Real Estate Investing in Mercer Island, Washington (98040)
Everything the listing leaves out — vacancy, rent trend, cap rate, landlord climate. All free.
Should you buy in 98040 (Mercer Island, WA)? Our answer, based on the numbers below.
Multiple negative signals. Better options likely exist nearby.
Structural challenges here. The numbers may look cheap but operational risk is high. Only for experienced, hands-on investors.
- Tenant-protective state: Landlord rating 1.0/5 — slower evictions, more regulations.
- High price-to-rent: Price-to-rent ratio 69.6 — hard to cash-flow at these prices.
What’s happening in Mercer Island, WA (98040)?
Click any question — our AI will research it live from the web and show you sources.
Market Analysis: 98040 Mercer Island
The 98040 ZIP in Mercer Island, WA is a local-operator market. Outside capital chasing a $2.3M entry has to pair deep knowledge with the discount.
Rent of $2,746/mo on a $2.3M basis reads well until vacancy, delinquency, and capex enter the model. The honest cap rate in 98040 sits below the stated 0.0% once reality is priced in.
ZIP 98040's metrics run below King County's averages on price growth and tenant stability. Investors who ignore that regional gap tend to relearn it the hard way.
The 98040 ZIP's population of 25,282 has faced economic pressure over the last decade. That pressure shows up in rent delinquency patterns that clocks in at the need for careful underwriting.
The 98040 ZIP fits a narrow investor profile — hands-on, patient, and willing to accept that the cap rate on paper is not the cap rate in reality.
Here's what matters if you're considering buying a home in Mercer Island:
Property Strategy for 98040
Which property type performs best in this market?
📊 Compare All Property Types →
| Type | Median Value | Est. Rent | Cap Rate | 5yr CAGR | $/Bedroom |
|---|---|---|---|---|---|
| 1BR | $425,166 | $2,590 | 4.4% | 0.0% | $425,166 |
| 2BR | $725,658 | $3,020 | 3.0% | +2.0% | $362,829 |
| 3BR | $1,853,996 | $3,950 | 1.5% | +7.3% | $617,999 |
| 4BR | $2,394,882 | $4,650 | 1.4% | +7.8% | $598,721 |
| 5BR | $2,905,143 | — | — | +7.6% | $581,029 |
Market Trends
Home Value History (with trend line)
Rent History (with trend line)
📊 How Does 98040 Compare?
| Metric | 98040 | Mercer Island | Seattle-Tacoma-Bellevue, WA | Washington |
|---|---|---|---|---|
| Home Value | $2,293,587 | $2,293,587 | N/A | $591,536 |
| 5-Year CAGR | 3.8% | 3.8% | N/A | 5.9% |
| Avg Rent | $2,746 | $2,746 | N/A | - |
| Cap Rate | 0.9% | 0.9% | - | - |
Similar ZIPs Within 25 Miles
Compare other nearby markets to see if a neighbor offers a better fit.
Landlord Ground Truth
Real numbers from people who own or manage rentals in ZIP 98040 (Mercer Island, WA). Anonymous, moderated, never written by AI.
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Property managers serving King County
Manage rentals here? List your business →Alki Property Management LLC specializes in apartment rentals. summary from their website
Brink Property Management offers residential property management and vacant home management services in Bellevue, providing marketing, tenant screening, rent collection, and maintenance. summary from their website
Full Service Property Management offers compassionate property management across Metro Seattle, including multi-family management, property marketing, and maintenance services. summary from their website
Listings are shown for convenience — Repit doesn’t endorse or vet these companies. Ratings shown come only from email-verified visitors.
📊 Market Snapshot
| Home Value | $2,293,587 |
| Monthly Rent | $2,746 |
| Price-to-Rent | 69.6:1 |
| 1% Rule | ✗ Fails |
💰 Return Metrics
| Gross Yield | 1.4% |
| Cap Rate | 0.9% |
| 5-Year IRR | 4.7% |
📈 Home Appreciation
| 1-Year | +1.8% ▲ |
| 3-Year CAGR | +3.5% ▲ |
| 5-Year CAGR | +3.8% ▲ |
| 10-Year CAGR | +6.9% ▲ |
🏠 Rent Trends
| 1-Year | +3.4% ▲ |
| 3-Year CAGR | +3.2% ▲ |
| 5-Year CAGR | +4.1% ▲ |
The current 30-yr mortgage rate (6.8%) exceeds the estimated cap rate (0.9%). Financing reduces your cash-on-cash return below the cap rate. Markets like this may still make sense as IRR plays — factoring in appreciation, depreciation, and a future refinance when rates drop.
Run an IRR Analysis →⚠️ Risk Signals
Composite view of factors that can impact a ZIP's stability and your downside risk.
Demographics in 98040
Population: 25,282
Crime & Safety
Crime & Safety Data Coming Soon
We're integrating comprehensive crime statistics including violent crime rates, property crime, and safety scores to help you make informed investment decisions.
Expected: Q1 2025
🎓 Schools in 98040
Schools in This ZIP Code
Nearby Schools (5 more)
Schools in adjacent ZIP codes that may serve this area
Emerson Elementary School
Dunlap Elementary School
Graham Hill Elementary School
Hawthorne Elementary School
South Shore PK-8 School
About Repit School Scores
Traditional school ratings rely heavily on standardized test scores, which often reflect family income more than school quality. Repit takes a different approach.
We evaluate schools based on factors that research shows actually impact educational outcomes:
- Class Size — Smaller classes mean more individual attention
- School Funding — Resources available for programs, staff, and facilities
- Community Factors — Neighborhood characteristics that influence student success
- School Environment — Size, type, and structure
Scores are updated annually using federal education data.
🎓 Nearby Colleges & Universities
Investor Insight: With 12,138 students living off-campus nearby, this area has strong rental demand from the college population.
Frequently Asked Questions
What is the average home sale price in Mercer Island, WA?
Typical homes in Mercer Island, WA go for around $2.3M. The 5-year CAGR of 0.0% even-keeled price movement.
Which investment style suits Mercer Island, WA?
A careful cash-flow rentals with hands-on management strategy Mercer Island, WA best. The market produces steady results for that approach at the $2.3M price point.
What kind of tenants rent in Mercer Island, WA?
Mercer Island, WA offers a stable renter base at the $2,746/mo rent level. Tenant turnover is reasonable for well-managed properties.
How strict are landlord regulations in Mercer Island, WA?
Mercer Island, WA operates under WA law, which is tenant-protective overall for landlords. Expect predictable treatment in typical lease and eviction cases.
How strong are rents in Mercer Island, WA?
The typical rental in Mercer Island, WA commands about $2,746/mo monthly. That rent profile reliable cash flow against the $2.3M purchase basis.
You know 98040 now. You don’t know where it ranks.
This page stays free — all of it. What one page can’t tell you is how 98040 compares to every other market. Investor ($19/mo) screens every U.S. ZIP by cap rate, the 1% rule, vacancy and landlord climate, and exports your shortlist.
How 98040 ranks in Seattle-Tacoma-Bellevue, WA
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