Expert InvestorsReal Estate 101

Should Real Estate Investors Consider Santa Fe, NM?

Pros and Cons of Investing in New Mexico’s Real Estate Market

Santa Fe’s housing market is booming – opening the door for investors to see success with different types of real estate investments. Part of the reason the city’s real estate market is considered a great option for New Mexico real estate investments is because of its continued growth.

The 2020 Census indicated Santa Fe’s population was 86,099. Since then, Santa Fe’s population has increased by 6.28%, and it’s growing at a rate of 0.55% annually. Santa Fe County’s population growth tells a similar story with an estimated population of 152,149 and a growth rate of 0.39% over the past year.

This population growth is one big reason that home appreciation rates in Santa Fe continue to be among the highest in the United States at 21% in the last 12 months. Home appreciation rates are expected to continue increasing over 2022.

Santa Fe’s Hot Investment Markets

Like other markets in the southwest – Las Vegas, Phoenix, and San Antonio – Santa Fe’s real estate market inventory is tight, but there is no shortage of opportunities for real estate investors.

Santa Fe has a large rental population, with about one third of its residents living in rental property, making it a great city to invest in rental properties. The city’s housing affordability index is around 80 – the average would be 100 – meaning a large portion of the population can’t afford to own a home, driving them to opt for renting.

Six colleges in the area – four private and two public – give investors the option to diversify their portfolios by owning long-term rental properties catering to students and visiting faculty and staff. Additionally, real estate investors can take advantage of Santa Fe’s booming multifamily and fix and flip markets.

New Mexico’s multifamily rental market is in high demand post-pandemic. The state’s strong job market and economic growth have led to a surge in demand for multifamily rentals. Currently, Santa Fe is underserved by nearly 7,000 multifamily units, leaving opportunity for those looking to invest in multifamily properties.

Fix and flip loans, rehab loans, and bridge loans are some of the most popular real estate hard money loans in Santa Fe, which means private lenders in New Mexico like Lima One are working tirelessly to help investors – especially those interested in the B.R.R.R. method – find and fund their fix and flip projects.

Reasons to Invest in Santa Fe

There are numerous reasons to purchase investment property in Santa Fe, NM. The city is rich in culture and history, which drives the majority of Santa Fe’s tourism industry, but the city’s economy has rebounded well post-pandemic helping to make it one of the best cities for real estate investing.

Post-pandemic, Santa Fe’s unemployment rate has decreased significantly from 10% in May 2020 (height of the pandemic) to 6% in May 2021 to 3.5% in May 2022, according to the Bureau of Labor Statistics.

In 2018, the City of Santa Fe opened the door for real estate investors to see even more success in the city when it applied to have seven economically distressed tracts designed as opportunity zones.

Federal Opportunity Zones are a community program designed to encourage long-term real estate investments in low-income urban and rural areas. The program provides tax incentives to investors who reinvest their unrealized capital gains into opportunity funds dedicated to investing into designated opportunity zones.

The Land of Opportunity 

Investors can find a lot of investment opportunities in Santa Fe. The city has a booming fix and flip market, its multifamily market is on pace to surpass Albuquerque in available units, and its recent adoption of opportunity zones has given investors a way to breathe life into distressed areas.

As you consider purchasing investment properties Santa Fe’s real estate market, finding the right lender is near the top of priorities. It’s crucial to remember that not all fix and flip lenders are the same, and not all hard money rental loans will give you the coverage and latitude you need.

It’s important to find a private lender that has your goals and strategies in mind through the lending process. When it comes to financing for real estate investors, Lima One Capital offers a robust suite of products designed to help every investor regardless of their investment strategy.

Our clients have different investment strategies, so we have designed our loan options to allow us to cater to their individualized needs. Contact us today to discuss your next deal, or if you have a deal in hand, accelerate the process by applying now.