Alamogordo is home to the best residential real estate investment market in New Mexico.
The 88310 zip code in Alamogordo presents the greatest opportunity for the best real estate investments among the 1,708 individual real estate markets in New Mexico we evaluated. We looked at property values, population trends, and six other metrics for each market. We used that data to calculate each market's InvestScore.
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Data sources
Most of the data in this article comes from the Zillow Home Value Index and the U.S. Census American Community Survey.
We update our data when the original sources update their data, usually monthly. Sometimes we'll update data more frequently.
Clever also performs regular quality checks to identify outdated data, broken data connections, and other data issues that may arise.
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5 best places to invest in New Mexico
| Rank | City | InvestScore | Affordability | Property value appreciation |
|---|---|---|---|---|
| 1 | Alamogordo | 100 | 3.8 | 49% |
| 2 | Grants | 87.8 | 2.3 | 29% |
| 3 | Tucumcari | 86.4 | 1.6 | 16% |
| 4 | Farmington | 85.5 | 4.0 | 47% |
| 5 | Raton | 85.1 | 2.7 | 28% |
🚨 This article is for informational purposes only. It isn't intended to convey financial or legal advice. We recommend you talk to a real estate agent or real estate attorney when buying a home in New Mexico.
1. Alamogordo
We've identified the 88310 zip code in Alamogordo as New Mexico's best real estate investment market. Here's why.
🔎 Key data about Alamogordo (88310)
| Data point | Value | Rank in state (of 1,708 markets) |
|---|---|---|
| InvestScore | 100 | Highest |
| Typical property value | $215,209[1] | 14th lowest |
| Five-year appreciation | 49%[2] | 6th highest |
| Household income | $57,214[3] | 45th highest |
| Affordability ratio | 3.8 | 16th most affordable |
| Five-year population growth | 0.7%[4] | 27th highest |
| Unemployment rate | 2.8%[5] | lowest |
| Property taxes | $1,089[6] | 16th lowest |
| Educational attainment | 26%[7] | 40th highest |
Alamogordo (zip code 88310) is the best residential real estate investment market in New Mexico. It has the 6th highest property value appreciation among markets we evaluated, with a 49% appreciation of the typical property over the last five years.
Alamogordo is the 16th most affordable market among the 1,708 New Mexico markets we evaluated, with an affordability ratio of 3.8.
2. Grants
The 87020 zip code in Grants is the runner-up spot for the best real estate investments in New Mexico.
🔎 Key data about Grants (87020)
| Data point | Value | Rank in state (of 1,708 markets) |
|---|---|---|
| InvestScore | 87.8 | 2nd highest |
| Typical property value | $146,467[1] | 5th lowest |
| Five-year appreciation | 29%[2] | 45th highest |
| Household income | $62,746[3] | 35th highest |
| Affordability ratio | 2.3 | 2nd most affordable |
| Five-year population growth | 0.8%[4] | 26th highest |
| Unemployment rate | 2.8%[5] | lowest |
| Property taxes | $1,197[6] | 24th lowest |
| Educational attainment | 19%[7] | 53rd highest |
The 87020 zip code in Grants features a typical property value of $146,467, the 5th lowest in the state.
Property values have appreciated 29% over the past five years, the 45th highest increase among evaluated markets in the state. Grants homes have an affordability ratio of 2.3, the 2nd most affordable in the state.
3. Tucumcari
The 88401 zip code in Tucumcari comes in at No. 3 in our ranking of the best residential real estate investment markets in New Mexico.
🔎 Key data about Tucumcari (88401)
| Data point | Value | Rank in state (of 1,708 markets) |
|---|---|---|
| InvestScore | 86.4 | 3rd highest |
| Typical property value | $77,642[1] | lowest |
| Five-year appreciation | 16%[2] | 57th highest |
| Household income | $49,345[3] | 57th highest |
| Affordability ratio | 1.6 | most affordable |
| Five-year population growth | 1.9%[4] | 18th highest |
| Unemployment rate | 2.8%[5] | lowest |
| Property taxes | $535[6] | 2nd lowest |
| Educational attainment | 20%[7] | 50th highest |
With a typical property value of $77,642, Tucumcari's 88401 zip code features the lowest property values in the state.
Tucumcari homes have an affordability ratio of 1.6, the most affordable among the markets we evaluated.
4. Farmington
The 87402 zip code in Farmington ranks No. 4 among New Mexico's residential real estate investment markets.
🔎 Key data about Farmington (87402)
| Data point | Value | Rank in state (of 1,708 markets) |
|---|---|---|
| InvestScore | 85.5 | 4th highest |
| Typical property value | $317,834[1] | 41st lowest |
| Five-year appreciation | 47%[2] | 9th highest |
| Household income | $79,461[3] | 9th highest |
| Affordability ratio | 4.0 | 19th most affordable |
| Five-year population growth | 3.8%[4] | 11th highest |
| Unemployment rate | 4.7%[5] | 4th lowest |
| Property taxes | $1,684[6] | 41st lowest |
| Educational attainment | 28%[7] | 38th highest |
Property values in Farmington's 87402 zip code have seen the 9th highest increase among evaluated markets in the state, with an appreciation of 47% over the past five years.
Farmington's affordability ratio of 4.0 makes it the 19th most affordable among the 1,708 markets we evaluated.
5. Raton
The 87740 zip code in Raton rounds out our top five residential real estate investment markets in New Mexico.
🔎 Key data about Raton (87740)
| Data point | Value | Rank in state (of 1,708 markets) |
|---|---|---|
| InvestScore | 85.1 | 5th highest |
| Typical property value | $143,796[1] | 4th lowest |
| Five-year appreciation | 28%[2] | 47th highest |
| Household income | $52,815[3] | 47th highest |
| Affordability ratio | 2.7 | 5th most affordable |
| Five-year population growth | 0.3%[4] | 33rd highest |
| Unemployment rate | 2.8%[5] | lowest |
| Property taxes | $753[6] | 7th lowest |
| Educational attainment | 21%[7] | 47th highest |
Property values in Raton's 87740 zip code rose 28% over the last five years, ranking the city 47th highest among evaluated markets in New Mexico.
Raton homes have an affordability ratio of 2.7, the 5th most affordable among the markets we evaluated.
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Frequently asked questions
See our article Steps to Buying Your First Rental Property to learn the basics of real estate investing for beginners.
You'll learn the importance of setting goals, picking the right market, and more.
Cash investors often use what's called the 70% rule, which suggests they should pay around 70% of a house's after-repair value minus the cost of renovations.
By buying for about 70% of the after-repair value, they're positioning themselves to pay for repairs and other costs, and to lock in a profit.
The 70% rule isn’t a hard-and-fast formula, but a quick guideline investors use to evaluate potential deals.
Investing in residential real estate can be one of the best passive real estate investments in New Mexico.
Residential real estate offers accessible passive income and the potential to compound your original investment.
Renting out residential units is the top way to invest in real estate. House hacking also offers a great opportunity for passive real estate investment income.
How we rank residential real estate markets in New Mexico
To determine the best real estate investments in New Mexico we evaluated 1,708 markets on eight metrics, and then assigned an InvestScore based on a proprietary weighting framework. Each market corresponds to a specific zip code in New Mexico.
What is InvestScore?
InvestScore is a score on a scale of 0 (worst in state) to 100 (best in state) that estimates the residential real estate investment potential of a given market. It takes into account a suite of key data points for each city.
- Typical property value: This measures the typical home value in this zip code, according to the Zillow Home Value Index. It reflects the typical value for homes in the 35th to 65th percentile range, including all homes, with the numbers smoothed and seasonally adjusted. We prefer lower property values, which indicate both more room for growth and a greater ease of purchase.
- Property value appreciation: This measures how much property values have increased in the area over the past five years, according to the Zillow Home Value Index. We prefer a higher appreciation, as it indicates better returns on housing. However, past performance isn't indicative of future results.
- Median household income: This is the inflation-adjusted median household income in the zip code, according to U.S. Census American Community Survey data. We prefer a higher household income, as it indicates local residents have more income to spend on housing.
- Affordability ratio: This is the ratio of the typical home value to the median household income in the area. A lower ratio is better because it means more households can afford a home, which indicates higher demand.
- Population growth: This is how much the area's population has grown over the past five years, according to U.S. Census estimates. Higher is better, as it indicates residents are moving into the area at a rapid clip.
- Unemployment rate: This is the unemployment rate in the area, according to U.S. Census data. We prefer a lower rate, as it indicates the availability of steady employment in the area, meaning residents will find it much easier to afford homes.
- Property tax: This is the median real estate property tax paid in the area, according to U.S. Census estimates.
- Educational attainment: This is the percentage of residents in the area that have obtained a bachelor's degree or better, according to U.S. Census estimates. We prefer a higher rate because it indicates local residents who have higher earning potential and thus should be able to afford homes.
