Top 20 Most and Least Landlord Friendly States of 2022

Top 20 Most & Least Landlord Friendly States Article Banner Image

Agnes A. Gaddis

Each state has specific rules and regulations concerning rental property. Needless to say, some states favor landlords more than others. That’s why the location of your rental property is so crucial. In this article, we will discuss what makes a state landlord friendly and then look at the most and the least landlord friendly states throughout the United States in 2022.

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What Makes a State Landlord Friendly?

So, what are the criteria that determine whether a state is landlord friendly or not? The best landlord friendly states have:

  • Less complicated eviction process: Evictions can often turn sour and may be uncomfortable for all parties involved. However, a tenant who has been defaulting on their rent payments or has violated their lease agreement will have to be evicted. In some states, the process of eviction is long, burdensome, and may take up to several months. While in other states, the process is quick and much less complicated.
  • No rent control: Certain states restrict landlords from increasing rent by imposing a rent ceiling even during inflation. It’s vital to consider the rent control policies in the market you want to invest in.
  • Low property taxes: Some states charge higher real estate taxes than others. When choosing a state for your investment, you should consider the local taxes imposed on rental properties.

Top 10 Most Landlord Friendly States in 2022

Alabama

Alabama is one of the most affordable real estate markets in the United States. The state’s median home value has been rising for more than a decade, but low-interest rates and an increase in the state’s family income level have made it easier for more people to purchase homes. Is Alabama a landlord friendly state? Yes!

  1. Alabama has one of the lowest property tax rates in the country, the second lowest after Hawaii. According to SmartAsset, an Alabama homeowner pays only $609 in property taxes per year. That’s about a quarter of the national average of $2,578.
  2. You don’t need a rental license to be a landlord in Alabama.
  3. Alabama law prohibits tenants from withholding rent or using “repair and deduct” when landlords fail to make needed repairs to the rental unit. Tenants must submit their requests to their landlord in writing and give an ultimatum of 14 days after which they are free to leave if the landlord fails to make the repairs.
  4. For a month-to-month rental arrangement, you are allowed to increase the rent after a 30-day notice.
  5. Since Alabama’s state law does not cover late rent fees, you can charge however much you consider reasonable for late payments. This is as long as it is clearly stated in the lease agreement.
  6. The eviction process in Alabama is straightforward, compared to other states. You can evict a tenant for unpaid rent after a 7-day notice. Eviction based on a breach of the lease agreement requires a 14-day written notice.

Florida

In Florida, the laws governing landlord-tenant relationships don’t go into specific detail. This provides a less rigid landscape for property owners and landlords.

Evicting a tenant for unpaid rent requires you to give them at least three days to pay up or leave. If you’re evicting them on grounds of property damage or breach of a lease agreement, the written notice must allow for up to 7 days. The average property tax rate in Florida is 0.98% of the value of the property.

Georgia

The Georgia housing market is one of the fastest growing in the United States and it has held that title since 2010. Georgia remains an ideal destination for investors. Rehabbing used to be quite popular in Georgia, but is no longer as popular as it once was.

The eviction process is informal. Landlords do have to give tenants a 7-day notice of due rent, but it does not have to be written. After seven days, landlords are allowed to initiate court proceedings to remove the tenant from their property, if necessary.

According to WalletHub, the average property tax rate in Georgia is 0.92%, less than the national average of 1.1%.

Arizona

Property taxes in Arizona are one of the lowest in the country at only 0.72% of the property’s value. Landlords are allowed to increase the rent on their property after a 30-day notice. Also, there are different types of notices a landlord can issue to terminate a rental agreement.

  • A five-day notice is sent to tenants whose rent is due
  • A five-day notice is given to tenants who failed to take care of the property
  • A ten-day notice is given to tenants who have violated the lease or rental agreement
  • An “Unconditional Quit Notice” is issued to tenants who have committed criminal activities within the premises or have an unreported criminal record.

Landlords may file an eviction lawsuit if tenants fail to comply and/or remedy violation issues within the stipulated period.

Indiana

The median price of a single family home in Indiana is around $185,800. The average rent for a small apartment in Indianapolis is about $1,020, according to RentCafe. This price-to-rent ratio in Indiana’s housing market is the pull factor for a lot of investors.

However, this is not the only reason Indiana is a landlord friendly state. Indiana state laws allow landlords to hold security deposits for up to 45 days. Landlords can use this time to determine how much they need to deduct from the deposit on any damages done by the tenant. Eviction requires only a ten-day notice before landlords can begin court proceedings.

Michigan

Michigan is another landlord-friendly state with less restrictive policies on rental rates and fees. Landlords are allowed to deduct from the deposit to cover damages that exceed normal wear and tear. If the tenant moves out of the property, the landlord can retain the deposit for up to a month.

Lease adjustments can be made after a 30-day notice, provided a clause in the lease agreement allows it. Michigan’s property tax rate is, however, more than the effective national average at 1.64%.

North Carolina

North Carolina’s housing market has gained the attention of real estate inventors of late and buyers are rushing to the state’s major cities, especially Charlotte and Durham. Taxes are low in NC, at a median property tax rate of 0.78%.

For non-payment of rent, landlords have to give their tenants a ten-day notice before starting the eviction process. But a landlord is not obligated to renew the lease or rental agreement. In this case, the landlord has to give a:

  • Two-day notice if the lease was week-to-week
  • Seven-day notice if the lease was month-to-month
  • One-month notice if the lease was year-to-year

Lease violations do not require any minimum notice before eviction proceedings.

Ohio

Number eight on our list of landlord friendly states is the Buckeye State, Ohio. Tenants that default on rent payments are required to vacate the premises after receiving a 3-day notice from the landlord.

There are no limits on the amount of a security deposit. The security deposit must be returned within 30 days of the tenant leaving the property. It can be used to cover property damage exceeding normal wear and tear. However, Ohio has the 13th highest property tax rate in the US at 1.48%.

Texas

The Lone Star State has the seventh highest property tax rate in the US at 1.83%. Despite this, landlord-tenant laws in Texas are very landlord friendly and attract a lot of investors to the state.

Similar to Ohio, there are no limits on security deposits, at the state level. Also, landlords and tenants can enter into their own eviction agreement concerning repairs. This means you can have clauses that excuse you from paying for repairs if the tenant is late with their rent.

Tenants are given a 3-day notice before they are evicted if they violate their lease. You can withhold the security deposit for 30 days after the tenant has moved out to inspect the property and account for damages.

Arkansas

Arkansas has no implied warranty of habitability. This warranty ensures that a property is in good order and can be occupied by people. This means that landlords are rarely responsible for repairs or maintenance of a property, unless stated in the lease.

Arkansas imposes few restrictions on landlords and the two parties are free to make a rental arrangement that suits them. There are no rent control guidelines and landlords are allowed to charge as much as they consider reasonable.

However, for both oral and written leases, landlords must give notice of the rent increase at least one rental period in advance.

In Arkansas, even model tenants can be evicted. Landlords can terminate a lease for any reason. The landlord, however, must give the notice one rental period in advance or as stipulated in the lease agreement. Security deposits can be held for 60 days after a tenant’s departure.

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Top 10 Least Landlord-Friendly States in 2022

Certain states favor tenants over landlords. Generally, these tenant friendly states tend to fall on the Northern side of the country while Southern states tend to be more landlord-friendly. This divide dates back to the country’s early days.

The Southern states depended mostly on agriculture and were populated with landowners. So, laws were written to protect the landowners and their properties. The Northern states, which were more reliant on manufacturing and trade, developed rental policies that favored renters to foster immigration.

In tenant friendly states, landlords find it more difficult to evict renters, screening is more circumspect, and security deposit restrictions are very strict.

New York

Apart from being one of the most expensive housing markets in the United States, New York has a lot of restrictive policies concerning landlords and investors. These policies tend to differ depending on the type, size, and peculiar condition of the rental.

These policies specify how long you rent, how much you can charge for application fees and late fees, how much you can collect as security deposit and for rent. As an example, you can only charge $50 or 5% of the monthly rent, whichever is less, as a late fee.

Property taxes vary widely in New York. In the Big Apple, property owners pay 0.88% while in Suffolk county, landlords pay up to 2.37% in property taxes. The average property tax statewide is 1.69%.

California

While California is one of the states with low property tax rates, several cities in California have rent control on residential real estate properties. California was one of the first states to put statewide rent control into law. Additionally, several regulations restrict how much you can charge for application fees, how you screen tenants, and the eviction process.

Oregon

Oregon was the first state to impose a statewide rent control policy in 2019. This placed several restrictions on landlords in the state. Some of these include:

  • Rent must not be increased by more than 7% in a year.
  • Renters who have occupied a property for up to a year cannot be evicted without cause. Non-payment of rent is the most common legal cause of eviction in Oregon.
  • Landlords who violate these laws will have to pay tenants up to three months’ rent plus damages.

Washington

Washington is in between landlord friendly and tenant friendly. Depending on the reason for the eviction, evictions may take longer than a month. But a landlord has to give at least a 5 day eviction notice before starting proceedings. There is rent control in places like DC. Also, in Seattle, landlords have to obey the “first-in-time” or FIT rule.

First adopted in 2016, this law dictates that landlords must rent their property to the first tenant who meets the requirements. Seattle prohibits landlords from actively choosing their tenants, forcing them to screen applications according to when they were submitted and give tenancy to the first qualified tenant.

Maryland

The Old Line State has several provinces that impose rent control policies. Landlords are mandated in Maryland to be registered and licensed before accepting tenants. Also, Maryland has strict regulations on security deposits, late fees, and lease agreements. Landlords must give tenants a written 10-day notice for unpaid rent. Evictions can take up to two months.

Vermont

According to RentCafe, Vermont is the most tenant friendly state in the United States based on a ranking system that focused on particular aspects of the landlord-tenant relationship, such as legislation on security deposits, eviction notices, and rent increases.

Eviction for unpaid rent must follow a 14-day written notice by the landlord. Landlords must give a 60-day notice before increasing rent. Landlords need to provide a 48-hour notice before entering the premises and a 14-day notice for eviction due to unpaid rent.

Nebraska

Nebraska has a median property tax rate of 1.76%, much higher than the national average. Landlords are allowed to withhold security deposits for not more than 14 days after the tenant moves out. Tenants are allowed to withhold rent if important repairs are not carried out.

Rhode Island

The Ocean State has a median tax rate of 1.36%. A 20-day notice is required for eviction and tenants are allowed to make repairs and deduct the cost from the rent. The landlord must give a 48-hour notice before entering the property.

Nevada

Tenants are allowed to withhold rent and “repair and deduct” if the landlord fails to make major repairs. Late fees must be clearly stated in the lease agreement and must not be more than 5% of the rent.

Delaware

State laws in Delaware allow tenants to withhold rent payments if major repairs aren’t carried out or deduct the costs of repairs from their rent. A 5-day notice is required for non-payment of rent before eviction. To raise the rent, landlords must give a 60 day notice to their tenants.

Should You Only Invest in Landlord Friendly States?

In the end, landlord-friendliness shouldn’t be the only factor influencing your investment decision, but it should influence your choice to a certain degree since you cannot change the location of your real estate investment.

Investing in one of the most landlord friendly states can save you a lot of hassle and money. Yet rental property in a landlord friendly state with few potential buyers will not make you as much money as property in a tenant-friendly state with an active housing market. So, demand is an important factor to consider in choosing your investment location.

Also, it’s possible to have a landlord friendly city within a tenant friendly state as well as the reverse. Therefore, in addition to state property laws, check out local laws as well.

Conclusion

In conclusion, while it is true that you can find profitable real estate anywhere in the United States, certain states have real estate policies that make them better suited to protecting your investment. Investing in landlord friendly states will make your journey as a property owner much smoother, hassle-free, and profitable. If you’re an investor looking to grow an out-of-state real estate investing portfolio, then you should sign up to Realwealth to get access to opportunities and carefully selected investments.

Top 20 Most and Least Landlord Friendly States of 2022