DSCR Loans in Albuquerque, NM: Your Guide to Rental Property Investing in the Duke City

Albuquerque is one of the most underrated rental markets in the country. With median home prices well below the national average, strong rent-to-price ratios, and an economy anchored by Kirtland Air Force Base, Sandia National Laboratories, and the University of New Mexico, the Duke City offers something increasingly rare: investment properties that actually cash flow from day one.

DSCR loans are tailor-made for this market. If you're an investor who'd rather qualify based on the property's income than hand over your tax returns, here's how to make it work in Albuquerque.

What Is a DSCR Loan?

A DSCR (Debt Service Coverage Ratio) loan qualifies you entirely on the property's rental income. No personal income docs. No W-2s. No DTI calculations.

DSCR = Gross Monthly Rent ÷ Monthly PITIA

PITIA = Principal + Interest + Taxes + Insurance + Association dues.

A DSCR of 1.0 means rent covers the mortgage. A DSCR of 1.25 means there's a 25% cushion. Most lenders want at least 1.0, with better rates at 1.20+.

Why Albuquerque Is a DSCR Sweet Spot

The numbers tell the story:

• Median home prices are $100,000–$150,000 below the national median
• Rents have climbed steadily as the city's population has stabilized and new supply has lagged
• Property taxes are moderate
• Major employers (Sandia Labs, Kirtland AFB, UNM, Intel in nearby Rio Rancho) provide stable tenant pools

In many Albuquerque neighborhoods, you can hit a 1.20+ DSCR on a standard 25% down purchase — something that's increasingly hard to do in coastal or Mountain West markets.

Albuquerque Rental Market Data

• Median home price: $300,000–$330,000
• Median rent (single-family): $1,600–$1,850/month
• Median rent (2BR apartment): $1,100–$1,300/month
• Property tax rate: 0.85–1.0% (Bernalillo County)
• Vacancy rate: 4–6%
• Major employers: Sandia National Laboratories (~16,000 employees), Kirtland AFB (~23,000 military and civilian), UNM (~37,000 students + staff), Presbyterian Healthcare, Intel (Rio Rancho)

The combination of sub-$330,000 home prices and $1,600+ rents is what makes Albuquerque work for DSCR lending. The rent-to-price ratio is consistently better than markets of similar size.

DSCR Calculation: Albuquerque Example

Property: 3BR/2BA stucco home in the NE Heights
Purchase price: $310,000
Down payment: 25% ($77,500)
Loan amount: $232,500
Interest rate: 7.5% (30-year fixed)
Monthly P&I: $1,626
Property taxes: $248/month ($2,976/year)
Insurance: $135/month
Total PITIA: $2,009/month

Market rent: $1,750/month

DSCR = $1,750 ÷ $2,009 = 0.87

Hmm — that NE Heights property doesn't quite work at this price point. Let's try a different neighborhood:

Property: 3BR/2BA in the South Valley
Purchase price: $255,000
Down payment: 25% ($63,750)
Loan amount: $191,250
Interest rate: 7.5%
Monthly P&I: $1,337
Property taxes: $204/month
Insurance: $125/month
Total PITIA: $1,666/month

Market rent: $1,600/month

DSCR = $1,600 ÷ $1,666 = 0.96

Closer. Now try a property with slightly higher rent potential:

Property: Updated 3BR/2BA near UNM/Nob Hill
Purchase price: $285,000
Down payment: 25% ($71,250)
Loan amount: $213,750
Interest rate: 7.5%
Monthly P&I: $1,494
Property taxes: $228/month
Insurance: $130/month
Total PITIA: $1,852/month

Market rent: $1,900/month

DSCR = $1,900 ÷ $1,852 = 1.03

That works with many lenders. And in Albuquerque's more affordable pockets, the numbers get even better.

Best Albuquerque Neighborhoods for DSCR Investments

1. Near UNM / Nob Hill

The University of New Mexico area and adjacent Nob Hill neighborhood have the highest rental demand density in the city. Students, hospital workers (UNM Hospital is the state's only Level 1 trauma center), and young professionals all compete for housing.

• Typical purchase price: $250,000–$350,000
• Typical rent: $1,500–$2,000/month
• Investor angle: Consistent demand, low vacancy (often below 3%), and potential for per-room rentals near campus. A 4BR house renting rooms at $600 each generates $2,400/month — excellent DSCR territory.

2. International District / South San Pedro

This area has been the focus of significant city investment and revitalization. It's still one of the most affordable parts of Albuquerque, with home prices well below the city median.

• Typical purchase price: $180,000–$260,000
• Typical rent: $1,200–$1,500/month
• Investor angle: The best rent-to-price ratios in the metro. A $220,000 home renting at $1,400/month with 25% down produces a DSCR of about 1.10. Some properties in this area need work, so budget for renovations, but the post-renovation DSCR potential is strong.

3. NE Heights (Academy / Eubank Corridor)

The NE Heights is the largest residential area in Albuquerque — stable, suburban, and home to many Sandia Labs and Kirtland AFB workers. Well-maintained homes from the 1970s–1990s dominate.

• Typical purchase price: $300,000–$380,000
• Typical rent: $1,700–$2,100/month
• Investor angle: Stable tenants, longer average tenure, and lower turnover costs. DSCR can be tight at higher price points, so target the lower end of the range or look for properties with casitas (guest houses) that add rental income.

4. Westside / Rio Rancho

The Westside (west of the Rio Grande) and adjacent Rio Rancho offer newer construction and lower prices than the NE Heights. Rio Rancho has its own economy anchored by Intel's semiconductor fabrication facility and Presbyterian Rust Medical Center.

• Typical purchase price: $280,000–$350,000
• Typical rent: $1,600–$1,900/month
• Investor angle: Newer homes (2000s-built) with lower maintenance costs. Intel's expansion in Rio Rancho is adding jobs and housing demand. A $300,000 home renting at $1,800/month hits a DSCR of about 1.05 at 25% down.

5. South Valley

The South Valley is unincorporated Bernalillo County — lower prices, larger lots, and a more rural feel. It's attracted investor attention as prices in Albuquerque proper have risen.

• Typical purchase price: $220,000–$300,000
• Typical rent: $1,400–$1,700/month
• Investor angle: Lower entry points and the possibility of ADU construction on larger lots. Some properties have existing casitas that provide additional rental income. A $240,000 property with a casita renting the main house at $1,400 and casita at $700 ($2,100 total) produces an excellent DSCR.

Property Types for Albuquerque DSCR Investors

Single-Family Homes with Casitas

This is Albuquerque's secret weapon. Many properties — particularly in the South Valley, North Valley, and older parts of the city — include casitas (small guest houses or in-law suites). A casita adds $600–$900/month in rental income, dramatically improving your DSCR. Some DSCR lenders will count casita income if it's legally permitted and appears on the appraisal.

Small Multifamily

Albuquerque has a reasonable stock of duplexes and fourplexes, especially in the older neighborhoods near downtown and UNM. A fourplex in the UNM area at $450,000 with four units renting at $1,000 each ($4,000/month) produces a DSCR well above 1.20.

Single-Family Homes

The bread-and-butter investment. Focus on 3BR/2BA homes in the $230,000–$310,000 range for the best DSCR ratios. Avoid the very cheapest homes (under $150,000) as they often require significant capital expenditure and may not appraise well for DSCR purposes.

Short-Term Rentals

Albuquerque's tourism has grown — the International Balloon Fiesta, Breaking Bad tourism, Route 66 nostalgia, and proximity to Santa Fe all drive visitors. The city requires STR registration but has been relatively permissive. An STR in Nob Hill or Old Town can generate $2,500–$4,000/month, producing strong DSCRs.

Albuquerque DSCR Investment Strategies

Strategy 1: UNM Area Cash Flow Machine

Buy a 3–4BR home near UNM for $280,000. Rent traditionally at $1,800/month or by the room at $600/room ($2,400/month for 4 rooms). Traditional DSCR: 1.05. Per-room DSCR: 1.40. Per-room rentals require more management but significantly boost your DSCR.

Strategy 2: International District Value-Add

Buy a 3BR/1BA for $200,000. Invest $25,000 to add a second bathroom, update finishes, and improve curb appeal. Rent at $1,450/month. On the original purchase price with 25% down ($150,000 loan), PITIA is about $1,260. DSCR: 1.15. Refinance after renovation to pull out capital.

Strategy 3: Casita Income Play

Buy a property with a casita in the South Valley or North Valley for $280,000. Main house rent: $1,500/month. Casita rent: $800/month. Total: $2,300/month. PITIA at 25% down: ~$1,820. DSCR: 1.26. This strategy leverages Albuquerque's unique housing stock.

Strategy 4: Rio Rancho New Build

Buy a new-construction 4BR in Rio Rancho for $320,000. Rent to an Intel or healthcare worker family at $1,900/month. PITIA at 25% down: ~$1,950. DSCR: 0.97. Tight, but some lenders will approve at this level. The play is appreciation as Intel and other employers expand. Increase down payment to 30% to push DSCR above 1.0.

Strategy 5: Old Town / Downtown STR

Buy a 2BR in the Old Town area for $275,000. Furnish it ($12,000–$18,000) and list as an STR. Project $2,800–$3,500/month in average annual revenue. PITIA at 25% down: ~$1,750. DSCR: 1.60–2.00. Balloon Fiesta week alone (October) can generate $3,000–$5,000 in a single week.

DSCR Loan Requirements

• Minimum DSCR: 1.0–1.25 (sub-1.0 available)
• Down payment: 20–25% (30% for lower DSCRs)
• Credit score: 660+ minimum
• Eligible properties: SFH, 2–4 unit, condo, townhome
• Loan range: $100,000–$2,000,000+
• No personal income verification
• Appraisal with rental survey required
• Reserves: 6–12 months PITIA

Frequently Asked Questions

Is Albuquerque a good market for out-of-state investors?

Yes. Albuquerque's price points are accessible, property management companies are available (expect 8–10% of rent), and the market is straightforward — no extreme seasonality, no hyper-competitive bidding wars. Many out-of-state investors buy here specifically because the DSCR math works better than in their home markets.

What are New Mexico's landlord-tenant laws like?

New Mexico is considered relatively balanced between landlord and tenant protections. Eviction timelines are faster than states like California or New York. The key rules: 3-day notice for non-payment, 30-day notice for month-to-month lease termination, and security deposits limited to one month's rent. Overall, the legal environment is workable for investors.

Do casitas count as income for DSCR purposes?

If the casita is legally permitted and appears on the property appraisal as a separate dwelling unit, most DSCR lenders will include its income. Unpermitted casitas are risky — the lender likely won't count the income, and the city could require removal. Verify permitting before relying on casita income in your DSCR calculation.

How does Albuquerque's altitude and climate affect insurance costs?

Albuquerque sits at 5,300 feet with a dry, semi-arid climate. There's no hurricane risk and minimal flood risk (except in certain arroyos). Insurance costs are generally lower than coastal or storm-prone markets — typically $1,200–$1,800/year for a standard SFH investment property. This helps your DSCR.

Can I finance a short-term rental in Albuquerque with a DSCR loan?

Yes. Many DSCR lenders accept projected STR income, usually based on a third-party report (AirDNA is the most common). They'll typically use 75–80% of projected gross income. Albuquerque requires STR operators to register with the city and collect lodgers' tax (5%), so factor that into your expense projections.

Final Thoughts

Albuquerque might not have the glamour of a coastal market, but for DSCR investors, glamour isn't the point — cash flow is. The Duke City delivers something hard to find in 2026: properties that pencil at 25% down with current interest rates.

The casita strategy is uniquely Albuquerque and worth pursuing if you can find properties with existing permitted casitas. The UNM rental market is rock-solid. The International District offers the best entry points. And the overall cost of investing — from property taxes to insurance to property management fees — is lower than most comparable metros.

Run the DSCR math, pick the right neighborhood, and Albuquerque can be one of the strongest markets in your portfolio.