If you are or want to become a landlord, it is important to choose a location that suits your needs. Explore the most landlord-friendly states and the most tenant-friendly ones. Learn about what to look for when choosing between these states and others.
Location is one of the most important factors in being a landlord. As they say, location is the one thing you cannot change about a property. When choosing a location to purchase property, it’s important to consider all of the factors that may affect your decisions. Among these factors are the state and local laws that govern your occupation.
Some state laws make areas more landlord-friendly than others, while other states choose to enact laws that are intended to protect tenants. While most laws are intended to make tenants’ and landlords’ lives easier, some of them get in the way of business and can make both individuals’ efforts more challenging. As such, it is important to learn which states have a combination of laws that you, whether you’re a landlord or a renter, want to work under.
Not every landlord-friendly state has the same laws and regulations. Some have higher property taxes than others, while some tenant-friendly states have greater protections than others. The lengths of eviction times, the amount of time landlords have to return security deposits, and the allowed uses of those payments vary significantly from one state to another.
With these factors in mind, here are some of the landlord-friendly states and some of the renter-friendly ones.
How to Tell if a State is Landlord-Friendly
Typically, the factors that make the difference between a landlord-friendly state and a renter-friendly state are the protections and limitations in place. However, there are many factors that some states have implemented to the benefit of both landlords and renters. Thriving communities with low crime rates and high concentrations of jobs and infrastructure are beneficial to both landlords and tenants.
Tenant-friendly states typically offer protections for renters, such as rent control laws, security deposit protections, and requirements for landlords to offer certain amenities. Landlord-friendly states typically offer lower property taxes, high population density, and eviction laws that favor landlords.
Top 5 Landlord-Friendly States
Landlord-friendly states, those with fast eviction times, low property taxes, and high populations, include, but are not limited to:
- Texas
- Florida
- Arizona
- Georgia
- Indiana
All five options have strong protections in place for nonpayment of rent and low property taxes. Each one has its own additional advantages and disadvantages, meaning they should always be researched more, but if you are looking for a state that is landlord-friendly, these states may be good options for your needs.
Typically, a landlord looks for a state like these to minimize the stress and red tape of their work. However, it is important to note that you are still required to abide by the Fair Housing Act and any other landlord-tenant laws that you fall under. Tenants who are treated kindly and fairly will be much more likely to stay in a rental property for longer periods of time. This, in turn, will reduce your tenant turnover and the associated expenses.
Learn more: Maximizing Tenant Retention for Landlords and Property Managers
Top 5 Tenant-Friendly States
States with strong renter protections, security deposit protections, and amenity requirements include, but are not limited to:
- California
- New York
- Washington
- Maryland
- Oregon
These states all have protections for tenants’ security deposits, take strong steps to protect tenants from unlawful evictions and unfair treatment, and, in some cases, such as California, require landlords to provide certain features, such as refrigerators and stoves. These states are often havens for renters, providing protections that may prevent certain landlords from taking advantage of them.
These states are still great places to be landlords, but they may be more difficult to manage. Strong renter protections, while excellent and highly beneficial for tenants, make a landlord’s job more difficult. They must keep track of a highly legislated area, with laws that change often and may be challenging to abide by, particularly in areas where local legislation commonly addresses the housing industry.
Final Thoughts
There are benefits and downsides to every state one might live in, and every location can be a perfect place to be a landlord if it fits your needs. Some states with higher renter protections are perfect for landlords, while others prefer more landlord-friendly locations. The ultimate decision of where to start your business is entirely up to you, and you should consider all factors before making that choice.