Is Farmington, New Mexico Good for Airbnb Investment?

To start an Airbnb in Farmington, New Mexico, begin by researching local regulations through the City of Farmington Planning Department, as the city requires short-term rental operators to obtain a business license and comply with zoning ordinances that typically allow STRs in residential zones with specific restrictions on occupancy and parking. Contact the New Mexico Taxation and Revenue Department to obtain a gross receipts tax license (CRS number) since you'll need to collect and remit state gross receipts tax of approximately 5.125% plus local taxes totaling around 8.4375%. Find a suitable property by searching areas near downtown Farmington, the Animas River trails, or close to attractions like the Farmington Museum, ensuring the property meets city fire safety codes and has adequate parking for guests. Furnish the space with essential amenities including Wi-Fi, kitchen basics, linens, and consider adding local touches like Native American artwork or information about nearby Four Corners attractions. Create your listing on Airbnb and VRBO platforms with professional photos highlighting proximity to outdoor recreation areas like Bisti Badlands and Chaco Culture National Historical Park, setting competitive rates based on local market analysis (typically $75-150/night depending on size and amenities). Manage your property by establishing cleaning protocols, coordinating with local cleaning services, installing keyless entry systems, and maintaining responsive communication with guests while ensuring compliance with occupancy limits (usually 2 people per bedroom plus 2 additional) and quiet hours typically enforced between 10 PM and 7 AM in residential neighborhoods.

To identify profitable short-term rental properties in Farmington, New Mexico, focus on locations near major attractions like the Four Corners Monument, Shiprock formation, and downtown business district, as well as properties within 10-15 minutes of San Juan Regional Medical Center and energy sector facilities since Farmington serves as a hub for oil and gas workers. Target 2-4 bedroom single-family homes or condos built after 1990 with modern amenities, outdoor spaces, parking, and reliable internet, as these appeal to both leisure travelers and business guests. Conduct pricing analysis using AirDNA and Mashvisor to benchmark against the local market, which typically sees rates of $80-150 per night depending on size and location, while analyzing seasonal demand patterns tied to outdoor recreation peaks in spring and fall. Research competition by examining existing STR listings within a 3-mile radius, identifying gaps in amenities or property types, and monitoring occupancy rates of similar properties through tools like AllTheRooms and Transparent. Utilize Farmington-specific resources including the Farmington Convention and Visitors Bureau for tourism data, local real estate agents familiar with investment properties, and the city's planning department to understand zoning regulations and STR permit requirements, while leveraging broader tools like Rabbu, BiggerPockets market analysis, and local Facebook real estate investment groups to validate your investment thesis.

To obtain an Airbnb/STR permit in Farmington, New Mexico, you must first contact the City of Farmington Planning Department at City Hall located at 800 Municipal Drive to determine if short-term rentals are permitted in your specific zoning district, as the city requires compliance with zoning regulations and may require a conditional use permit for residential areas. You'll need to submit an application that includes a completed business registration form, proof of property ownership or lease agreement with landlord consent, a site plan showing parking arrangements, floor plan of the rental unit, proof of liability insurance (typically $1 million minimum), and contact information for a local property manager if you're not residing locally. The application fee is approximately $150-300 depending on the permit type, with additional fees for inspections ranging from $75-150. You must also register for a New Mexico gross receipts tax license through the Taxation and Revenue Department and obtain any required fire safety inspections from the Farmington Fire Department. The city requires that STRs maintain adequate off-street parking (typically 2 spaces minimum), have working smoke and carbon monoxide detectors, provide trash collection arrangements, and maintain quiet hours typically from 10 PM to 7 AM. The approval timeline is generally 30-60 days from submission of a complete application, and permits are typically valid for one year requiring annual renewal with updated insurance documentation and compliance verification.

Short-term rentals (STRs) are legal in Farmington, New Mexico, but operate under specific municipal regulations established around 2019-2020. The city requires STR operators to obtain a business license and comply with zoning restrictions that generally limit STRs to certain residential zones while prohibiting them in some neighborhoods to preserve residential character. Properties must meet safety standards including smoke detectors, carbon monoxide detectors, and fire extinguishers, and operators must provide local contact information for guests and neighbors. Farmington has implemented occupancy limits based on property size and requires adequate parking for guests. The city also mandates that STR operators collect and remit lodgers' tax, similar to hotels. Recent changes have included stricter enforcement of noise ordinances and neighbor complaint procedures, with violations potentially resulting in permit revocation. Properties in historic districts or certain residential zones may face additional restrictions, and the city has been monitoring STR density in neighborhoods to prevent over-concentration that could disrupt residential communities.

The best areas for Airbnb investment in Farmington, New Mexico include the Historic Downtown District near Main Street, which attracts tourists visiting the Farmington Museum and cultural sites, and the Animas Valley area, popular for its proximity to outdoor recreation and the Animas River. The Foothills neighborhood offers appeal to business travelers working with energy companies like ConocoPhillips and WPX Energy, while areas near San Juan College attract visiting families and academic travelers. The Brookside Park vicinity is attractive for families visiting for youth sports tournaments at the Farmington Sports Complex, and properties near the Four Corners region benefit from tourists exploring Mesa Verde National Park, Chaco Culture National Historical Park, and other regional attractions. The energy sector boom since 2010 has created consistent demand for corporate housing, particularly in neighborhoods like Sunrise Estates and Country Club areas where oil and gas executives prefer to stay, while the annual Connie Mack World Series baseball tournament and River Days Festival generate seasonal rental demand throughout the city.

Airbnb properties in Farmington, New Mexico are subject to multiple lodging taxes including the state lodging tax of 5%, San Juan County lodging tax of 5%, and the City of Farmington lodging tax of 6%, totaling approximately 16% in combined lodging taxes. These taxes are typically collected by Airbnb directly from guests at the time of booking and remitted to the appropriate tax authorities on behalf of hosts through Airbnb's automated tax collection service, which began around 2016-2017 for New Mexico. The state lodging tax is administered by the New Mexico Taxation and Revenue Department and must be remitted monthly by the 25th of the following month, while local taxes follow similar remittance schedules to their respective jurisdictions. Hosts who collect taxes independently must register with the state and obtain a CRS number, file monthly returns, and maintain detailed records of all transactions. Exemptions typically apply to stays exceeding 30 consecutive days, government employees on official business, and certain nonprofit organizations, though documentation is required to claim these exemptions. The gross receipts tax of approximately 7.6875% also applies to the lodging service itself, making the total tax burden on short-term rentals in Farmington around 23-24% when all applicable taxes are combined.

To start an Airbnb in Farmington, New Mexico, expect total costs around $185,000-$220,000. Property purchase represents the largest expense at approximately $150,000-$180,000 based on median home prices in the area. Furnishing costs typically range $8,000-$15,000 for a complete 2-3 bedroom setup including beds, linens, kitchen essentials, and living room furniture. Initial setup costs including professional photography, listing creation, and basic renovations average $2,000-$4,000. Permits and fees vary but budget $500-$1,500 for business licenses, short-term rental permits, and potential HOA approvals. Insurance costs run $1,200-$2,400 annually for landlord and short-term rental coverage. Utility deposits and setup fees total approximately $500-$800 for electricity, gas, water, internet, and cable. First six months operating costs including utilities ($600-$900 monthly), cleaning supplies, maintenance, Airbnb fees (3% host fee), and marketing budget approximately $5,000-$8,000. Additional considerations include potential property management fees if outsourced (10-20% of revenue) and emergency repair fund of $2,000-$3,000.

Airbnb properties in Farmington, New Mexico typically generate modest returns with average daily rates ranging from $65-$95 depending on property size and amenities, resulting in monthly revenues of $1,200-$2,400 for properties with 60-70% occupancy rates. Operating expenses including cleaning fees ($40-60 per turnover), utilities ($150-250/month), property management (15-25% of revenue), insurance ($100-200/month), and maintenance ($200-400/month) typically consume 45-60% of gross revenue, leaving net profit margins of 15-35% for well-managed properties. Success factors in this market include proximity to the San Juan River for fishing enthusiasts, competitive pricing below $100/night, professional photography showcasing outdoor access, and catering to oil and gas workers seeking extended stays, with properties near the Four Corners region or with RV parking commanding premium rates. A typical 3-bedroom home generating $1,800 monthly revenue faces approximately $1,100 in expenses, yielding $700 monthly profit or roughly 8-12% annual return on a $150,000 property investment, though seasonal fluctuations tied to outdoor recreation and energy sector activity significantly impact performance throughout the year.

Airbnb investments in Farmington, New Mexico typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, primarily driven by the area's proximity to oil and gas operations in the San Juan Basin and Four Corners region. Properties near downtown Farmington or close to San Juan College tend to perform better, with average daily rates of $85-120 and occupancy rates of 55-70% annually. Initial investment recovery and profitability usually occurs within 18-24 months for well-positioned properties under $200,000, though the market experiences seasonal fluctuations with stronger performance during spring and summer months when outdoor recreation and energy sector activity peaks. The presence of major employers like San Juan Regional Medical Center and ongoing energy development projects provide consistent demand, while competition from approximately 150-200 active Airbnb listings in the greater Farmington area keeps the market moderately competitive but sustainable for investors who focus on properties with unique amenities or strategic locations near Shiprock, Aztec, or recreational areas like the Animas River.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Farmington, New Mexico by providing market analytics and property recommendations. Local real estate agents specializing in investment properties include Keller Williams Four Corners with agents like Sarah Martinez and Century 21 SoWesCo's investment specialists who understand the Farmington vacation rental market. National services include AirDNA (founded 2015) for market data analysis, Mashvisor for property investment analytics, and BiggerPockets for investor networking and deal sourcing. Vacasa and RedAwning offer property management services for Airbnb investors in the area, while local property management companies like Four Corners Property Management and San Juan Property Services cater specifically to short-term rental investors. Additional national platforms include Roofstock for turnkey rental properties, HomeUnion for investment property sourcing, and local mortgage brokers like First Financial Credit Union who specialize in investment property financing for the Farmington market.