Federal Way, Washington Short-Term Rental Market
Federal Way, WA STRs averaged $149/night at 57.2% occupancy in April 2026, serving a King County market between Seattle and Tacoma.
Quick Answer: Federal Way, Washington is an active short-term rental market. average occupancy is 57%. average monthly revenue is $2,329. average daily rate is $149. the top operator is Evolve with 103 listings. market score is 61/100 (grade C).
Market Score Breakdown
Five dimensions Apivex evaluates per market.
Market Overview
Federal Way, WA is a King County suburb situated between Seattle and Tacoma, drawing approximately one million visitors annually according to the city. The STR market is sustained by a combination of regional leisure demand, sports competition events, and overflow accommodation from the Seattle-Tacoma airport corridor. As of April 2026, the market recorded an average daily rate of $149 and an occupancy rate of 57.2%, producing a RevPAR of $85. Year-over-year, ADR rose 3.6% but occupancy dipped 0.5%, resulting in essentially flat revenue (-0.2%).
Investors should note a material demand risk: Wild Waves Theme and Water Park, the city’s largest tourist attraction and Washington’s largest theme and water park, announced in December 2025 that it will close permanently on November 1, 2026. This closure will reduce a meaningful component of the area’s seasonal leisure demand beginning in 2027.
The active listing base spans approximately 3,789 properties. Entire-place rentals account for 3,034 listings (80% of total), with private rooms at 750 and shared rooms at 5. Airbnb-exclusive listings number 2,209, dual-channel properties total 1,420, and VRBO-only listings account for 160. By bedroom count, one-bedroom units lead at 1,733, followed by two-bedroom (830), three-bedroom (704), four-bedroom (353), and five-bedroom (167) properties. The composite market score is 60.8 out of 100, with rental demand (82.3) the strongest sub-score.
Seasonal Patterns
| Month | Occupancy | ADR | Revenue |
|---|---|---|---|
| Jan | 55% | $121 | $1,888 |
| Feb | 61% | $128 | $1,935 |
| Mar | 62% | $125 | $2,139 |
| Apr | 62% | $123 | $2,077 |
| May | 68% | $131 | $2,336 |
| Jun | 75% | $149 | $2,837 |
| Jul | 77% | $161 | $3,344 |
| Aug | 75% | $160 | $3,299 |
| Sep | 67% | $144 | $2,608 |
| Oct | 59% | $126 | $2,107 |
| Nov | 58% | $127 | $1,947 |
| Dec | 59% | $131 | $2,130 |
Top Short-Term Rental Operators in Federal Way
Ranked by total active listings. Useful for understanding the competitive landscape.
| # | Operator | Listings | Reviews | Rating |
|---|---|---|---|---|
| 1 | Evolve | 103 | 4,812 | ★ 4.73 |
| 2 | Vacasa | 65 | 2,033 | ★ 4.63 |
| 3 | Amera Property Management | 25 | 641 | ★ 4.89 |
| 4 | Tip Top Management | 19 | 2,260 | ★ 4.87 |
| 5 | Blizzard Realty | 13 | 228 | ★ 4.75 |
What Kind of STR Should I Buy in Federal Way?
Revenue and pricing by property type, tier, and bedroom count.
Revenue by Bedroom Count
| 1 bed | 1,733 |
| 2 bed | 830 |
| 3 bed | 704 |
| 4 bed | 353 |
| 5 bed | 167 |
ADR by Property Tier
| Entire Home | $170 |
| Luxury | $245 |
| Professionally Managed | $192 |
Revenue by Dwelling Type
| Apartment | $2,112 |
| Entire Place | $2,633 |
| House | $2,426 |
Booking Channel Mix
Distribution of bookings across major STR platforms.
| Channel | Share |
|---|---|
| airbnb | 58.3% |
| vrbo | 4.2% |
| both | 37.5% |
Investment Analysis
Federal Way’s STR investment picture is shaped by solid metro demand fundamentals and a moderate regulatory burden, offset by the impending loss of the Wild Waves attraction and the absence of a strong leisure destination anchor beyond regional parks and sports venues. Housing price data is not available in the database for this area, which limits gross yield calculations; investors should obtain current home pricing from a local broker or Zillow before underwriting.
Revenue data for April 2026 is clear: monthly average revenue was $2,329. Annualizing that figure yields approximately $27,948 in gross revenue. The 2025 full-year average was $2,837/month, above the April 2026 point, consistent with April being a lower-revenue seasonal month. The 2025 figure also benefited from Wild Waves’ full operating season.
Tier comparisons show meaningful premiums at higher property grades. The all-listings ADR was $149/night. Entire-home listings averaged $170/night (14% premium). Professionally managed properties averaged $192/night (29% premium). Luxury-tier properties averaged $245/night (64% premium). Revenue by property type: entire-place listings averaged $2,633/month, houses averaged $2,426/month, and apartments averaged $2,112/month as of April 2026.
The investability score of 55.5 out of 100 is relatively low compared to other Seattle-area markets, reflecting the moderate demand profile, flat revenue growth, and the upcoming Wild Waves closure. The rental demand score of 82.3 confirms that near-term demand remains solid but the outlook beyond 2026 carries elevated uncertainty.
Revenue Trend (5 yr)
ADR & Occupancy Trends (5 yr)
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Guests in Federal Way book an average of 33 days in advance, a moderate lead time consistent with a regional leisure and sports competition market. Drive-market visitors from the greater Puget Sound area often plan trips with three to five weeks of lead time, while sports competition attendees may book further in advance once competition dates are confirmed.
Average length of stay is 4.7 nights, longer than many weekend-only leisure markets. This likely reflects a mix of extended summer getaways from Seattle and Tacoma, multi-day sports competition visits to the King County Aquatic Center, and guests using Federal Way as a lower-cost base for exploring the broader Puget Sound region.
The 4.7-night average stay reduces turnover frequency and cleaning costs per occupied night. The 33-day booking window gives operators reasonable advance visibility for pricing decisions, particularly for summer weekends and major aquatic competition events. Operators should monitor King County Aquatic Center event calendars and apply premium pricing around national and regional swim meets, which can generate concentrated demand.
Short-Term Rental Regulations
Federal Way, WA permits short-term rentals and layers both state and local requirements on operators. Under Washington’s statewide STR law (RCW 64.37), operators must carry at least $1 million in liability insurance (or operate through a platform that provides it), provide guest contact information, meet consumer-safety and carbon monoxide alarm requirements, and remit all applicable taxes.
Locally, operators must obtain a Federal Way business registration (approximately $67 per year for a single-family home; higher fees apply to multi-unit operations) and comply with the city’s home-occupation rules under Federal Way Revised Code Chapter 19.270. The applicable lodging tax is approximately 11.3%: a 6.5% Washington state retail sales tax, approximately 3.8% local component, and a special hotel/motel lodging tax of approximately 1% for stays under 30 days. Additional King County tourism or convention charges may apply on some bookings.
The city does not impose an owner-occupancy or primary-residence requirement, nor a maximum annual night cap, making it more permissive than Seattle in these respects. Enforcement is rated moderate. Investors should confirm current license fees and any quarterly lodging-tax filing requirements with the Community Development Department (253-835-7690) and the Washington Department of Revenue.
Market Comparison
Federal Way’s April 2026 occupancy of 57.2% is approximately in line with the U.S. STR median of approximately 55%. The $149 ADR is below the U.S. median of approximately $220, consistent with the market’s suburban positioning between two major metros without a premium destination anchor. Year-over-year revenue was essentially flat at -0.2%, underperforming most growing STR markets.
Compared to other Seattle-area markets such as Capitol Hill or Bellevue, Federal Way offers lower entry barriers but also lower nightly rates and a less defined tourism identity. The regulation score of 65.0 reflects a manageable compliance environment that is notably more permissive than Seattle’s. The investability score of 55.5 is the lowest among the five areas processed in this batch, reflecting the combination of flat revenue trends and the upcoming Wild Waves closure.
The top operators are Evolve (103 listings, 4.73 rating, 4,812 reviews) and Vacasa (65 listings, 4.63 rating). Amera Property Management operates 25 listings at a 4.89 rating, and Tip Top Management holds 19 listings with 2,260 reviews at a 4.87 rating. The top five operators collectively manage 225 listings, approximately 6% of the active market.
Frequently Asked Questions About Federal Way, Washington
What is the average Airbnb occupancy rate in Federal Way, WA?
How much do Airbnb hosts earn per month in Federal Way, WA?
Will Wild Waves closing affect Federal Way Airbnb demand?
Do I need a permit to run a short-term rental in Federal Way, WA?
When is peak STR season in Federal Way, WA?
Who are the top Airbnb property managers in Federal Way, WA?
Is Federal Way, WA a good STR investment market?
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