Federal Way, WA Airbnb Market Data, Statistics, and Occupancy Rates

Federal Way Short-Term Rental Market Overview

Federal Way, WA is a compact short-term rental market with just 61 active Airbnb listings and an average annual revenue of $28,547 per property. With an ADR of $202—roughly half the Washington state average—and occupancy holding at 36%, the market offers more affordable entry points but demands careful property selection to generate meaningful returns. Larger homes in the 4- and 5-bedroom range substantially outperform smaller units, making property configuration a key lever for investors here.

Key Market Statistics

According to Rabbu market data, the Federal Way short-term rental market shows:

Data sources: Rabbu proprietary analytics as of Apr, 27 2026 and Zillow Home Value Index (ZHVI) as of Apr, 27 2026.

Why Investors Consider Federal Way

Federal Way attracts investor attention for its comparatively affordable home prices relative to the broader Seattle metro area, combined with meaningful revenue upside for larger, well-positioned properties.

Expert Market Assessment

"Federal Way presents a competitive but selective opportunity for STR investors. Revenue swings sharply by season—July peaks near $3,866 while January and February drop below $1,350—so cash-flow planning should account for four to five softer months. The market's 36% occupancy rate and below-average revenue-to-price ratio mean that not every property will pencil out; however, investors who target 4- or 5-bedroom homes can tap into substantially higher RevPAN ($127 and $124, respectively) and annual revenues that nearly double or triple the market average. With listing growth running at 98% year over year, competition is intensifying, but supply remains small at 61 total listings—leaving room for well-differentiated properties to capture share."

— Rabbu Market Analysis Team

Key Airbnb Metrics & Trends in Federal Way

Average revenue by month in Federal Way

Revenue in Federal Way follows a strong summer seasonal pattern, peaking in July at $3,866 and bottoming out in February at $1,310—a nearly 3x spread. Investors should plan for roughly five months (November–March) of below-average revenue and look to maximize rates during the June–August window when monthly earnings consistently exceed $3,400.

Active Airbnb listings by property size in Federal Way

One-bedroom units dominate supply with 23 of 61 listings (38%), while 5-bedroom homes are the scarcest at just 5 listings. The relatively thin supply of larger properties (4- and 5-bedrooms combined account for only 14 listings) could represent an opportunity, especially given their significantly higher revenue potential.

Average daily rate (ADR) by property size in Federal Way

ADR scales steeply with bedroom count, from $160 for 1-bedrooms to $373 for 5-bedroom properties—a 133% premium. The jump from 3-bedrooms ($207) to 4-bedrooms ($296) is the most dramatic step up, suggesting that 4-bedroom homes may offer the best balance of nightly rate premium versus acquisition cost.

Average RevPAN by property size in Federal Way

Four-bedroom properties lead RevPAN at $127, closely followed by 5-bedrooms at $124, while 1- and 3-bedroom units trail significantly at $48 and $47 respectively. Two-bedroom listings outperform their smaller and mid-size peers at $79, making them a solid mid-tier option for investors seeking decent yield without the overhead of a larger home.

Average occupancy rates by property size in Federal Way

Occupancy rates vary considerably by size: 2-bedroom and 4-bedroom listings lead at 44% and 43%, while 3-bedroom units lag at just 23%. This disparity suggests that 3-bedroom properties face a supply-demand mismatch or pricing challenge, and investors focused on cash-flow consistency should lean toward 2- or 4-bedroom configurations.

Average monthly revenue by property size in Federal Way

Monthly revenue climbs steadily with property size, from $1,168 for 1-bedrooms to $5,679 for 5-bedroom homes. The gap between 3-bedrooms ($2,686) and 4-bedrooms ($4,233) is particularly notable—a 58% jump—reinforcing that stepping up to a 4-bedroom property meaningfully changes the income profile.

Average annual revenue by property size in Federal Way

Five-bedroom properties generate the highest annual revenue at $68,151, followed by 4-bedrooms at $50,803—both well above the market average of $28,547. One-bedroom units, at $14,021 per year, may struggle to cover operating costs given Federal Way's average home values, making larger configurations more attractive for investors targeting meaningful returns.

Most common amenities for Airbnb listings in Federal Way

Parking is nearly universal at 98% of listings, followed by kitchens (93%) and laundry facilities (85%). The high prevalence of workspaces (80%) and self check-in (80%) signals a guest base that values convenience and longer-stay flexibility, while features like backyard access (74%) and lake or beach proximity (13–18%) point to a mix of family and outdoor-recreation appeal.

Understanding Federal Way's ROI Score: 52/100

Rabbu's ROI Score is a proprietary metric that evaluates short-term rental investment potential based on multiple factors.

How the ROI Score is Calculated

What This Means for Investors

Federal Way's ROI Score of 52 out of 100 places it in the "Competitive Opportunity" band, reflecting a market where investor demand is real but margins require careful deal selection. Both the revenue-to-price ratio and occupancy stability score below average, which means properties at median prices may not generate compelling yields without operational advantages. Investors should pair this data with thorough local regulatory research and focus on larger property configurations where RevPAN and annual revenue significantly outpace the market average.

Short-Term Rental Regulations in Federal Way

Understanding local STR regulations is essential before investing in Federal Way. Here's the current regulatory landscape:

Permit Requirements

Short-term rental operators in Federal Way, Washington may be required to obtain a business license or STR-specific permit before listing their property. Investors should verify current registration requirements directly with the City of Federal Way and King County, as local rules can change.

Key Restrictions

Common restrictions in Washington municipalities include occupancy limits tied to bedroom count, minimum-stay requirements, noise and nuisance ordinances, and off-street parking mandates. HOA and community covenants may impose additional limitations, particularly in planned developments. Prospective hosts should also check whether primary-residence requirements or annual permit caps apply in the area.

Tax Obligations

Short-term rental hosts in Washington State are typically subject to state sales tax, local lodging tax, and potentially a special hotel/motel tax. Platforms like Airbnb often collect and remit some of these taxes on behalf of hosts, but investors should confirm their specific obligations with the Washington Department of Revenue.

Regulations subject to change. Always verify with local authorities before purchasing. A Rabbu partner agent specializing in Federal Way can provide current regulatory guidance.

Future Outlook & Long-Term Forecast

"Over the next 12–18 months, Federal Way's STR market is expected to maintain its pronounced summer seasonality, with peak revenues in July and August likely holding in the $3,800–$3,900 range. Active listings have grown significantly year over year (98%), which could put additional pressure on occupancy rates unless demand keeps pace. ADR growth may be modest—in the range of 1–3%—given the market's position well below the state average, and investors should anticipate softer winter months with revenues dipping toward $1,300–$1,400. Selective deal sourcing on larger properties, where RevPAN is strongest, will be important for achieving competitive returns in this environment."

— Rabbu Market Analysis Team

Frequently asked questions about Airbnb in Federal Way, WA

What is the average Airbnb occupancy rate in Federal Way?

The average occupancy rate for Airbnb listings in Federal Way is currently 36%, which is in line with the Washington state average. Occupancy varies significantly by property size—2-bedroom units lead at 44%, while 3-bedroom homes sit lower at 23%. Investors targeting higher occupancy should focus on 2- or 4-bedroom configurations, which both stay above 40%.

How much do Airbnb hosts make in Federal Way?

On average, Airbnb hosts in Federal Way earn approximately $2,378 per month or $28,547 per year, based on trailing 12-month booking data. Revenue varies widely by property size: 1-bedroom listings average around $14,021 annually, while 5-bedroom properties generate roughly $68,151. Summer months (June through August) are the strongest earning period, with monthly revenues exceeding $3,400.

Is Federal Way a good market for Airbnb investment?

Federal Way scores a 52 out of 100 on Rabbu's ROI Score, placing it in the "Competitive Opportunity" category. The market's revenue-to-price ratio and occupancy stability are below average, which means investors need to be selective about property type and pricing strategy. That said, larger homes (4–5 bedrooms) deliver significantly higher returns, and the relatively small supply of 61 listings leaves room for well-managed properties to stand out.

What is the average daily rate (ADR) for Airbnb in Federal Way?

The average daily rate in Federal Way is $202, which is roughly half the Washington state average of $393. ADR increases with property size: 1-bedroom listings average $160 per night, while 5-bedroom properties command $373. This scaling suggests that larger homes offer stronger nightly rate premiums relative to the additional cost of acquisition.

Are short-term rentals legal in Federal Way?

Short-term rentals do operate in Federal Way, Washington, but hosts should verify local permit, licensing, and zoning requirements with the city before listing. Regulations can include business license requirements, occupancy limits, and tax obligations. Washington State also imposes sales and lodging taxes on short-term rentals, so investors should ensure full compliance before launching.

When is peak season for Airbnb in Federal Way?

Peak season in Federal Way runs from June through August, with July delivering the highest average monthly revenue at $3,866. August follows closely at $3,835. The off-peak period spans November through February, when monthly revenues drop below $1,750. This pronounced seasonality means investors should budget for slower winter months and aim to maximize summer pricing.

How many Airbnbs are there in Federal Way?

As of April 2026, there are 61 active Airbnb listings in Federal Way. The market is dominated by smaller properties, with 1-bedroom units making up the largest segment at 23 listings, followed by 2-bedrooms (13) and 4-bedrooms (9). Year-over-year listing growth has been strong at 98%, indicating rising investor interest in the area.

How is Airbnb revenue calculated in Federal Way?

The annual and monthly revenue figures shown for Federal Way are derived from the trailing 12 months of historical booking performance for active comparable Airbnb listings in the market—not a forward-looking projection. We average each comparable listing's actual revenue per available night (RevPAN) by month over the past year, remove regional outliers, and aggregate the results to a market-level historical average. Because each month uses its own historical performance data, the figures naturally reflect seasonal peaks and slower periods. Individual results can vary based on property quality, pricing strategy, and how actively the listing is managed.

About Rabbu Market Data

Rabbu provides Airbnb and short-term rental market data and statistics across the United States. Our mission is to empower investors with accurate insights and easy-to-use tools, so they can confidently identify and act on the best opportunities in the Airbnb market.

What this data includes

• Regularly updated active Airbnb and STR listing counts for Federal Way and surrounding zip codes
• Occupancy rates, average daily rates, and RevPAN trends across property sizes
• Monthly and annual revenue estimates based on trailing 12-month booking performance
• Home value benchmarks sourced from the Zillow Home Value Index (ZHVI)
• Amenity prevalence data reflecting current listing features across the market

Sources and disclaimers

Rabbu proprietary analytics as of Apr, 27 2026 and Zillow Home Value Index (ZHVI) as of Apr, 27 2026. Revenue projections are estimates based on comparable properties and do not guarantee future performance. Data reflects trailing 12-month averages as of April 2026 and may not capture recent regulatory or market shifts. Individual property results will vary based on location, condition, management quality, and pricing strategy.