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 in the Tacoma/Olympia market area is 73%. average monthly revenue in the Tacoma/Olympia market area is $3,834. average daily rate in the Tacoma/Olympia market area is $205. the top operator in the Tacoma/Olympia market area is Evolve with 103 listings. market score is 61/100 (grade C).
Market data reflects the Tacoma/Olympia regional market, which includes Federal Way. Regulations, taxes, and permit details below are specific to Federal Way.
Market Score Breakdown
Five dimensions StaySTRA 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 |
|---|---|
| Jan | 55% |
| Feb | 61% |
| Mar | 62% |
| Apr | 62% |
| May | 67% |
| Jun | 75% |
| Jul | 77% |
| Aug | 75% |
| Sep | 67% |
| Oct | 59% |
| Nov | 58% |
| Dec | 59% |
Month-by-month nightly rates and revenue figures for Federal Way are available to StaySTRA Pro members. Unlock with StaySTRA Pro or analyze a specific address free.
Top Short-Term Rental Operators in Tacoma/Olympia market area
Ranked by total active listings. Useful for understanding the competitive landscape. Operator data is published for the Tacoma/Olympia market as a whole, which includes Federal Way, so these counts are not Federal Way-only figures.
| # | 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 nightly-rate breakdowns by bedroom count, property tier, and dwelling type for Federal Way are available to StaySTRA Pro members. Unlock with StaySTRA Pro or analyze a specific address free.
Booking Channel Mix
Distribution of bookings across major STR platforms.
| Channel | Share |
|---|---|
| airbnb | 58.3% |
| vrbo | 4.2% |
| both | 37.5% |
Home Value Trends (Federal Way)
Typical home values, median sale prices, and the 10-year price trend for Federal Way are available to StaySTRA Pro members. Unlock with StaySTRA Pro or analyze a specific address free.
Booking Insights
Booking-window and length-of-stay analysis for Federal Way — how far ahead guests book and how to price around it — is available to StaySTRA Pro members. Unlock with StaySTRA Pro or analyze a specific address free.
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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