Buying Rentals In Woodinville? Know The Rules First

Thinking about buying a rental in Woodinville? Smart move, but before you run the numbers, you need to understand a few local and state rules that directly affect cash flow, timelines, and operations. Recent changes added longer notice periods, fee limits, and a statewide rent increase cap, which means your plan needs to be compliant from day one. In this guide, you’ll get a clear, investor-friendly overview of what changed, what to check before you buy, and how to protect your returns. Let’s dive in.

What changed in 2025

Woodinville tenant protections

Woodinville adopted new tenant protections that take effect April 12, 2025. Leases entered into or renewed after that date must include longer notice periods for rent and fee increases, limits on move-in costs, and specific screening privacy standards. Review the full requirements in Woodinville Municipal Code Chapter 8.16 and the City’s Tenant Rights page.

Key highlights to plan for:

• Rent or fee increases over 3 percent require at least 120 days’ written notice. Increases over 10 percent require at least 180 days’ notice.
• Nonrenewal of a fixed-term lease of six months or longer requires at least 120 days’ notice.
• Move-in fees and security deposits are capped in many cases at one month’s rent, with installment options available to tenants.
• During screening, you may request but cannot require a Social Security number. Alternative screening methods must be available.

Washington’s rent increase cap

As of May 7, 2025, Washington limits annual rent increases for most residential tenancies to the lesser of 7 percent plus inflation or 10 percent. The law also adds notice and tenant rights if an increase exceeds the cap. Model your revenue growth under this limit and build in the long notice windows required locally. See a summary of the new statewide cap via AP News, and use the Attorney General’s landlord-tenant resources for statewide duties and forms.

Short-term rentals and taxes

Sales and lodging taxes on stays under 30 days

Short-term stays under 30 consecutive days are treated as lodging for tax purposes. Hosts must collect state sales tax and applicable local lodging taxes, then report to the Washington Department of Revenue. Platforms sometimes remit on your behalf, but you are still responsible for proper registration and reporting. Review DOR guidance on transient lodging tax rules here.

Woodinville adds a city lodging tax of 1 percent on short stays. Factor that into nightly pricing along with state and county lodging taxes. You can confirm city tax details on the City of Woodinville taxes page.

Zoning and ADUs

Before you assume a property can operate as a short-term rental, confirm permitted uses for the specific zoning designation. Start with Woodinville’s zoning regulations for permitted uses and definitions in WMC Chapter 21.20.

If you plan to rent an accessory dwelling unit, know that Woodinville requires the owner to occupy either the main home or the ADU as a permanent residence for at least six months each year. The unit you occupy cannot be rented while you live there. Read the owner-occupancy language in WMC 21.41.020 and make sure your plan fits.

Operating rentals the right way

Notice timelines you cannot miss

Put these timelines on your calendar. In Woodinville, larger rent or fee increases require 120 to 180 days’ notice depending on the percentage change. For statewide eviction processes, nonpayment of rent requires a 14-day notice before filing, and you must use proper forms. Use the City’s tenant protections for local timelines and the AG’s landlord-tenant page for statewide notices and procedures.

Deposits, fees, and screening

Move-in fees and security deposits are generally capped at one month’s rent, and many tenants can pay certain upfront amounts in installments. During screening, you cannot require a Social Security number, and you must offer alternative documentation options. Noncompliance can lead to tenant claims with potential damages and attorney fees. See WMC 8.16 for details.

Licensing, financing, and insurance

City business license

If you operate rentals or short-term rentals, you will need a City of Woodinville business license endorsement. The City provides requirements and links to apply on its Business License page. Budget for fees and renewals along with your property operating costs.

Financing if you plan to rent

Lenders treat owner-occupied, second-home, and investment properties differently. Rental income, reserves, and occupancy plans affect underwriting and rates. Review Fannie Mae’s guidance on rental income treatment, and talk with your lender early if you plan to live in one unit or purchase a pure investment.

Insurance and liability

Standard homeowner policies are not designed for rentals. Ask your broker about landlord coverage, short-term rental endorsements if applicable, and an umbrella policy for added liability protection. Some policies exclude STRs unless specifically endorsed, so confirm permitted uses in writing.

Your pre-offer due diligence checklist

• Confirm zoning and STR eligibility for the address, and whether any permits or conditions apply. Start with WMC Chapter 21.20.
• If buying with an ADU plan, verify owner-occupancy rules and whether your intended use complies with WMC 21.41.020.
• Review lease language for compliance with Woodinville’s tenant protections, especially notice timelines and fee caps.
• Model revenue growth under Washington’s new rent increase cap summarized by AP News and incorporate long local notice periods.
• If hosting short stays, register and set up tax collection consistent with DOR transient lodging rules and the City’s 1 percent lodging tax.
• Obtain your City business license endorsement via the Business License page.
• Align financing with your plan by reviewing Fannie Mae’s rental income guidance and speaking with your lender.
• Confirm insurance coverage for long-term rentals or STRs, including liability and loss-of-rents options.

Bottom line

Woodinville is a strong rental market, but the rules have real teeth. A compliant lease, accurate notice timelines, and the new statewide rent cap should all be built into your underwriting. If you want a warm, high-touch advisor who knows the Eastside and can help you buy the right property for your plan, connect with The Koi Group.

FAQs

What is Woodinville’s new rent increase notice requirement?

• For agreements entered into or renewed after April 12, 2025, increases over 3 percent require at least 120 days’ notice, and increases over 10 percent require at least 180 days’ notice under WMC 8.16.

How does Washington’s 2025 rent increase cap affect investors?

• Annual increases for most tenancies are capped at the lesser of 7 percent plus inflation or 10 percent, so revenue growth should be modeled under that limit; see the statewide summary from AP News.

Can I operate an Airbnb in a Woodinville single-family home?

• Possibly, but you must confirm zoning permissions, comply with lodging tax rules, and, if using an ADU, satisfy owner-occupancy requirements in WMC 21.41.020.

What move-in fee and deposit limits apply in Woodinville?

• Move-in fees and security deposits are generally capped at one month’s rent, with installment options available to tenants as outlined in WMC 8.16.

Do I need a city license to rent my property in Woodinville?

• Yes, you will need a city business license endorsement; start with the City’s Business License page.

What tax applies to short-term stays in Woodinville?

• Short stays under 30 days are subject to state sales tax and local lodging taxes, including Woodinville’s 1 percent city lodging tax; see DOR’s transient lodging guidance and the City’s tax page.