Renting Out Your Property in New Mexico: A Landlord's Guide

Familiarize yourself with New Mexico's Uniform Owner-Resident Relations Act (NMSA 47-8-1 through 47-8-52), which governs landlord-tenant relationships in the state. Pay special attention to security deposit limits (one month's rent for leases less than one year), required disclosures, and eviction procedures. The New Mexico Legal Aid website and the state's Regulation and Licensing Department are good resources.

Check with your local municipality about business license requirements for rental properties. Many New Mexico cities and counties require landlords to obtain a business license or rental permit. Contact your local government offices to determine specific requirements for your area.

Complete the application for a business license to operate your rental property. Include all required information such as property address, owner details, property type, and number of units. Be prepared to pay applicable fees and possibly undergo property inspections depending on your local jurisdiction's requirements.

Create a comprehensive rental application that collects information about potential tenants, including employment history, income verification, previous rental history, and references. Ensure your application complies with fair housing laws and doesn't include discriminatory questions based on protected classes (race, color, national origin, religion, sex, familial status, or disability).

Create a legally compliant lease agreement that includes all required New Mexico provisions. The lease should specify the rental term, rent amount, due date, late fees (if any), security deposit amount and terms, maintenance responsibilities, and other important terms. New Mexico law requires specific language regarding security deposits and tenant rights.

Federal law requires landlords of properties built before 1978 to disclose known information about lead-based paint and lead-based paint hazards before leases take effect. Provide tenants with an EPA-approved pamphlet on identifying and managing lead-based paint hazards and keep signed acknowledgment for at least three years.

Develop a detailed checklist documenting the condition of the property before the tenant moves in and after they move out. Include all rooms, appliances, fixtures, and exterior areas. Take date-stamped photos to supplement the checklist. This documentation is crucial for security deposit disputes.

Create a document outlining house rules that aren't included in the lease but are important for tenant conduct. This may include quiet hours, guest policies, parking rules, trash disposal instructions, and maintenance expectations. Ensure these rules are reasonable and don't contradict tenant rights under New Mexico law.

Create a receipt for security deposits that includes the amount received, date of receipt, and a statement explaining where the deposit will be held. New Mexico law requires landlords to provide a written record of all deposits and to keep deposits in a separate account from personal funds.

Create a form to notify tenants when you need to enter the property. New Mexico law requires landlords to provide at least 24 hours' notice before entering a rental unit except in emergencies. The notice should include the date, time, and purpose of entry.

Obtain appropriate landlord insurance coverage for your rental property. Standard homeowners insurance typically doesn't cover rental activities. Landlord policies (also called dwelling fire or DP policies) cover property damage, liability protection, and lost rental income if the property becomes uninhabitable.

Decide how you'll collect rent (check, direct deposit, online payment services) and document this in your lease. Set up a system to track payments and issue receipts. Consider using property management software to automate this process and maintain accurate records.

Understand federal and New Mexico fair housing laws to avoid discrimination claims. The New Mexico Human Rights Act prohibits discrimination based on race, color, national origin, ancestry, sex, sexual orientation, gender identity, spousal affiliation, physical or mental handicap, or serious medical condition. Ensure your advertising, tenant selection, and management practices comply with these laws.

Research tax requirements for rental income in New Mexico. Rental income must be reported on your federal and state tax returns. Keep detailed records of all income and expenses related to your rental property. Consider consulting with a tax professional familiar with rental property taxation to maximize deductions.

Create a schedule for routine maintenance and a system for handling tenant repair requests. New Mexico law requires landlords to maintain properties in a safe and habitable condition. Establish relationships with reliable contractors for various types of repairs and keep records of all maintenance performed.