Tacoma, Washington Short-Term Rental Market Analysis
Tacoma, located in Pierce County, Washington, serves as a significant economic and cultural hub within the Pacific Northwest. The city has gained attention over the past several years for its revitalization efforts, including improving public spaces, enhancing infrastructure, and fostering a growing arts scene. The short-term rental (STR) market has reflected this progress, as visitors seek accommodations that offer flexibility and unique experiences. Given Tacoma's proximity to Seattle, it's increasingly viewed as a more affordable alternative for both tourists and business travelers.
Table of Contents
- Market Overview
- Key Performance Indicators
- 10-Year Growth Analysis
- Investment Potential & ROI
- Seasonal Market Patterns
- Property Type Performance
- Guest Preferences & Amenities
- Regulatory Environment
- Neighborhood Analysis
- Market Outlook & Trends
- Frequently Asked Questions
Market Overview
Key Performance Indicators
Short-term rental success can often be gauged through various performance indicators. As of October 2023, the average daily rate (ADR) in Tacoma is $171.27, reflecting a healthy demand for STRs. Here are some key performance indicators to consider:
- Occupancy Rate: Achieving an occupancy rate near 70% is considered strong in the short-term rental market.
- Revenue Per Available Room (RevPAR): Calculated as the product of ADR and occupancy rate, Tacoma’s RevPAR is estimated at approximately $119.89 based on current ADR and a typical occupancy rate.
- Length of Stay: The average length of stay varies but typically hovers around 3-4 nights.
Tacoma, Washington Short-Term Rental Market Overview
Visitor Profile
Tacoma, Washington, attracts approximately 1.5 million annual visitors, contributing significantly to the local economy. The primary demographics of these visitors include a diverse mix of ages, with a notable concentration of travelers aged 25-44, who represent around 35% of the total visitor population. Many visitors come for leisure purposes, including exploring the city’s vibrant arts scene, visiting museums, and enjoying outdoor activities. Tacoma’s tourism generates an estimated economic impact of over $200 million annually, highlighting the importance of this sector to the local economy.
In-depth visitor analysis reveals that Tacoma’s annual visitor numbers have remained stable, with a slight increase of about 3% over the past few years. The primary demographics show that families and young professionals are the most common visitors, often drawn by the city’s cultural attractions such as the Museum of Glass and Point Defiance Park. The average length of stay for visitors is around 2.5 nights, with peak seasons occurring during the summer months, particularly from June to August. According to the Tacoma Regional Convention + Visitor Bureau, events like the Tacoma Art Walk and the Daffodil Festival significantly boost visitor numbers during these peak times. The visitor statistics report indicates that the city’s unique blend of urban and natural attractions continues to appeal to a wide array of travelers, making Tacoma a growing destination in the Pacific Northwest. For more detailed insights, visit the Tacoma Regional Convention + Visitor Bureau at https://www.trcvb.com.
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Top Attractions
Tacoma, Washington, is a vibrant city nestled between the stunning Mount Rainier and the sparkling Puget Sound, offering a diverse array of attractions that cater to all interests. Known for its rich cultural heritage and artistic flair, Tacoma is home to the renowned Museum of Glass, where visitors can marvel at stunning glass art and live demonstrations. The Point Defiance Zoo & Aquarium provides an exciting experience for families, showcasing a variety of wildlife and marine life. With its beautiful parks, engaging museums, and unique attractions, Tacoma promises a memorable adventure for everyone. Whether you’re an art enthusiast, a nature lover, or a history buff, Tacoma has something special waiting for you.
One of Tacoma’s standout attractions is the Museum of Glass, a must-visit for art lovers. This contemporary art museum features an impressive collection of glass art and hosts live glassblowing demonstrations, allowing visitors to witness the artistry in action. For more information, visit the official website at https://museumofglass.org. Another gem is the Point Defiance Zoo & Aquarium, which combines a zoo and an aquarium, offering an immersive experience with over 9,000 animals and marine species. Families will enjoy the interactive exhibits and beautiful outdoor spaces. Learn more at https://www.pdza.org. Additionally, the Washington State History Museum provides a deep dive into the state’s past, showcasing fascinating exhibits that highlight the region’s history and culture. Discover more at https://www.washingtonhistory.org. Lastly, don’t miss the scenic Point Defiance Park, where you can explore lush trails, stunning views, and the beautiful waterfront. With so much to explore, Tacoma attractions offer endless opportunities for discovery and enjoyment.
Regulations
Tacoma short-term rental regulations are essential for property owners looking to navigate the local landscape of short-term rentals. In Tacoma, all short-term rental operators must obtain a business license and a short-term rental permit. This process ensures compliance with local zoning laws and safety standards. Additionally, property owners are required to collect and remit a 2% lodging tax on all short-term rental transactions. Understanding these regulations is crucial to avoid penalties, which can include fines and the revocation of rental permits. For those interested in operating a short-term rental in Tacoma, it is vital to familiarize yourself with the specific requirements and restrictions that apply to your property type.
Key regulatory information for Tacoma short-term rentals includes several important requirements. First, to operate legally, property owners must apply for a short-term rental permit through the City of Tacoma. This permit is contingent upon meeting zoning regulations, which dictate where short-term rentals can be located. Safety requirements are also enforced, including smoke detectors and carbon monoxide alarms. Furthermore, property owners must adhere to occupancy limits based on the size of the rental unit. Violations of these regulations can lead to significant penalties, including fines up to $1,000 per violation. For more detailed information on Tacoma’s short-term rental regulations, visit the City of Tacoma’s official website (https://www.cityoftacoma.org) and review the municipal code (https://library.municode.com/wa/tacoma/codes/code_of_ordinances).
Vacation Rental Market Overview for Tacoma
Tacoma attracts visitors with its urban amenities and entertainment and family-friendly attractions. The short-term rental market here serves diverse traveler demographics, from business professionals to family vacationers.
This destination’s rental market offers unique opportunities for property investors, with comprehensive data revealing seasonal patterns and demand drivers.
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Tacoma, Washington Market Performance Trends
Short-Term Rental Market Performance Analysis for Tacoma
The short-term rental market in Tacoma demonstrates dynamic pricing patterns and occupancy trends that savvy property investors and managers monitor closely. This comprehensive 12-month analysis reveals seasonal variations and revenue optimization opportunities.
Market Trend Summary
Current market indicators show: emerging growth market with increasing demand
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Tacoma, Washington Rental Market Insights
10-Year Market Growth
Booking Activity
- 1-3 Months:58.1% Booked
- 4-6 Months:55.9% Booked
- 7-9 Months:49.9% Booked
- 10-12 Months:16.7% Booked
Cancellation Policies
- Flexible:35.6%
- Moderate:37.4%
- Strict:25.5%
- Super Strict:25.5%
- N/A:1%
Minimum Stay
- 1 Day:335
- 2 Days:294
- 3 Days:97
- 4-6 Days:66
- 7-29 Days:90
- 30+ Days:83
Short-Term Rental Regulations and Booking Patterns in Tacoma
Tacoma vacation rental operators navigate specific local regulations and booking patterns that shape market dynamics. Understanding minimum stay requirements, cancellation policies, and booking windows is essential for successful property management.
Market analysis reveals seasonal policy variations maximizing revenue. These insights help property managers optimize their listing strategies and maximize occupancy.
Local regulations and platform policies influence rental operations. StaySTRA provides comprehensive policy tracking and compliance insights.
Tacoma, Washington Housing Market Data
Home Value Trends
Market Overview
- Typical Home Value:$487,907
- Median Sale Price:$490,000
- Median List Price:$503,316
Current Inventory
- Homes For Sale:710
- New Listings:274
Detailed Market Analysis
Real Estate Market Analysis for Tacoma, Washington
The residential real estate market in Tacoma, Washington presents unique opportunities for investors and homebuyers alike. Current market dynamics show steady growth patterns in an established market with inventory levels and pricing trends that reflect broader economic conditions and local demand factors.
Key Market Factors
Important considerations for this market include: growing population trends, economic development, and lifestyle amenities These factors contribute to the overall market performance and future growth potential.
Real estate investments in Tacoma, Washington benefit from consistent market appreciation and strong resale values. Prospective buyers and investors should consider both current market conditions and long-term growth indicators when evaluating opportunities in this market.
Tacoma, Washington Rental Market Composition
Entire Place by Beds
Common Rental Amenities
Vacation Rental Property Types in Tacoma
The vacation rental market in Tacoma features a diverse mix of property types, from cozy studios to spacious family homes. Understanding the property composition helps investors identify market gaps and opportunities.
Market characteristics include diverse property sizes from studios to large homes. This distribution reflects local demand patterns and traveler preferences.
Premium amenities and guest ratings play a crucial role in rental performance, with data showing clear correlations between specific features and booking rates.
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Get Your Free Property Analysis →These indicators suggest that Tacoma's STR market is performing well, and there is potential for continued growth.
10-Year Growth Analysis
Over the past decade, Tacoma has experienced considerable growth, both economically and demographically. From 2013 to 2023, the city's population has increased by about 7%, and with it, the demand for short-term rentals has grown. Factors contributing to this growth include:
- Economic Development: Investments in local businesses, construction projects, and tourism-related infrastructure have enhanced Tacoma's appeal. The city has witnessed the arrival of tech companies and other industries, providing a stable economic foundation.
- Cultural Attractions: Museums, theaters, waterfront parks, and a burgeoning dining scene have made Tacoma a draw for visitors, contributing to STR demand.
- Transportation: Easy access via Interstate 5, the Sounder commuter train, and proximity to Seattle-Tacoma International Airport enhances Tacoma's attractiveness as a travel destination.
This growth trend has created a fertile environment for short-term rental investments, which, aligning with increasing property value appreciation, indicates long-term viability.
Investment Potential & ROI
Investment potential in Tacoma's short-term rental market looks promising. On the surface, the numbers corroborate this assertion:
- Initial Investment: While property prices can vary, the average price for a 3-bedroom house is approximately $450,000.
- Projected Annual Income: Based on the current ADR and an estimated occupancy rate, STRs could generate gross annual income of around $28,000 to $40,000 depending on rental strategy and management.
- ROI: Considering the average expenses associated with short-term rentals, investors can expect a return on investment near 10-12% annually based on occupancy and pricing strategies.
These factors establish Tacoma as a sound market for STR investors, especially those looking for stable cash flow with manageable risks.
Seasonal Market Patterns
Understanding seasonal patterns is essential for optimizing revenue in the STR market. In Tacoma, the STR market typically sees fluctuations throughout the year:
- Peak Season (Summer): June to August sees the highest occupancy rates due to favorable weather, outdoor events, and tourism. ADR tends to peak during this period.
- Shoulder Season (Spring & Fall): March to May and September to November serve as transitional periods. Occupancy rates remain decent but may be slightly lower, so pricing strategies often require adjustments.
- Off-Peak Season (Winter): December to February experiences the least demand, primarily attributed to holiday travel patterns and weather-related concerns.
Investors should prepare for these shifts by creating tailored pricing strategies and marketing campaigns that align with the evolving demand landscape.
Property Type Performance
When evaluating property types in Tacoma, the following categories are noteworthy:
- Single-Family Homes: These are the most common properties utilized for short-term rentals, attracting families and larger groups. Well-maintained homes in desirable neighborhoods perform well, especially with family-friendly amenities.
- Condos and Apartments: Popular among business travelers and couples, these property types offer lower entry points yet provide competitive occupancy and ADR.
- Unique Properties: Converted industrial spaces or historic homes may attract niche markets and can command higher rents. However, they may require more hands-on management due to maintenance concerns.
Overall, single-family homes dominate the market, but diversification into other property types can enhance potential income and occupancy.
Guest Preferences & Amenities
Understanding guest preferences is key for differentiation in the competitive Tacoma STR market. Insights reveal:
- Location: Proximity to cultural landmarks, dining, and public transportation options are top priorities for guests.
- Amenities: Key amenities include high-speed internet, parking, pet-friendliness, and outdoor spaces like decks and gardens. Offering unique experiences, such as local tour guides or curated city guides, also adds value.
- Health and Safety: Post-pandemic travel has contributed to a higher demand for stringent cleaning protocols, contactless check-in, and transparent communication about health and safety measures.
Equipping properties with the desired amenities and focusing on superb hosting experiences can significantly enhance guest satisfaction and retention.
Regulatory Environment
Navigating the regulatory landscape for short-term rentals in Tacoma is crucial for compliance and operational success. Tacoma has enacted specific guidelines governing short-term rentals, including:
- Registration: All STRs must be registered with the City of Tacoma. Failure to do so may result in fines.
- Licensing: Hosts must acquire a business license, which needs to be renewed periodically.
- Zoning: STRs are subject to zoning regulations that can limit or prohibit rentals in certain neighborhoods.
Staying up-to-date with local laws and legislation is pivotal, as regulations can frequently change in response to market conditions and community sentiments.
Neighborhood Analysis
Tacoma is home to a variety of neighborhoods that cater to different guest demographics:
- Downtown Tacoma: This area offers guests easy access to museums, parks, and nightlife. High occupancy rates and ADR make this a desirable location for short-term rentals.
- University Place: Proximity to educational institutions makes this area attractive to visiting families and university-related travelers.
- North End: Quiet residential areas that appeal to families and guests seeking park access and local dining experiences.
- Hilltop: Known for its vibrant arts scene, this neighborhood is appealing to younger crowd and arts enthusiasts.
Each neighborhood presents unique opportunities for short-term rental investors, and understanding local demographics can help tailor rental strategies effectively.
Market Outlook & Trends
As of late 2023, Tacoma's STR market shows resilience and adaptability. Notable trends include:
- Technological Integration: The adoption of technology in operations (such as booking platforms and property management systems) streamlines management and enhances guest experiences.
- Sustainability: Visitors are increasingly interested in eco-friendly properties. STRs that incorporate green practices can capture the attention of environmentally conscious travelers.
- Diverse Marketing Strategies: Advertisements catering to specific niches—families, couples, friends traveling together, business travelers—can prove effective. Online travel agencies continue to be critical for visibility.
Overall, the Tacoma STR market is developing positively, fostering optimism for continued growth in the coming years.
Frequently Asked Questions
Is Tacoma a good place for short-term rentals?
Yes, Tacoma has a growing STR market fueled by economic development, cultural attractions, and its proximity to Seattle.What is the average daily rate for STRs in Tacoma?
As of October 2023, the average daily rate (ADR) is $171.27.What neighborhoods are best for short-term rentals?
Popular neighborhoods include Downtown Tacoma, University Place, North End, and Hilltop.What legal requirements do I need to meet to operate a short-term rental?
Hosts must register their properties with the city, obtain a business license, and comply with local zoning regulations.What types of properties perform best in Tacoma?
Single-family homes tend to perform best, followed by condos and unique properties targeting niche markets.
