Why Finding a Short-Term Rental Investment Property Is So Complicated — Especially in Santa Fe

If you spend any time online watching real estate investing content, it’s easy to believe that short-term rentals are the ultimate path to easy returns.

You’ll see influencers sharing impressive numbers, beautifully styled properties, and simple formulas that make short-term rentals feel effortless — even romantic.

But here’s the reality many buyers don’t realize:

Those investors are almost never operating in cities like Santa Fe, or in many U.S. cities that have created increasingly restrictive short-term rental regulations.

And that difference changes everything.

Why Cities Like Santa Fe Regulate Short-Term Rentals

Santa Fe’s short-term rental ordinance exists to balance tourism with livability.

The intent is to:

• Protect residential neighborhoods
  
  

• Preserve housing availability for long-term residents
  
  

• Reduce noise, traffic, and parking impacts
  
  

• Ensure safety, accountability, and tax compliance
  
  

These rules aren’t anti-investor. They’re designed to protect quality of life for people who actually live here.

Understanding that context is key to understanding why short-term rental investing in Santa Fe is complex.

The Real Complexity of Short-Term Rentals in Santa Fe

Most buyers are surprised to learn that securing a short-term rental isn’t just about finding the right property — it’s about understanding zoning, permits, and long-term compliance before you buy.

Here are some of the biggest hurdles buyers face:

1. Short-Term Rental Permits Never Transfer

This is one of the most misunderstood aspects of investing in Santa Fe.

Short-term rental permits do not transfer with a property — ever.

If a property is sold, the permit terminates and reverts back to the City of Santa Fe. A new owner must apply for a new permit, and that application is subject to:

• Permit availability
  
  

• Proximity rules
  
  

• Zoning requirements
  
  

Even if a property is currently operating as a short-term rental, that does not mean the next owner will be able to do the same.

2. Zoning Can Change the Rules Entirely

While most residentially zoned properties require a short-term rental permit, some commercially zoned properties do not.

In certain zoning districts, short-term rentals may be allowed without a permit, instead operating under different registration or business license requirements.

A well-known example is Fort Marcy Condominiums, which is zoned BCD (Business Capitol District). Because of this commercial zoning, short-term rental permits are not required there — a major reason those units are often attractive to investors.

This is a perfect example of why zoning knowledge matters just as much as the property itself.

3. There Is a Hard Cap on Residential Permits

In residential zones, Santa Fe limits the total number of short-term rental permits available citywide. Once that cap is reached, new applicants are placed on a waiting list, with no guaranteed timeline.

Buying a home hoping a permit becomes available later is a risky strategy.

4. One Permit Per Natural Person

Santa Fe limits each natural person to a single short-term rental permit. This restriction is intentionally designed to prevent large-scale speculation and preserve housing stock for residents.

5. Short-Term Rentals Are Not Passive Income

Even when legally permitted, operating a short-term rental requires ongoing involvement:

• A local operator available 24/7 who can arrive within one hour
  
  

• Inspections and safety compliance
  
  

• Parking and occupancy limits
  
  

• Noise restrictions
  
  

• Lodgers’ tax, gross receipts tax, and income tax
  
  

• Annual renewals and record-keeping
  
  

This is hospitality plus regulation — not hands-off investing.

The Influencer Gap: Why Online Advice Often Doesn’t Apply Here

Many buyers arrive with expectations shaped by online success stories.

But most of those examples come from:

• Lightly regulated markets
  
  

• Areas without permit caps
  
  

• Cities without proximity rules
  
  

• Places where zoning is far more permissive
  
  

When you apply those strategies to Santa Fe, the math — and the risk — changes dramatically.

Why a Savvy Realtor Is Essential

This is where local expertise becomes invaluable.

A savvy Realtor helps buyers:

• Understand what is legally possible before they purchase
  
  

• Identify properties where short-term rentals are structurally viable — or not
  
  

• Navigate zoning distinctions that dramatically affect value
  
  

• Explore alternative strategies that align with Santa Fe’s regulatory landscape
  
  

That guidance can prevent costly mistakes and open doors buyers didn’t even know to look for.

Broadening the Investment Conversation

Here’s what many buyers need permission to hear:

There is nothing inherently magical about a short-term rental.

What is powerful is:

• Predictable income
  
  

• Reduced stress
  
  

• Fewer regulatory hurdles
  
  

• A strategy that works with the city, not against it
  
  

Short-term rentals are just one option — and often not the best or only one.

A Final Thought

We want you to live your dream.

We also want you to understand the cost that dream may create — in terms of stress, time management, compliance, and ongoing responsibility.

Santa Fe rewards thoughtful, informed investment. And when buyers approach the market with clarity instead of hype, they’re far more likely to succeed