Is Tesuque, New Mexico Good for Airbnb Investment?

To start an Airbnb in Tesuque, New Mexico, begin by researching Santa Fe County's short-term rental regulations, as Tesuque falls under county jurisdiction and typically requires a conditional use permit for properties zoned residential, along with a business registration and gross receipts tax permit from the New Mexico Taxation and Revenue Department. Contact Santa Fe County Planning Department to understand specific zoning requirements for your property location, as some areas may restrict short-term rentals entirely. Find a suitable property by working with local real estate agents familiar with Tesuque's market, focusing on properties with scenic views, proximity to Santa Fe Opera, or traditional Southwestern architecture that appeals to tourists, with average property prices ranging from $400,000-$800,000 as of 2023. Obtain necessary permits including the conditional use permit (typically $500-1,500), business license, and ensure compliance with fire safety codes and septic system requirements common in rural Tesuque properties. Furnish the property with Southwestern décor, high-quality linens, modern amenities like WiFi and air conditioning, and outdoor furniture to take advantage of New Mexico's climate, budgeting approximately $15,000-25,000 for a complete furnishing. List your property on Airbnb and VRBO with professional photography highlighting mountain views, adobe architecture, and proximity to Santa Fe attractions, setting competitive rates around $150-300 per night depending on size and amenities. Manage the property by establishing relationships with local cleaning services, maintenance contractors familiar with adobe construction and well water systems common in Tesuque, and consider hiring a property management company like Vacasa or RedAwning if you're not local, as they typically charge 20-35% of rental income but handle guest communication, cleaning coordination, and maintenance issues.

To identify profitable short-term rental properties in Tesuque, New Mexico, focus on properties within 10-15 minutes of Santa Fe Plaza and Canyon Road art district, as proximity to these tourist magnets drives demand. Target adobe-style homes, casas, or properties with authentic Southwestern architecture, outdoor spaces like patios or courtyards, mountain or desert views, and 2-4 bedrooms to accommodate families and groups visiting for art galleries, opera, and outdoor recreation. Analyze pricing using AirDNA and Mashvisor to benchmark against similar properties in Santa Fe and Tesuque, aiming for properties under $800K that can generate $150-250 per night during peak seasons (summer opera season and winter holidays). Research competition by studying existing STRs on Airbnb and VRBO within a 5-mile radius, noting occupancy rates, amenities, and guest reviews to identify market gaps. Utilize tools like Rabbu, BiggerPockets calculators, and local MLS data through Santa Fe Association of Realtors, while consulting with property management companies like Casago or RedAwning who understand Santa Fe County's STR regulations and seasonal tourism patterns driven by visitors to nearby attractions like Bandelier National Monument and Los Alamos.

To obtain an Airbnb/STR permit in Tesuque, New Mexico, you must apply through Santa Fe County since Tesuque is an unincorporated community within the county jurisdiction. Submit your application to the Santa Fe County Planning Division at 102 Grant Avenue, Santa Fe, NM 87501, or online through their permitting portal. Required documents include a completed short-term rental permit application, proof of property ownership or lease agreement, floor plan showing maximum occupancy, septic system inspection (if applicable), water quality test results, liability insurance certificate for minimum $1 million coverage, emergency contact information, and parking plan showing adequate off-street parking. The application fee is approximately $500 with an annual renewal fee of $300. You must also obtain a New Mexico gross receipts tax license and register with the Tourism Department. The approval timeline typically takes 60-90 days depending on completeness of application and any required inspections. Specific Tesuque requirements include adherence to rural zoning regulations, maximum occupancy limits based on septic capacity, quiet hours enforcement from 10 PM to 8 AM, and compliance with fire safety standards including smoke detectors and fire extinguishers. Properties must maintain rural character and cannot exceed 30% occupancy rate annually in some zones, and hosts must provide 24-hour contact information to neighbors and county officials.

Short-term rentals (STRs) in Tesuque, New Mexico operate under Santa Fe County regulations, as Tesuque is an unincorporated community within the county. As of 2023, Santa Fe County allows STRs but requires operators to obtain a conditional use permit and business registration, with properties limited to a maximum occupancy based on septic and water system capacity. The county implemented stricter regulations around 2021-2022 requiring permits, limiting the number of events, mandating parking requirements, and establishing quiet hours from 10 PM to 8 AM. STRs are generally prohibited in areas zoned for mobile home parks and some agricultural districts, while being allowed in residential and mixed-use zones with proper permitting. Recent changes have focused on addressing community concerns about noise, traffic, and housing availability, with the county requiring a 300-foot notification radius to neighbors before permit approval and implementing annual renewal requirements for all STR permits.

The best areas for Airbnb investment in Tesuque, New Mexico are the historic Tesuque Village area near the famous Tesuque Pueblo and Opera House district, which attracts cultural tourists visiting the pueblo's traditional crafts markets and attending Santa Fe Opera performances during the summer season from June through August. The Bishops Lodge Road corridor offers excellent potential due to its proximity to luxury resorts like Bishop's Lodge Ranch Resort & Spa, drawing visitors seeking high-end accommodations and spa experiences year-round. The Tesuque Creek and Rio En Medio areas are ideal for nature-focused rentals, appealing to hiking enthusiasts, artists on retreats, and visitors to nearby galleries and studios, particularly during the peak tourist seasons of summer and fall when outdoor activities and art tours are most popular. Properties near the Tesuque Flea Market location benefit from weekend visitors and collectors who frequent this renowned vintage and antique market, while areas close to the village center provide easy access to local restaurants and the short drive to downtown Santa Fe, making them attractive to business travelers and cultural tourists visiting museums, galleries, and attending events at venues like the Santa Fe Convention Center.

Airbnb properties in Tesuque, New Mexico are subject to multiple lodging taxes including the New Mexico Lodgers' Tax at 5%, Santa Fe County lodging tax at approximately 3-4%, and potentially additional municipal taxes if operating within incorporated areas. The state lodgers' tax is collected by the New Mexico Taxation and Revenue Department and must be remitted monthly by the 25th of the following month for stays, while county taxes are typically collected by Santa Fe County and follow similar monthly remittance schedules. Property owners must register with both state and county tax authorities, obtain lodging tax permits, and file returns even if no tax is due for a given period. Collections are made from guests at the time of booking or check-in, and hosts are responsible for calculating, collecting, and remitting these taxes unless using platforms like Airbnb that automatically collect and remit on behalf of hosts in participating jurisdictions. Exemptions may apply for stays exceeding 30 consecutive days, government employees on official business, and certain non-profit organizations, though documentation is typically required to qualify for these exemptions.

To start an Airbnb in Tesuque, New Mexico, expect total costs around $650,000-$750,000. Property purchase represents the largest expense at approximately $580,000-$650,000 based on median home prices in this upscale Santa Fe County area. Furnishing costs will run $25,000-$35,000 for quality furniture, bedding, kitchenware, and décor suitable for vacation rental guests. Initial setup including professional photography, listing creation, and marketing materials costs $2,000-$3,500. Permits and fees total $1,500-$2,500, covering business licenses, short-term rental permits from Santa Fe County, and tax registrations. Insurance including landlord and short-term rental coverage costs $3,000-$4,500 annually. Utility setup and deposits for electricity, gas, water, internet, and cable run $1,000-$1,500. First six months operating costs including utilities ($900/month), cleaning services ($150 per turnover), property management software ($50/month), maintenance reserves ($300/month), and marketing ($200/month) total approximately $9,600. Additional considerations include potential HOA fees, property taxes, and emergency repair funds that could add $5,000-$10,000 to initial capital requirements.

Airbnb properties in Tesuque, New Mexico typically generate annual revenues between $35,000-$65,000 for well-positioned properties, with average daily rates ranging from $150-$300 depending on property size and amenities. Operating expenses generally consume 40-50% of gross revenue, including cleaning fees ($75-$125 per turnover), property management (15-25% of revenue), utilities ($200-$400 monthly), insurance ($1,500-$3,000 annually), and maintenance costs averaging $3,000-$6,000 yearly. Net profit margins typically range from 25-35% for owner-operated properties, with successful hosts achieving occupancy rates of 60-75% annually. Key success factors include proximity to Santa Fe Opera (driving summer demand), authentic Southwestern architecture, outdoor amenities like hot tubs or fire pits, and professional photography showcasing mountain views. Properties within 2 miles of Tesuque Village Market and featuring traditional adobe construction command premium rates, with some luxury properties exceeding $400 nightly during peak seasons (June-September, December holidays). The market benefits from year-round appeal due to skiing proximity in winter and cultural tourism in summer, though hosts must navigate Santa Fe County's short-term rental regulations requiring business licenses and occupancy taxes of 8.4375%.

Airbnb investments in Tesuque, New Mexico typically generate annual ROI of 8-12% with cash-on-cash returns ranging from 6-10%, driven by the area's proximity to Santa Fe's art scene and outdoor recreation attractions. Properties in this upscale community, with average home values around $800,000-$1.2 million, can achieve gross rental yields of 4-7% annually, with occupancy rates averaging 65-75% throughout the year due to consistent tourist demand from visitors to nearby ski areas, hiking trails, and cultural sites. Initial profitability usually occurs within 18-24 months after accounting for furnishing costs, property management fees of 15-25%, and seasonal fluctuations, with peak earning months being June through September and December through February coinciding with summer tourism and winter sports seasons.

STRSearch is a leading national platform that specializes in identifying profitable short-term rental properties for investors looking in Tesuque, New Mexico. Local real estate agents serving the Santa Fe County area who focus on investment properties include Sotheby's International Realty Santa Fe, Barker Realty, and Santa Fe Properties, with agents like those at Keller Williams Realty Santa Fe often having experience with vacation rental investments. National services that can assist with Tesuque Airbnb investments include AirDNA for market analysis, Mashvisor for property analytics, BiggerPockets for investor networking, and Awning for short-term rental investment guidance. Local property management companies such as Santa Fe Vacation Rentals and Adobe Destinations can provide insights into profitable properties while offering management services. Investment-focused platforms like Roofstock and Fundrise may occasionally feature properties in the greater Santa Fe area, while local mortgage brokers and real estate investment groups in Santa Fe can provide financing and networking opportunities for investors targeting the Tesuque market.