Washington Rental Portfolio Guide
What you need to know before building or growing a rental portfolio in Washington: property tax burden, state income tax, security-deposit rule, source-of-income law, and the metros that actually cash-flow after accounting for local taxes.
Tax burden on Washington rentals
Property tax
0.87%
effective rate on median home value
At 0.87% effective, the property tax burden sits in the lower half nationally (rank 24 of 51). Modest annual carrying cost keeps cash flow projections realistic on median-priced homes.
State income tax
None
top marginal rate
No state income tax means rental income and gains from sales flow through your federal return without a state surcharge. This is a structural tailwind for long-term portfolio compounding, especially if you plan to sell into gains later.
Security deposit rule
No statutory cap on security deposits. Landlords set the deposit at whatever the market accepts, typically one to two months' rent, sometimes more for higher-risk applicants or pets. Local ordinances may still apply.
Note: no state income tax; capital gains tax over $250K applies
Deposit rules change; verify current statute before drafting a lease.
Best cash-flow markets in Washington
Modeled monthly cash flow on a median-priced single-family purchase at 20% down, 30-year fixed, using Washington’s 0.87% effective property tax rate plus 25% of rent for insurance, maintenance, vacancy and management.
| Market | Median price | Median rent | Annual property tax | CF / month |
|---|---|---|---|---|
| Aberdeen, WA | $325,833 | $1,449 | $2,835 | $-857 |
| Pullman, WA | $331,097 | $1,320 | $2,881 | $-986 |
| Moses Lake, WA | $363,584 | $1,456 | $3,163 | $-1,077 |
| Yakima, WA | $355,256 | $1,371 | $3,091 | $-1,092 |
| Kennewick, WA | $441,524 | $1,713 | $3,841 | $-1,350 |
| Shelton, WA | $456,188 | $1,826 | $3,969 | $-1,353 |
State median across the metros: $456,188 home, $1,721 rent, $-1,483/mo modeled cash flow.
Track your Washington rental portfolio
The Pro Portfolio Tracker rolls up every property in your portfolio, auto-revalues them monthly against local price data, and flags DSCR risk and equity milestones. Each Washington property carries the state-specific tax burden shown above through to the cash flow calculation.
Property tax rate: Tax Foundation. Security deposit rule: state statute. Verify current law before making decisions. Statutes change and this page is a planning reference, not legal or tax advice.