Real Estate investors looking for cash flow and appreciation are flocking to New Mexico to build rental portfolios. The Land of Enchantment State is a current favorite of real estate investors due to many factors including a strong and stable economy, a growing population and beautiful scenic markets perfect for vacation rentals. Easy Street Capital is proud to be a leading provider of rental property loans for real estate investors looking to build rental portfolios in New Mexico!
Types of Loans for Rental Properties
When it comes to real estate investing in New Mexico there are many markets and types of rental property loans to choose from. For investors adept at rehabbing properties, hard money renovation loans are a perfect choice! These rental loans allow you to buy a property quickly and finance your rehab costs as well! Once you are done, you can either “flip” the property for a quick profit or pursue the BRRRR Method by renting it out and then refinancing into a long-term, low-rate DSCR loan!
Long-term DSCR Loans are also great for investing in turnkey rental properties. Turnkey refers to properties that are rent-ready and require no rehab work. Move-in ready single-family homes and fully furnished vacation rentals are great for cash flow and price appreciation. Most DSCR Loans are fixed rates for thirty years, locking you into a fixed interest rate for a long time. If historical patterns continue, rents and appreciation increase steadily each year. But debt costs stay the same for fixed-rate 30-year loans. This means cash flow should increase every year of ownership for properties financed by a DSCR rental loan.
Investors in New Mexico’s rapidly evolving real estate market are delighted to discover the absence of prepayment penalties, allowing them the freedom to refinance as needed without any financial constraints. While it’s important to acknowledge that some lenders may adjust the interest rates slightly higher to account for this flexibility, the overall advantage of unrestricted refinancing options remains highly advantageous for investors.
Where To Invest In Real Estate In New Mexico
New Mexico is also a favorite market for real estate investors because of its diverse market options. There are lots of varying markets that offer great potential for each type of real estate investor. Albuquerque is the largest city in the state and home to the flagship university, University of New Mexico. Santa Fe is the state’s capital and fourth most populous. La Cruces is in the southern part of the state and experiences steady population growth. Rio Rancho offers a mix of residential and commercial properties and is the third most populous city in the state. Lastly, Taos is a popular destination for skiers in the winter and hikers in the summer!
Albuquerque
Albuquerque, the state’s largest city, boasts a population of over 560,000 residents. The Albuquerque metropolitan area is home to approximately 915,000 people, making it a bustling urban center. With a diverse economy that includes sectors such as aerospace, healthcare, and technology, Albuquerque offers a range of employment opportunities. The city is a hub for companies like Sandia National Laboratories, Presbyterian Healthcare Services, and Intel Corporation. These major employers create a stable job market and demand for rental properties.
The University of New Mexico is located in Albuquerque and attracts a large number of students each year. With its diverse academic programs and strong reputation, UNM serves as a prime location for real estate investors interested in student housing. The demand for rental properties near the university remains consistently high, providing a steady stream of potential tenants. Investors can capitalize on this by providing well-located and well-maintained housing options tailored to the needs of students. Additionally, Albuquerque’s thriving tourism industry attracts visitors to iconic attractions like the Albuquerque International Balloon Fiesta, the Indian Pueblo Cultural Center, and the Petroglyph National Monument. The city’s rich cultural heritage, vibrant arts scene, and sporting events provide opportunities for investors interested in short-term rental properties.
Furthermore, investors interested in student housing can take advantage of the favorable market conditions in Albuquerque, including the city’s affordable median house price of $321,411, as reported by Zillow. This affordability opens up exciting opportunities for real estate investors to acquire properties that cater to the growing demand for student housing near the University of New Mexico. With a strategic investment approach and a focus on providing quality housing options, investors can benefit from both rental income and the potential for long-term appreciation in this thriving market.
Santa Fe
Santa Fe, located in the heart of New Mexico, is a vibrant capital city known for its rich Spanish culture. With a population of over 89,000 people, Santa Fe is a popular destination for art enthusiasts, history buffs, and those seeking a unique Southwestern experience. The city is renowned for its adobe architecture, charming streets, and world-class art galleries. Santa Fe’s economy thrives on a diverse range of industries, including tourism, arts and crafts, healthcare, and government services. The city’s distinct blend of Native American, Spanish, and Western influences creates a captivating atmosphere that draws visitors from around the world. Additionally, Santa Fe’s favorable market conditions and relatively affordable housing options present an appealing opportunity for real estate investors looking to tap into the city’s tourism and cultural scene.
The rental market in Santa Fe is robust, driven by a combination of factors such as the city’s thriving art scene, rich cultural heritage, and tourism industry. Santa Fe’s reputation as a popular tourist destination, with attractions like the historic Plaza and world-renowned art galleries, ensures a consistent demand for both long-term and short-term rentals. Additionally, the presence of institutions like the Santa Fe Institute and the College of Santa Fe contributes to a steady need for rental properties.
Santa Fe’s real estate market offers lucrative investment opportunities, fueled by its renowned skiing attractions in winter. The city’s world-class ski resorts attract visitors, creating consistent demand for rental properties. Investors can capitalize on this seasonal influx, maximizing their returns.
Overall, Santa Fe’s enchanting landscapes, beautiful winters, and strong rental market make it an attractive destination for real estate investors. The city’s cultural attractions, and outdoor recreation opportunities position it as a promising market for those looking to invest in the New Mexico real estate market.
Las Cruces
Las Cruces, located in southern New Mexico, is a rapidly growing city with a population exceeding 113,800. It offers a vibrant community with a diverse range of economic opportunities. The city’s downtown area is a bustling hub of activity, featuring an array of shops, restaurants, and cultural attractions that appeal to both residents and tourists. With major employers such as Western Finance and Mesilla Valley Transportation, provides Las Cruces with a stable job market, making it an ideal location for real estate investors seeking long-term rental opportunities. Additionally, events like the Las Cruces International Mariachi Conference and the Whole Enchilada Fiesta bring in visitors and create potential for short-term rental income.
This city is also home to New Mexico State University, attracting a large community of over 25,000 students in search of quality student housing. Real estate investors with a focus on niche strategies, such as short-term rentals or student housing, can discover abundant opportunities in the thriving market of Las Cruces.
Las Cruces offers an incredibly affordable housing market, with median house prices averaging around $279,000, according to Redfin in February 2024. This presents an excellent opportunity for real estate investors looking to enter the market at an accessible price point. With the affordability of housing, investors can maximize their potential returns and cater to the strong demand for housing in Las Cruces.
Rio Rancho
Rio Rancho situated in the heart of the state, has a population exceeding 102,000 residents, making it one of the largest cities in New Mexico. The city prides itself on its diverse and thriving economy, with industries such as healthcare, technology, and education playing significant roles. Its strategic location near Albuquerque, about 34 minutes north, further enhances its appeal. With a growing population and a strong economic foundation, Rio Rancho presents a promising market for real estate investors looking for long-term rental properties.
Rio Rancho also boasts a range of cultural attractions and amenities for residents and visitors alike. The city is home to notable landmarks such as the Rio Rancho Events Center and the Santa Ana Star Casino, offering entertainment and recreational activities. Rio Rancho embraces its vibrant arts scene, with art galleries and community theaters showcasing local talent. The city’s growing craft brewery industry adds to its appeal, providing a unique experience for beer enthusiasts. With a mix of cultural offerings and recreational opportunities, Rio Rancho offers a diverse and enriching lifestyle for its residents.
Real estate investors can find promising investment opportunities in Rio Rancho. The city offers a range of options, with the median sales price for a single-family home in March 2024 reported at $348,000 by Redfin. Furthermore, Rio Rancho has a strong rental market, with the average market rent in April 2024 reaching $2,100 per month according to Zillow. The median market rent is up a very strong $50 year-over-year. This makes it an attractive market for investors seeking rental properties with potential for solid cash flow and returns.
Taos
Nestled in the enchanting landscape of northern New Mexico, Taos exudes a captivating allure with its breathtaking mountains. The town’s historic center showcases a vibrant atmosphere, brimming with unique shops, art galleries, and cultural venues. Taos is a renowned destination for outdoor enthusiasts, offering a myriad of activities such as skiing, hiking, and exploring the stunning landscapes of Taos Pueblo and Carson National Forest.
The blend of natural beauty, outdoor recreation, and cultural richness makes Taos an exceptional market for short-term rental investors. Visitors from around the globe flock to experience the town’s renowned ski resorts and immerse themselves in its charming mountain ambiance. Rental rates in Taos remain strong throughout the year, with peak seasons during the winter months when skiers and snow lovers converge on the slopes. The town’s calendar is filled with exciting events and festivals, including the Taos Solar Music Festival and the Taos Pueblo Powwow, drawing in additional visitors and creating lucrative opportunities for rental income.
According to AirDNA, a leading data provider for short-term rental investors, Taos boasts a strong market grade with above-average rental demand. Investors can expect an annual revenue of approximately $45,900! In addition, while thought of as a seasonal ski town, AirDNA projects an annual occupancy rate of 61%. Furthermore, Taos earned a great Market Grade of A+, and a score of 91/100 for “seasonality”. With a high occupancy rate throughout the year, this rating underscores the appeal of this ski town beyond the winter season. This ensures steady cash flow for short-term rental owners. Investors utilizing DSCR loans from forward-thinking lenders like Easy Street Capital, which consider AirDNA projections for income qualification, can capitalize on the market’s potential and maximize their returns.
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Ready to invest in real estate in New Mexico? Easy Street Capital is a top lender for loans for rental properties in New Mexico, both hard money rehabs and long-term investment properties.
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