
Example 2: Three-Bedroom Home in Queen Anne
| Metric | Airbnb / STR | Long-Term Rental |
|---|---|---|
| ADR | $300 | N/A |
| Occupancy | 70% | 95% |
| Annual Gross Revenue | $76,800 | $45,600 |
| Variable Costs | –$36,900 | –$2,300 (vacancy) |
| Net Income (before debt) | $39,900 | $43,300 |
| One-Time Furnishing | –$20,000 | N/A |
| Year 1 Net | $19,900 | $43,300 |
| Year 3 Net (avg) | $41,500/year | $47,000/year |
| 5-Year Total (after furnishing) | ≈ $270,000 | ≈ $235,000 |
The short-term model overtakes by year 3, driven by higher seasonal rates and pricing flexibility.
Seasonality & Cash Flow Planning
- Peak (June–September): 80–90% occupancy, ADR +25%
- Shoulder (April–May, October): 70–75% occupancy
- Winter (Nov–Mar): 55–65% occupancy, ADR –10–15%
Keep 2–3 months of reserves to smooth seasonality. Professional management mitigates swings through longer stays, flexible minimums, and multi-platform distribution.
When Airbnb Makes More Sense
✅ Your property is in a high-demand area (Ballard, Queen Anne, Capitol Hill, Fremont, South Lake Union).
✅ You can invest $10K–$40K in professional furnishing and presentation.
✅ You prefer higher long-term ROI over minimal effort.
✅ You have (or hire) professional management to handle compliance, guest care, and pricing.
When Long-Term Rental Makes More Sens
✅ You want predictable, low-touch income.
✅ Your property lacks strong visitor demand or design appeal.
✅ HOA or zoning limits STR use.
✅ You can’t commit to ongoing management or furnishing investment.
Why Professional Management Changes the Math
Top-quartile operators in Seattle outperform the median by 15–25% in both ADR and occupancy.
Recreation delivers that through:
- Dynamic, real-time pricing and revenue optimization
- 24/7 guest communication and maintenance response
- Full regulatory compliance and tax handling
- Design-level furnishing and professional photography
- Transparent owner reporting and monthly commentary
A well-run property under Recreation can earn 10–20% more net income than an independent host—often offsetting the management fee entirely.
Seattle Airbnb Profitability Snapshot (2025)
| Property Type | Avg ADR | Occupancy | Annual Gross | Est. Net (After Costs) |
|---|---|---|---|---|
| 1-Bedroom | $160 | 73% | $42K | $22K–$25K |
| 2-Bedroom | $185 | 71% | $48K | $26K–$30K |
| 3-Bedroom | $300 | 70% | $77K | $40K–$45K |
| 4-5 Bedroom Luxury | $500+ | 65% | $120K+ | $60K+ |
(Sources: AirDNA, Airbtics, Recreation internal data, July 2025)
Conclusion
Both strategies can work—but short-term rentals win when managed professionally and furnished to hospitality standards. Long-term rentals still suit owners seeking simplicity, but rent caps now limit growth.
Seattle’s evolving laws and visitor demand make STRs an attractive, higher-yield path for owners who approach them like a business, not a side hustle.
You shouldn’t feel locked into your management company.
With Recreation Stays, there are no long-term contracts—and our Recreation Guarantee means we only win when you do.
Explore our Seattle Airbnb Management and Pricing & Services pages to see how it works.
Curious how much your property could earn?
Use our Rental Income Calculator for an instant estimate, or request a consultation for a personalized profitability analysis.
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