New Mexico is home to many thriving short-term rental markets, but identifying the top-performing cities can be overwhelming, especially when combing through data from countless locations across the state.
To simplify this process, we analyzed data from markets statewide and compiled a list of the top 10 cities for investors and landlords seeking potentially high-return rental properties in the coming year.
As always, we recommend thorough underwriting and analysis of any prospective property and a review of local short-term rental regulations before making any investment decisions.
How We Created This List
First, we looked at all Airbnb listings in New Mexico that met the following criteria as of January 2025:
- Average Rating: 4.8 stars and above
- Guest Review Count: Minimum of 10
- Average Daily Rate: $1 (minimum) to $2,000 (maximum)
- Occupancy Rate: 1% (minimum) to 99% (maximum)
- Property Size: 1 to 10 bedrooms
- Property Type: Entire homes
We did this to eliminate Airbnb listings from our analysis that fall outside of what we consider "realistic" situations. This left us with a total of 3,508 Airbnb listings across the state of New Mexico to work with.
Next, we grouped these listings by city and eliminated markets that didn't have at least 75 Airbnb listings meeting the above criteria. We took this step to avoid outlier cities we felt didn't have enough data to be considered at this current time. This left us with 10 cities in New Mexico to rank.
Then, we needed to arrive at a gross yield number for each of our remaining cities in order to create our rankings. We did this by taking the average annual Airbnb revenue for each city and combining it with the cities median property value (from Zillow as of December 2024) to calculate our gross yield for each city.
Finally, we ordered the cities by highest gross yield.
The Top 10 STR Markets in New Mexico
1. Red River, NM
Nestled in the scenic mountains of New Mexico, Red River is a thriving destination for both tourists and real estate investors, boasting one of the best short-term rental markets. With attractions like the Red River Ski Area, vibrant summer music festivals, and the annual Fourth of July parade, it draws visitors year-round. The burgeoning tourism and popularity of vacation homes offer promising opportunities for rental income. Real estate investors will find plenty of potential for good return and cash flow in this charming town's housing market.
Key STR Metrics:
- Average Gross Yield: 10.3%
- Average Property Value: $620,251 (as of December 2024)
- Average Annual Revenue: $63,722 (past 12 months)
- Average Occupancy Rate: 40% (past 12 months)
- Qualifying Airbnbs: 77 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 88%
Find Airbnbs For Sale in Red River, NM →
2. Carlsbad, NM
Carlsbad, NM is a prime spot for short-term rental properties, offering real estate investors a lucrative opportunity in the thriving vacation rentals market. Known for the stunning Carlsbad Caverns National Park, it attracts tourists year-round. Visitors can enjoy annual events like the Carlsbad Fall Festival, boosting potential rental income for Airbnb hosts. With its robust tourism, Carlsbad’s housing market promises good returns and cash flow, making it one of the best places for real estate investing in vacation homes.
Key STR Metrics:
- Average Gross Yield: 8.8%
- Average Property Value: $339,420 (as of December 2024)
- Average Annual Revenue: $29,869 (past 12 months)
- Average Occupancy Rate: 43% (past 12 months)
- Qualifying Airbnbs: 99 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 163%
Find Airbnbs For Sale in Carlsbad, NM →
3. Silver City, NM
Silver City, NM, nestled in the scenic Southwest, offers a dynamic short-term rental market with strong tourism appeal. Attracting guests with its vibrant arts scene and historic downtown, it’s ideal for real estate investors seeking vacation homes. The picturesque Gila National Forest entices adventurers, while iconic sites like the Silver City Museum captivate history buffs. Popular events, such as the Silver City Blues Festival, lure tourists annually, enhancing rental income potential and ensuring a good return for Airbnb hosts and investors alike.
Key STR Metrics:
- Average Gross Yield: 8.3%
- Average Property Value: $358,905 (as of December 2024)
- Average Annual Revenue: $29,960 (past 12 months)
- Average Occupancy Rate: 45% (past 12 months)
- Qualifying Airbnbs: 81 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 74%
Find Airbnbs For Sale in Silver City, NM →
4. Ruidoso, NM
Ruidoso, NM, a hub for outdoor enthusiasts and nature lovers, is a top destination in the short-term rental market for 2025. With attractions like Ski Apache and the Lincoln National Forest, it offers year-round adventure and is ideal for vacation rentals. This vibrant area hosts events like the Ruidoso Art Festival and Ruidoso Downs horse racing, drawing tourists and providing Airbnb hosts with promising rental income. For real estate investors, Ruidoso's market offers good returns and strong cash flow from vacation homes, making it an attractive investment property locale.
Key STR Metrics:
- Average Gross Yield: 8.0%
- Average Property Value: $485,091 (as of December 2024)
- Average Annual Revenue: $38,659 (past 12 months)
- Average Occupancy Rate: 31% (past 12 months)
- Qualifying Airbnbs: 467 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 58%
Find Airbnbs For Sale in Ruidoso, NM →
5. El Prado, NM
El Prado, NM, nestled near the Sangre de Cristo Mountains, offers a lucrative short-term rental market perfect for real estate investors seeking strong rental income. This charming area is close to popular attractions like Taos Pueblo and the Rio Grande Gorge Bridge, drawing tourists year-round. Outdoor enthusiasts flock here for skiing at Taos Ski Valley and hiking excursions. Artistic events at Taos Art Museum and annual festivals provide consistent tourism, making it one of the best places for vacation homes and STR success, with potential for good return and cash flow.
Key STR Metrics:
- Average Gross Yield: 7.0%
- Average Property Value: $749,832 (as of December 2024)
- Average Annual Revenue: $52,438 (past 12 months)
- Average Occupancy Rate: 46% (past 12 months)
- Qualifying Airbnbs: 164 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 121%
Find Airbnbs For Sale in El Prado, NM →
6. Albuquerque, NM
Albuquerque, NM, is a vibrant city known for its blend of cultural heritage and natural beauty, making it one of the best places for short-term rental investments. The city's main attractions, such as the iconic Sandia Peak Tramway and the annual Albuquerque International Balloon Fiesta, draw thousands of tourists each year. With a thriving housing market, real estate investors eye the region for its potential in generating rental income and good cash flow. The presence of sports teams like New Mexico United further boosts tourism, offering Airbnb hosts ample opportunities in the STR market.
Key STR Metrics:
- Average Gross Yield: 6.8%
- Average Property Value: $460,650 (as of December 2024)
- Average Annual Revenue: $31,359 (past 12 months)
- Average Occupancy Rate: 44% (past 12 months)
- Qualifying Airbnbs: 1,086 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 84%
Find Airbnbs For Sale in Albuquerque, NM →
7. Cloudcroft, NM
Nestled in the picturesque Sacramento Mountains, Cloudcroft, NM is a hidden gem for short-term rental properties, offering a lucrative opportunity for real estate investors seeking a good return. With charming vacation homes and abundant attractions, including ski resorts, hiking trails, and the renowned Mexican Canyon Trestle, tourists are drawn year-round. This thriving short-term rental market also hosts vibrant events like the Acoustic Festival. Real estate investing in Cloudcroft promises cash flow, making it a hotspot for Airbnb hosts and keen visitors.
Key STR Metrics:
- Average Gross Yield: 6.6%
- Average Property Value: $471,485 (as of December 2024)
- Average Annual Revenue: $30,964 (past 12 months)
- Average Occupancy Rate: 40% (past 12 months)
- Qualifying Airbnbs: 100 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 120%
Find Airbnbs For Sale in Cloudcroft, NM →
8. Taos, NM
Taos, NM is a prime spot for real estate investors eyeing the short-term rental market due to its rich cultural allure and outdoor attractions. Known for its artistic vibe, Taos Pueblo, a UNESCO World Heritage Site, draws tourists year-round, while nearby Taos Ski Valley offers winter sports for adventure seekers. With events like the annual Taos Fall Arts Festival and vibrant local markets, vacation homes here promise strong rental income. The area's diverse tourism makes it one of the best places for vacation rentals, offering a good return for real estate investing.
Key STR Metrics:
- Average Gross Yield: 6.5%
- Average Property Value: $668,144 (as of December 2024)
- Average Annual Revenue: $43,526 (past 12 months)
- Average Occupancy Rate: 44% (past 12 months)
- Qualifying Airbnbs: 135 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 55%
Find Airbnbs For Sale in Taos, NM →
9. Santa Fe, NM
Santa Fe, NM, is a top choice for the short-term rental market, attracting tourists with its rich history and vibrant arts scene. Visitors can explore iconic attractions like the Santa Fe Opera, Georgia O'Keeffe Museum, and the annual Santa Fe Indian Market. For sports enthusiasts, the Santa Fe Fuego baseball team offers thrilling local games. The city's tourism and unique cultural events make it ideal for real estate investors seeking rental income and good return. Santa Fe's thriving vacation homes and Airbnb scene offer excellent cash flow opportunities for investors.
Key STR Metrics:
- Average Gross Yield: 6.4%
- Average Property Value: $1,017,498 (as of December 2024)
- Average Annual Revenue: $65,030 (past 12 months)
- Average Occupancy Rate: 50% (past 12 months)
- Qualifying Airbnbs: 1,027 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 58%
Find Airbnbs For Sale in Santa Fe, NM →
10. Angel Fire, NM
Angel Fire, NM is a premier destination for short-term rental properties, offering lucrative opportunities in the vacation rentals market. Nestled in the Sangre de Cristo Mountains, this picturesque village attracts tourists year-round with skiing and snowboarding at Angel Fire Resort, golfing, and fishing. Special events like the Angel Fire Balloon Rally draw crowds, boosting rental income potential for Airbnb hosts. With its vibrant tourism scene, investors find this real estate market among the best places for good return and cash flow in vacation homes and investment property.
Key STR Metrics:
- Average Gross Yield: 5.9%
- Average Property Value: $776,946 (as of December 2024)
- Average Annual Revenue: $46,202 (past 12 months)
- Average Occupancy Rate: 29% (past 12 months)
- Qualifying Airbnbs: 272 (as of January 2025)
- Year-Over-Year Growth in Airbnbs: 96%