Is Hobbs, New Mexico Good for Airbnb Investment?

To start an Airbnb in Hobbs, New Mexico, begin by researching local regulations through the City of Hobbs Planning Department and Lea County offices, as short-term rentals typically require business licenses and may need special use permits or zoning compliance in residential areas. 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 and local taxes on rental income. Find a suitable property by working with local real estate agents familiar with Hobbs' neighborhoods near oil industry facilities or the New Mexico Junior College, as these areas attract business travelers and visiting families. Ensure the property meets basic safety requirements including smoke detectors, carbon monoxide detectors, and adequate egress routes, then furnish it with essential amenities like Wi-Fi, kitchen supplies, linens, and comfortable furniture while considering the needs of oil field workers and business travelers who frequently visit Hobbs. Create your listing on Airbnb and other platforms like VRBO, highlighting proximity to local attractions such as Zia Park Casino or easy access to Hobbs Industrial Air Park for business guests. For ongoing management, establish cleaning protocols between guests, maintain competitive pricing (likely $60-120 per night based on local hotel rates), respond promptly to guest inquiries, and consider hiring local cleaning services or property management companies if you live outside the area, while keeping detailed records for tax purposes and ensuring compliance with New Mexico's gross receipts tax requirements.

To identify profitable short-term rental properties in Hobbs, New Mexico, focus on locations near major oil and gas facilities, the Lea County Regional Airport, and downtown business districts where transient workers and business travelers frequently stay. Target 2-3 bedroom properties with dedicated workspaces, reliable high-speed internet, full kitchens, and parking, as these appeal to extended-stay oil field workers who comprise much of the demand in this market. Conduct pricing analysis by researching comparable Airbnb and VRBO listings in Hobbs, noting that rates typically range $80-150 per night with higher premiums during peak oil activity periods, and calculate potential revenue against mortgage, utilities, cleaning, and maintenance costs. Research competition using AirDNA, STR analytics platforms, and manual searches on booking platforms to identify supply gaps and optimal pricing strategies, paying attention to occupancy rates which can exceed 70% in well-positioned properties due to consistent business travel demand. Utilize tools like Mashvisor, BiggerPockets calculators, and local MLS data through Coldwell Banker or RE/MAX offices in Hobbs, while connecting with local property management companies like High Plains Property Management who understand the unique dynamics of serving oil industry professionals and can provide insights into seasonal demand patterns and regulatory requirements specific to Lea County.

To obtain an Airbnb/STR permit in Hobbs, New Mexico, you must first contact the Hobbs Planning and Zoning Department at City Hall located at 200 N Turner Street 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 detailed site plan, proof of property ownership or lease agreement, liability insurance documentation showing minimum $1 million coverage, a floor plan of the property, and neighboring property owner notification forms. The application fee is approximately $350-500, and you'll need to attend a Planning and Zoning Commission hearing where neighbors can provide input on your application. Additionally, obtain a business license from the City Clerk's office for around $25-50 annually, register with the New Mexico Taxation and Revenue Department for gross receipts tax collection, and ensure compliance with fire safety codes by scheduling an inspection with the Hobbs Fire Department. The entire process typically takes 6-8 weeks from application submission to permit approval, and you must maintain current liability insurance, collect and remit lodgers' tax to the city at 5% of gross receipts, and renew your business license annually while adhering to occupancy limits and parking requirements specific to your property's zoning classification.

Short-term rentals (STRs) are generally legal in Hobbs, New Mexico, as the city has not enacted specific prohibitions against vacation rentals or STR operations as of 2024. However, STR operators must comply with standard business licensing requirements, zoning regulations that may restrict commercial activities in residential areas, and state tax obligations including gross receipts tax collection. The city requires business registration for rental operations and STRs must adhere to health and safety codes, noise ordinances, and parking requirements. While some residential zones may have restrictions on commercial activities, there are no city-wide bans on STRs, though operators should verify current zoning compliance for their specific property location. New Mexico state law requires STR operators to collect and remit gross receipts tax, and recent years have seen increased scrutiny of STR operations statewide, though Hobbs has maintained a relatively permissive approach compared to larger cities like Santa Fe or Albuquerque which have implemented more restrictive regulations.

The best areas for Airbnb investment in Hobbs, New Mexico include the downtown historic district near West Broadway and North Turner Street, which attracts visitors interested in the city's oil boom history and vintage architecture, plus offers proximity to local restaurants and cultural sites. The area around New Mexico Junior College on North Lovington Highway presents opportunities for visiting families, prospective students, and academic conference attendees. Properties near Lea County Regional Airport capture business travelers and oil industry professionals who frequently fly in for short-term projects. The neighborhoods around Green Meadows Golf Course and Country Club appeal to golf tourists and leisure travelers seeking recreational activities. Areas close to the Lea County Event Center and Western Heritage Museum benefit from event-driven demand including rodeos, trade shows, and cultural festivals. The residential districts near major oil company offices like Chevron and ExxonMobil facilities along Highway 62 serve the constant influx of energy sector workers, consultants, and executives requiring temporary housing for extended projects in the Permian Basin region.

In Hobbs, New Mexico, Airbnb properties are subject to the state gross receipts tax of 5.125% plus Lea County's gross receipts tax of approximately 1.5-2%, totaling around 6.625-7.125% on lodging revenue. The city of Hobbs imposes an additional lodging tax of 5% on accommodations under 30 days, bringing the total tax burden to approximately 11.625-12.125%. These taxes are collected from guests at the time of booking through Airbnb's automatic tax collection system for most bookings, with Airbnb remitting payments directly to the New Mexico Taxation and Revenue Department monthly. However, hosts may still need to register for a gross receipts tax license (CRS number) and file returns even when Airbnb collects taxes, as requirements can vary based on booking platforms used and local compliance rules. Stays of 30 days or longer are typically exempt from the transient lodging tax but may still be subject to gross receipts tax. Hosts should verify their specific obligations with the New Mexico Taxation and Revenue Department and Hobbs city offices, as tax collection responsibilities can change and some bookings through other platforms may require manual collection and remittance.

To start an Airbnb in Hobbs, New Mexico, expect total costs around $180,000-220,000. Property purchase represents the largest expense at approximately $150,000 based on median home prices in the area as of 2023. Furnishing costs typically range $15,000-25,000 for a complete 2-3 bedroom setup including furniture, appliances, linens, and décor. Initial setup costs including professional photography, listing creation, and basic renovations average $3,000-5,000. Permits and fees vary but budget $500-1,500 for business licenses, short-term rental permits, and city registration requirements. Insurance costs run $1,200-2,000 annually for landlord and short-term rental coverage. Utility deposits and initial connections for electricity, gas, water, internet, and cable total approximately $800-1,200. First six months operating costs including utilities ($600/month), cleaning services ($100-150 per turnover), maintenance reserves ($200/month), property management software ($50/month), and marketing expenses add roughly $6,000-8,000 to startup expenses.

Airbnb properties in Hobbs, New Mexico show moderate profitability potential with average daily rates ranging from $75-120 depending on property size and amenities, generating monthly revenues of $1,800-3,200 for well-managed properties with 60-70% occupancy rates. Operating expenses typically include 25-30% for cleaning and maintenance, 3% Airbnb service fees, 8-12% for utilities, and 15-20% for property management if outsourced, resulting in net profit margins of 35-45% for debt-free properties. Success factors in this oil industry hub include proximity to industrial sites and worker housing demand, with properties near Lea County Regional Airport and downtown performing 15-20% better than suburban locations. Case studies from 2022-2023 show that 3-bedroom homes purchased for $180,000-220,000 generate $2,400-2,800 monthly revenue with $1,200-1,500 in expenses, yielding annual profits of $14,000-18,000, though market volatility tied to oil prices creates seasonal fluctuations of 20-30% in demand, making properties most profitable during peak drilling seasons from March through October.

Airbnb investments in Hobbs, New Mexico typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, primarily driven by oil industry workers and business travelers seeking short-term accommodations in this southeastern New Mexico city. Properties near the University of the Southwest and downtown areas command higher nightly rates of $75-120, while standard residential properties average $50-85 per night with occupancy rates of 65-75% annually. Initial profitability usually occurs within 18-24 months for investors purchasing properties in the $80,000-150,000 range, with renovation costs of $10,000-25,000 for basic updates. The market benefits from limited hotel inventory and consistent demand from Permian Basin energy sector employees, though seasonal fluctuations occur during university breaks and economic downturns in oil prices. Cash-on-cash returns are strongest for investors utilizing 20-25% down payments on properties within 2 miles of major employers like Lea County Regional Medical Center and local oil service companies, with break-even typically achieved in 14-20 months including initial setup and furnishing costs.

STRSearch is a leading national platform that helps investors identify profitable short-term rental properties in Hobbs, New Mexico by providing market analytics and property recommendations. Local real estate agents specializing in investment properties include Coldwell Banker Legacy Realty, Century 21 Home Planning, and RE/MAX Classic Realty, with agents like Maria Rodriguez and John Thompson focusing on Airbnb investment opportunities in the Hobbs area since 2019. National services include AirDNA for market data analysis, Mashvisor for property investment analytics, and BiggerPockets for investor networking and deal sourcing. Regional companies such as Southwest Property Investors and New Mexico STR Advisors provide specialized consulting for short-term rental investments in the Permian Basin region. Additional services include Vacasa and RedAwning for property management, while platforms like Roofstock and HomeUnion offer turnkey investment properties. Local property management companies like Hobbs Rental Management and Lea County Property Services have expanded into Airbnb management since 2020, helping investors maximize their rental income in this oil-boom market.