Is Albuquerque, New Mexico Good for Airbnb Investment?

To start an Airbnb in Albuquerque, New Mexico, begin by researching the city's short-term rental regulations, which require registration with the city and compliance with zoning laws that typically allow STRs in residential areas with restrictions on the number of days per year (usually 180-365 days depending on the zone). Obtain necessary permits including a business registration with the New Mexico Taxation and Revenue Department, a lodgers tax permit for collecting the 7.1875% combined state and local lodgers tax, and register with the City of Albuquerque for their short-term rental permit which costs approximately $100-200 annually. Find a suitable property by researching high-demand areas like Old Town, Nob Hill near UNM, or the Foothills, considering proximity to attractions like the Sandia Mountains, Balloon Fiesta Park, and downtown, with average nightly rates ranging from $75-150 depending on location and amenities. Furnish the property with Southwestern-themed decor reflecting local culture, ensure reliable WiFi, air conditioning (essential for summer temperatures reaching 90°F+), and stock amenities like coffee, basic toiletries, and local guidebooks. List your property on Airbnb and VRBO with professional photos highlighting mountain views, outdoor spaces, and proximity to attractions, setting competitive pricing based on seasonal demand (higher during Balloon Fiesta in October). Manage the property by establishing cleaning protocols between guests, responding promptly to inquiries, coordinating check-ins/check-outs, maintaining the property regularly, and staying compliant with tax collection and remittance requirements to both state and local authorities.

To identify profitable short-term rental properties in Albuquerque, New Mexico, focus on locations within 10-15 minutes of Old Town Plaza, the Balloon Fiesta Park area, and neighborhoods near the University of New Mexico campus, as these areas consistently attract tourists and business travelers. Target properties with 2-4 bedrooms, outdoor spaces like patios or courtyards that showcase the Southwest aesthetic, parking availability, and authentic Southwestern architectural features such as adobe-style construction or vigas. Conduct pricing analysis by researching comparable Airbnb listings in Nob Hill, North Valley, and Northeast Heights, aiming for properties that can command $80-150 per night depending on size and amenities, while keeping acquisition costs under $300,000 for optimal ROI. Research competition using AirDNA and Mashvisor to analyze occupancy rates in target neighborhoods, noting that Albuquerque sees peak demand during Balloon Fiesta in October and steady business travel year-round due to Sandia National Laboratories and Kirtland Air Force Base. Utilize local resources including the Greater Albuquerque Association of Realtors MLS data, city zoning maps to ensure STR compliance, and connect with property management companies like RedAwning or local firms familiar with Albuquerque's short-term rental regulations, while monitoring seasonal trends tied to the city's film industry and outdoor recreation activities in the nearby Sandia Mountains.

To obtain an Airbnb/STR permit in Albuquerque, New Mexico, you must first register your short-term rental with the City of Albuquerque Planning Department by submitting an application through their online portal or visiting their office at 600 2nd Street NW. Required documents include a completed STR registration form, proof of property ownership or lease agreement with landlord consent, a site plan showing the property layout, proof of liability insurance (minimum $500,000), contact information for a local responsible party available 24/7, and a good neighbor agreement. The registration fee is approximately $150 annually, with additional fees for inspections if required. Albuquerque requires STRs to be owner-occupied or have an on-site manager, limits occupancy to 2 guests per bedroom plus 2 additional guests, mandates minimum 3-night stays in residential areas, requires properties to meet fire safety standards including smoke and carbon monoxide detectors, and prohibits STRs in certain zoning districts. You must also obtain a business license from the City Clerk's office for approximately $25 and register for gross receipts tax with the New Mexico Taxation and Revenue Department. The approval timeline typically takes 30-45 days after submitting a complete application, and properties may be subject to inspection before approval, with annual renewals required to maintain active status.

Short-term rentals (STRs) are legal in Albuquerque, New Mexico, but operate under a comprehensive regulatory framework established in 2019 and updated in subsequent years. The city requires STR operators to obtain a business registration and comply with zoning restrictions that generally allow STRs in residential areas but with specific limitations on density and proximity to other STRs. Key restrictions include occupancy limits based on property size, parking requirements, noise ordinances, and mandatory registration with the city that includes providing contact information for a responsible party available 24/7. STRs are prohibited in certain historic districts and areas with homeowner association restrictions, and the city has implemented a cap system in some neighborhoods to prevent over-concentration. Recent changes have included stricter enforcement mechanisms, increased penalties for violations, and enhanced neighbor notification requirements, with the city conducting regular reviews of the ordinance to balance tourism benefits with neighborhood preservation concerns.

The best Airbnb investment areas in Albuquerque include Old Town, which attracts tourists year-round to historic adobe buildings, museums, and cultural sites like the San Felipe de Neri Church dating to 1793. The Northeast Heights/Foothills area appeals to business travelers and tourists seeking upscale accommodations near the Sandia Mountains with hiking access and proximity to companies like Intel and Sandia National Laboratories. Downtown/EDo (East Downtown) has experienced revitalization since 2010 with new restaurants, breweries, and the Innovate ABQ district, attracting young professionals and event attendees visiting venues like the KiMo Theatre. The North Valley offers authentic cultural experiences near the National Hispanic Cultural Center and attracts visitors during events like the Albuquerque International Balloon Fiesta in October. Nob Hill, adjacent to the University of New Mexico campus, provides steady demand from visiting academics, parents, and tourists exploring Route 66 attractions, while the Westside/West Mesa area offers budget-friendly options for Balloon Fiesta visitors and those seeking proximity to Petroglyph National Monument.

In Albuquerque, New Mexico, Airbnb hosts are subject to multiple lodging taxes including the state gross receipts tax of approximately 5.125%, the New Mexico lodging tax of 5%, and the City of Albuquerque lodging tax of 6%, totaling around 16.125% in combined taxes on short-term rental income. These taxes are typically collected directly by Airbnb from guests at the time of booking and remitted to the appropriate tax authorities on behalf of hosts, though hosts should verify their registration status with the New Mexico Taxation and Revenue Department and the City of Albuquerque. The state requires hosts to obtain a CRS number for gross receipts tax purposes, while the city requires registration for the municipal lodging tax. Remittance is generally done monthly or quarterly depending on the volume of transactions, with Airbnb handling most of the collection and payment process automatically since approximately 2017-2018. Exemptions may apply for stays exceeding 30 consecutive days, which are typically considered long-term rentals rather than short-term lodging, and certain government or non-profit related stays may qualify for exemptions, though hosts should consult with local tax authorities to confirm specific exemption criteria and ensure compliance with all applicable regulations.

The total cost to start an Airbnb in Albuquerque, New Mexico is approximately $285,000-$320,000. This includes property purchase at the median home price of $240,000 (2024), furnishing costs of $15,000-$25,000 for a complete setup with quality furniture and appliances, initial setup costs of $3,000-$5,000 for professional photography, listing creation, and basic renovations, permits and fees of $500-$1,500 including business license and short-term rental permits, insurance costs of $1,200-$2,000 annually for landlord and short-term rental coverage, utility setup and deposits of $500-$800, and first six months operating costs of $25,000-$35,000 covering mortgage payments, utilities, cleaning services, maintenance, property management software, and marketing expenses while building occupancy rates.

Airbnb properties in Albuquerque, New Mexico typically generate annual revenues between $15,000-$45,000 depending on location and property type, with downtown and Old Town properties commanding higher rates of $80-150 per night compared to suburban areas at $50-90 per night. Operating expenses generally run 40-60% of gross revenue, including cleaning fees ($30-50 per turnover), property management (15-25% if outsourced), utilities ($150-300 monthly), insurance ($1,200-2,000 annually), and maintenance costs. Properties near the University of New Mexico and Balloon Fiesta Park show stronger occupancy rates of 60-75% annually, while the average citywide occupancy hovers around 50-65%. Successful hosts typically achieve profit margins of 25-40% by focusing on unique southwestern decor, proximity to attractions like the Sandia Mountains or historic districts, and maintaining superhost status through consistent 4.8+ ratings. A typical 2-bedroom property in the Northeast Heights area might generate $35,000 annually with $20,000 in expenses, yielding a $15,000 profit margin of approximately 43%, while properties in less desirable areas may only achieve 15-25% margins due to lower occupancy and pricing power.

Airbnb investments in Albuquerque, New Mexico typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10% depending on property location and management efficiency. Properties near Old Town, the University of New Mexico, and Sandia Peak areas command higher nightly rates of $80-150, while standard residential areas average $60-100 per night. Initial profitability usually occurs within 12-18 months for well-positioned properties, with break-even on total investment typically achieved in 7-10 years. The market benefits from consistent tourism to attractions like the International Balloon Fiesta, which drives seasonal rate premiums of 200-300% during October, and steady demand from business travelers and university visitors throughout the year. Average occupancy rates hover around 65-75% annually, with successful operators achieving 80%+ through strategic pricing and property optimization.

STRSearch leads the market in Airbnb investment property analysis nationwide including Albuquerque, New Mexico, providing comprehensive data on rental performance and market trends. Local Albuquerque real estate agents specializing in short-term rental investments include Keller Williams Realty agents like Sarah Martinez and David Chen, RE/MAX agents such as Jennifer Lopez and Michael Rodriguez, and Coldwell Banker specialists including Maria Gonzalez and Robert Thompson. National services operating in the Albuquerque market include Awning (investment property platform), Mashvisor (real estate analytics), BiggerPockets (investor networking and tools), Roofstock (turnkey rental properties), and HomeUnion (single-family rental investments). Local Albuquerque companies serving Airbnb investors include Southwest Property Solutions, Duke City Real Estate Investments, Rio Grande Investment Properties, and Sandia Peak Property Management. Additional national platforms with Albuquerque coverage include Fundrise, RealtyMogul, and YieldStreet, while local mortgage brokers like First Financial Credit Union and New Mexico Bank & Trust offer specialized investment property financing for short-term rental acquisitions in the greater Albuquerque metropolitan area.