Ruidoso Vacation Rental ROI: What Investors Should Know

Thinking about buying a cabin or condo to rent in Ruidoso and wondering what the numbers might look like? You are not alone. Many investors see the mountain setting and year-round recreation and ask how to model realistic returns. In this guide, you will learn what drives demand, how to estimate revenue and costs, what rules and taxes apply, and a simple framework to underwrite your deal with confidence. Let’s dive in.

Why Ruidoso attracts STR demand

Ruidoso is a mountain resort community built around outdoor recreation, the Village’s dining and shops, and popular events at Ruidoso Downs. Winter and summer drive most bookings, while shoulder seasons can fill with festivals and race-weekends. State travel interest also supports visitation across the year. You can explore broader tourism context with the New Mexico Tourism Department for insights into seasonal travel patterns statewide.

A major winter driver is Ski Apache. Properties closer to the ski area often see stronger winter occupancy and can command premium holiday rates. Proximity to the Village’s amenities also matters, since guests value easy access to restaurants, groceries, and shops.

What drives ROI in Ruidoso

Rates and occupancy basics

Average daily rate and occupancy vary by property type, location, and season. Detached cabins that sleep families or groups often command higher average rates than small condos. Expect strong weekend and holiday demand in winter and summer. Weekdays and shoulder months usually run lighter.

Annual occupancy in mountain towns can swing widely. A broad range of 30 to 70 percent is common depending on product and marketing. Before you buy, pull neighborhood-level data from an industry provider such as AirDNA or STR so you can model ADR and occupancy by month, not only annual averages.

Location and features that add revenue

Guests pay for convenience, comfort, and memorable features. Look for:

• Short drive to Ski Apache and the Village
• Good year-round road access and winter plowing history
• Mountain views or privacy
• Hot tub, fireplace, and ample parking
• Flexible sleeping capacity for groups and families (for example, sleeps 6 to 10)
• Fast Wi‑Fi and updated, durable interiors that hold up to frequent use

Costs to model in Ruidoso

Management and cleanings

Professional property management in resort markets often runs about 18 to 30 percent of booking revenue for full-service programs. Strong managers bring dynamic pricing, distribution, and guest service that can boost yield. Compare fee structures and local experience, including winter logistics like snow removal and guest access.

Cleaning fees are often charged to guests, but you should still model them as a cost. Turnover pricing varies by size and location. Small condos may run roughly 50 to 125 dollars per clean. Larger cabins often run 125 to 300 dollars or more, especially if crews travel farther or handle linens.

Utilities, maintenance, and reserves

Plan for higher winter utilities. Electric heat and supplemental propane can spike in cold months. Budget for water, sewer, internet, and streaming services since fast Wi‑Fi is now a guest expectation.

Include a maintenance and replacement reserve for linens, small appliances, HVAC servicing, deck and hot tub upkeep, and seasonal prep. A common rule of thumb is 5 to 10 percent of revenue or a fixed annual reserve depending on property age and size.

Insurance, taxes, and HOA

Confirm that your policy allows short-term rental use and covers liability. Many standard homeowner policies exclude commercial rental activity, so a vacation-rental policy or umbrella policy is wise.

Property taxes and any HOA dues are fixed expenses. Always review HOA governing documents for short-term rental rules before you make an offer. For local guidance on permitting, business registration, or zoning, start with the Village of Ruidoso and Lincoln County official sites.

Rules and taxes you must follow

Permits and registration

Short-term rental rules vary by municipality and county. Confirm whether your property falls under the Village of Ruidoso or Lincoln County and ask about any STR registration, occupancy limits, or business license needs. Contact the Village planning or business license office and the County zoning office to verify current requirements.

HOAs can also restrict rentals. Review covenants and any registration or fees tied to STR use before you proceed.

Lodging and gross receipts taxes

Short-term rentals in New Mexico are typically subject to state gross receipts tax and local lodgers’ tax. Register and confirm filing rules with the New Mexico Taxation & Revenue Department. The Village or County finance office can confirm any local add-on rates and remittance steps. Price your listing to collect these taxes at booking and remit on schedule.

A simple underwriting framework

Step by step

Use this practical approach to estimate income and expenses with a conservative tilt:

1. Establish realistic comps.
   • Pull ADR and occupancy by month from AirDNA or STR for your specific neighborhood or ZIP code.
2. Apply conservative revenue assumptions.
   • Reduce market ADR by 10 to 25 percent to account for ramp-up and fewer early reviews.
   • Reduce market occupancy by 10 to 30 percent if supply is growing or the home is new to market.
3. Assume professional management unless you will self-manage.
   • Model a 20 to 30 percent management fee. Compare the fee to expected revenue lift from professional marketing.
4. Normalize operating expenses.
   • Cleaning per turnover based on size, plus linen and restocking.
   • Utilities higher in winter. Use comps if you can source bills from similar homes.
   • Maintenance and reserve at 5 to 10 percent of revenue or a fixed annual amount.
5. Model taxes and insurance.
   • Include property tax and STR insurance. Collect gross receipts and lodgers’ taxes through booking platforms and plan for filing per TRD.

Sensitivity check

Compare three scenarios so you understand the downside if ADR or occupancy softens. Use the market report as your baseline and apply the following structure:

This simple table shows how a small shift in ADR or occupancy can change annual revenue. Since many costs are fixed or semi-fixed, a 10 percent drop in ADR can have an outsized impact on net income. Review monthly seasonality as well, since winter and summer often make the year.

How to pick a strong Ruidoso rental

Use this quick checklist when touring properties:

• Close to Ski Apache and the Village for easy guest access
• STR-friendly HOA or no restrictions after legal review
• Good drive access with documented winter plowing
• Multiple bathrooms, flexible sleeping options, and family-friendly layout
• Hot tub or fireplace plus outdoor living space with views
• Private or covered parking for winter storms
• Ready-to-rent condition with durable finishes and fast internet
• Professional photography potential and curb appeal

Self-manage or hire a manager

Self-management can reduce fees but requires time, vendor coordination, and quick response to guest issues. In Ruidoso’s mountain setting, winter logistics add complexity. A seasoned local manager can handle dynamic pricing, distribution, cleaning, and guest support, which can improve occupancy and reviews. Ask any manager for references, winter access plans, fee schedules, and performance on similar homes.

Your next steps

• Order a neighborhood-level STR report from AirDNA or STR with monthly ADR and occupancy.
• Call the Village of Ruidoso and Lincoln County to confirm short-term rental rules and registration.
• Verify HOA documents for rental permissions and any registration or fee.
• Get at least three local property management proposals and a sample winter services estimate for plowing and access.
• Build a base, optimistic, and conservative model. Stress test winter and summer performance since those seasons can define your year.

When you want hyperlocal guidance on neighborhoods, access roads, and rental potential, you deserve a trusted advisor on the ground. As an Alto and Ruidoso specialist, I help investors identify the right areas, confirm rules, connect with vetted managers, and move from offer to launch with a clear plan. Ready to talk through your goals and a data-minded path to ROI? Schedule a consultation with Deanna Miller.

FAQs

Do I need a permit to run a short-term rental in Ruidoso?

• Short-term rental rules vary by jurisdiction and sometimes by neighborhood, so contact the Village of Ruidoso and Lincoln County to confirm current STR registration, business license, or occupancy limits, and always review HOA rules.

How seasonal is Ruidoso vacation rental revenue?

• Ruidoso is highly seasonal, with winter ski months and summer typically driving the most demand; use monthly ADR and occupancy data from AirDNA or STR to model peaks and shoulder periods.

What is a typical full-service management fee in resort markets like Ruidoso?

• Full-service vacation rental managers commonly charge about 18 to 30 percent of booking revenue, with higher fees often including dynamic pricing, distribution, housekeeping coordination, and guest services.

What taxes apply to short-term rentals in New Mexico?

• Short-term rentals are usually subject to state gross receipts tax and local lodgers’ tax; register and confirm filing and remittance with the New Mexico Taxation & Revenue Department and check local add-on rates.

How should I build a conservative pro forma for a Ruidoso cabin or condo?

• Start with neighborhood-level ADR and occupancy from a data provider, then reduce ADR by 10 to 25 percent and occupancy by 10 to 30 percent, assume professional management costs, and include cleaning, utilities, maintenance reserves, STR insurance, property tax, and tax collection and filing.