Albuquerque: Should we invest during COVID?

Question

My husband and I are interested in buying our first rental property (single family home < 300k) in ABQ, but live out of state. We have family that live in ABQ that can help us. We'd love some opinions on any of the following:

• 1. Are properties still renting out well, or are vacancy rates higher due to the pandemic? Is now a good time to buy with COVID?
• 2. What are some good class B and C neighborhoods to look into?
• 3. We are also very open to recommendations for a realtor or lender

Would love any input you have. Thank you!

Guy Gemmer · Answer

@Michelle Akazawa So the rental market is quite interesting at the moment. Supply is low, demand is high but rents have a ceiling. Like everyone here has said, things move fast and for more money than ever. What does that mean?

And, all levels of government and 501c3 orgs are giving out rent assistance. What does that mean?

Does that mean the stars are aligned for investment property purchases? 🤔

The realtor me says, “When can you get money this easily and inexpensively? Leverage that and use OPM to retire!”

Property Manager me says, “Carrrreeeeeeful.”

The short term me says, “Sell, sell, sell! Wait for a drop!”

The rational me says, “Get a good deal, leverage OPM, study what demographics are most impacted by Covie and avoid rental property that they would likely occupy. Real estate investing is never a guessing game.”

So, what’s that mean?

Jens Nielsen · Answer

Hi @Michelle AkazawaI'm pretty active in Albuquerque, we own 75 units there.I can tell you that there is high demand for rentals at the moment, and investors are buying rentals, especially apartments at high valuations.

I like the area around Nob Hill, NE heights and uptown. But it's a big city with many different neighborhoods so finding a knowledgeable local person is important.

Joshua Young · Answer

@Michelle Akazawa echoing what @Jens Nielsen said, Albuquerque has a very strong rental market. Just last week I helped a client rent out a MF property (open house style) and we had 15 people show up and all the units were rented that day. Granted of course it depends what you have and the price range.

As far as neighborhoods are concerned, Nob Hill and NE Heights are both great areas as well as Academy West and around Roosevelt Park and Spruce Park.

I hope that helps.

Patrick Torres · Answer

@Cindy Wang

If you look back through the forums mentioning Albuquerque you will find several discussions about the SE side of town.  In summary it is one of the more challenging areas in town to invest in due to the tenant base, but if you buy right you can certainly still make money there.  It has the highest density of multi family properties in the city and typically the properties in that area are the cheapest per door.  On paper those properties can look better than they really are due to higher than anticipated costs, consider using conservative figures when running your numbers on these properties.

Troy Larson · Answer

@Michelle Akazawa ABQ has a great rental market. The areas mentioned, such as Nob Hill, NE Heights and Academy West are all great areas. Don't overlook Rio Rancho and West ABQ.

Just be sure you look at GRM and market rents to get an idea of the property potential. No matter what area, the property needs to make sense to your budget.

Joshua Young · Answer

@Joshua Larson

As Troy pointed out, there is a lot of extra work and expenses that come with maintaining a license in NM. If you are planning on being an actual real estate broker then by all means but if you are simply looking for MLS access, I don't think it's necessary to be licensed. One thing you also want to think about is, if you have a license and are acting as an investor, you still must disclose that you are licensed in NM as a broker which can come with its own set of consequences.

If it's MLS access you are looking for, the best way is to build a relationship with a broker who can provide you more detailed information if there is any to be had.

Great first name! :)

Troy Larson · Answer

Hi @Joshua Larson;

In New Mexico, you will need to maintain Association membership in order to access the MLS. This means paying dues to the local Association along with MLS dues. You will also have to meet continuing education requirements and in order to practice, you will need to find a Qualifying Broker to work with.

I did my pre-licensing education at Kaplan. I passed both local and national portions of the test the first attempt, so it was good education.

Great last name!

Hope Hatton · Answer

Cindy, I agree with Patrick's comments on SouthEast ABQ as far as tenant base, but the higher than anticipated repair and maintenance costs seem to be true of a lot of the small multifamilies in this area. So no matter where in ABQ you look, avoid the flat roofed pueblo style and the rooftop swamp coolers if you can...also many of those type homes older than 1970s seem to have not only lead based paint, but also asbestos in the walls. They are expensive to remediate when doing any kind of remodeling. Spend the extra money on different types of home inspections before buying and you may save a lot of $$ and headaches later on! I'm not trying to be a complete downer...ABQ is reasonably priced for beginner investors, and the rental market still seems very good even with Covid...rents are kind of on the low side, but people can afford them and a multifamily can still turn a small profit, as long as you avoid properties with those high price tag issues I described.

Cindy Wang · Answer

@Patrick Torres

Thanks so much. I had some trouble finding posts about Albuquerque, but I also realized I wasn't searching with the ABQ abbreviation.  Of the multis with high cap rates, they've all been in the south. Now I know why

Hope Hatton · Answer

Wow, I'd like to add to this thread, but everyone has already said exactly what I would say!! Besides the rental market being strong, the Bernalillo CARES Act website just extended their online application process thru December, so even existing tenants that are having difficulty with job, rent, or utilities can get aid.

PS- I will be getting a real estate license in ABQ before the end of the year! taking the NM class next week, then the state license test, then I'll probably upgrade to a premium membership so I can help people more directly!

Albuquerque: Should we invest during COVID?

Most Popular Reply