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, or close to attractions like the Four Corners region, ensuring the property meets city fire safety codes and has adequate parking for guests. Furnish the space with essential amenities including Wi-Fi, kitchen supplies, linens, and local guidebooks highlighting nearby attractions like Chaco Culture National Historical Park and Aztec Ruins. Create your listing on Airbnb and other platforms like VRBO, setting competitive rates based on local market research (typically $75-150/night depending on size and amenities), and include high-quality photos and descriptions emphasizing proximity to outdoor recreation and cultural sites. Manage your property by establishing check-in procedures, maintaining cleanliness standards, responding promptly to guest inquiries, and keeping detailed records for tax purposes while ensuring compliance with the city's noise ordinances and occupancy limits, typically capped at 2 guests per bedroom plus 2 additional guests.

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 15-20 minutes of San Juan Regional Medical Center and energy sector facilities that attract business travelers. 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 exploring the Southwest and oil/gas industry professionals on extended stays. Conduct pricing analysis using AirDNA and Mashvisor to benchmark nightly rates between $80-150 depending on size and location, while calculating potential annual revenue of $25,000-45,000 for well-positioned properties. Research competition by analyzing existing Airbnb and VRBO listings within a 5-mile radius, noting occupancy rates, guest reviews, and pricing strategies, particularly focusing on properties that cater to outdoor enthusiasts visiting nearby Aztec Ruins National Monument and Bisti Badlands. Utilize tools like Rabbu, AllTheRooms, and local MLS data through Realtor.com to identify undervalued properties under $200,000, while consulting with local property management companies like Vacasa or RedAwning to understand operational costs and market dynamics specific to this high-desert region that serves both tourism and energy industry demand.

To obtain an Airbnb/STR permit in Farmington, New Mexico, you must first contact the 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 a conditional use permit for STRs in most residential areas. Submit an application for a conditional use permit along with a site plan showing the property layout, parking arrangements, and neighboring properties, plus a detailed operational plan describing guest capacity, noise control measures, and property management procedures. Required documents include proof of property ownership or lease agreement, current business registration with the New Mexico Secretary of State, general liability insurance certificate with minimum $1 million coverage, and a floor plan indicating maximum occupancy per room. The application fee is approximately $500-750 for the conditional use permit, plus additional fees for public notices and hearings estimated at $200-300. The process typically takes 60-90 days and includes a public hearing before the Planning Commission, during which neighbors can provide input. Farmington-specific requirements include maintaining adequate off-street parking (typically 2 spaces minimum), ensuring the property meets all fire safety codes, limiting occupancy to no more than 2 guests per bedroom plus 2 additional guests, maintaining quiet hours from 10 PM to 7 AM, and providing 24-hour contact information for a responsible party who can respond to complaints within 30 minutes.

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 short-term rentals 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 are required to provide local contact information for guests and neighbors. Farmington has implemented occupancy limits based on property size and requires compliance with noise ordinances and parking regulations. The city has been actively monitoring and updating these regulations in recent years, with enforcement focusing on unlicensed operations and properties that violate zoning requirements, particularly in areas near San Juan College and downtown where housing availability for long-term residents has been a concern.

The best areas for Airbnb investment in Farmington, New Mexico include the Historic Downtown District, which attracts tourists visiting the Farmington Museum and cultural sites while serving business travelers to local government offices and regional headquarters. The Animas Valley area near the Animas River offers scenic appeal for outdoor enthusiasts accessing nearby hiking trails and fishing spots, particularly popular during spring and summer months. The Airport Road corridor provides excellent access for business travelers working in the oil and gas industry, as Farmington serves as a regional hub for energy companies operating in the San Juan Basin. The Foothills area offers upscale accommodations for visitors to the nearby Four Corners region, Chaco Culture National Historical Park, and Aztec Ruins National Monument, generating consistent tourism revenue from 2019-2024. The East Main Street district benefits from proximity to San Juan College, creating demand from visiting families, prospective students, and academic conference attendees, while also serving medical tourists visiting San Juan Regional Medical Center.

Airbnb properties in Farmington, New Mexico are subject to multiple lodging taxes including the state gross receipts tax of 5.125%, San Juan County lodging tax of 5%, and Farmington municipal lodging tax of 6%, totaling approximately 16.125% in combined taxes on short-term rental accommodations. The New Mexico Taxation and Revenue Department requires hosts to register for a CRS number and collect gross receipts tax on all rental income, with monthly remittance due by the 25th of the following month for properties generating over $100 monthly. San Juan County's lodging tax is collected by the county assessor's office and must be remitted quarterly, while Farmington's municipal lodging tax is administered through the city clerk's office with monthly reporting requirements. Airbnb may collect and remit some of these taxes directly through their platform under voluntary collection agreements established around 2018-2019, but hosts remain ultimately responsible for compliance and should verify which taxes are being collected automatically versus those requiring manual collection and remittance. Exemptions typically apply to stays exceeding 30 consecutive days, which are considered long-term rentals rather than transient lodging, and properties rented to the same guest for more than 30 days may qualify for reduced tax obligations under certain circumstances.

To start an Airbnb in Farmington, New Mexico, expect total costs of approximately $285,000-$320,000. Property purchase represents the largest expense at $220,000-$250,000 based on median home prices in the area. Furnishing costs range from $15,000-$25,000 for a complete 2-3 bedroom setup including furniture, appliances, linens, and decor. Initial setup costs including professional photography, listing creation, and basic renovations total $3,000-$5,000. Permits and fees vary but typically run $500-$1,500 including business licenses and potential HOA approvals. Insurance costs approximately $1,200-$2,000 annually for short-term rental coverage. Utility setup and deposits for electricity, gas, water, internet, and cable total $800-$1,200. First six months operating costs including utilities ($600/month), cleaning supplies ($100/month), maintenance reserves ($200/month), property management software ($50/month), and marketing ($100/month) add approximately $6,300. Additional considerations include potential property taxes of $2,000-$3,000 annually and a recommended cash reserve of $10,000-$15,000 for unexpected expenses and vacancy periods.

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 ($150-200 monthly), property management (15-25% of revenue), insurance ($100-150 monthly), and maintenance costs typically consume 45-55% of gross revenue. Properties near the San Juan River or those serving oil and gas workers in the Four Corners region tend to perform better, with some hosts reporting annual profits of $8,000-15,000 on single-family homes purchased for $180,000-250,000, yielding profit margins of 15-25%. Success factors include targeting corporate travelers and energy sector workers who often book extended stays, maintaining properties to hotel standards, and pricing competitively against local hotels like Hampton Inn and Holiday Inn Express which charge $90-120 nightly. A typical 3-bedroom home generating $20,000 annual revenue with $12,000 in expenses would yield an 8-12% return on investment, though seasonal fluctuations tied to energy sector activity and tourism to nearby attractions like Chaco Culture National Historical Park significantly impact performance throughout the year.

Airbnb investments in Farmington, New Mexico typically generate annual ROI between 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 outdoor recreation activities near the Animas River. Properties in downtown Farmington or near San Juan College tend to achieve higher occupancy rates of 60-75% annually, with average daily rates between $85-120 depending on property size and amenities. Initial profitability usually occurs within 18-24 months for well-positioned properties, though the market experiences seasonal fluctuations with peak demand during summer months and during major energy sector projects. The relatively affordable property acquisition costs in Farmington, with median home prices around $180,000-220,000 as of 2023, allow for lower barrier to entry compared to major tourist destinations, though investors should account for the market's dependence on the energy sector and competition from traditional hotels serving business travelers to companies like ConocoPhillips and Kinder Morgan.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for investors looking in Farmington, New Mexico. Local real estate agents like Keller Williams Four Corners and Century 21 SoWesCo have experience with investment properties in the Farmington market, while RE/MAX First Choice and Coldwell Banker Legacy also serve investors seeking Airbnb opportunities in the area. National services include AirDNA for market analysis and revenue projections, Mashvisor for investment property analytics, and BiggerPockets for connecting with local investors and agents. Awning provides property management services for Airbnb investors, while companies like RedAwning and Vacasa offer full-service short-term rental management in the Four Corners region. Local property management companies such as Four Corners Property Management and San Juan Property Services have expanded to include Airbnb management services for investors. Additionally, platforms like Roofstock and HomeUnion occasionally feature Farmington investment properties, and local mortgage brokers like First Financial Credit Union and San Juan Credit Union provide financing options specifically for investment properties in the Farmington area.