The 5 Most Landlord-Friendly States

As an investment, rental properties are an excellent way to hedge against inflation. While your debt remains fixed, the amount you can charge for rent will likely increase every year and you’ll be able to reap passive income for as long as you own the property. At least, that’s the ideal scenario. There are a lot of variables that can affect the profitability of a rental property. Some of those factors can include the quality of the neighborhood or the physical condition of the property. But what about the laws and the regulations of the state where you’re investing? Different states have different laws that can affect your bottom line as a real estate investor. Taxes, insurance rates, and the ability to evict a troublesome tenant can all impact your revenue stream, and those are all decided at the state level. Let’s take a look at the most landlord-friendly states in the country.


Austin, Houston, and Dallas are all booming markets. Beyond its economic appeal, Texas is appealing because it’s a state where tenant violations of the lease are taken seriously. In the event of a lease violation, Texas supports compensation of the landlord and/or repossession of the rental unit if the lease terms are violated. This means that landlords can rest assured that their leases are enforceable and their cashflow won’t be upended by a legal loophole.


From a purely financial standpoint, Indiana is tough to beat. They’re uniquely positioned with a low median home value of about $145,000 and a median rent of $1,100. Beyond that, landlords have 45 days to return a tenant’s security deposit. This is especially useful for independent landlords who can take their time assessing whether a tenant has left any damages in their wake.


Eviction is an unfortunate last resort for landlords. While the eviction process can take many months in certain states, the process moves quickly in Colorado. If tenants are in violation of their lease due to nonpayment, they have 72 hours to comply once the landlord gives them a written demand for compliance. After the 72-hour period, tenants can either pay their landlords or leave the property. If the tenant decides to vacate, they must do so within 48 hours.


Not only does Florida have one of the highest populations of renters in the country, it’s extremely favorable to landlords. There are no rent control laws in Florida, and landlords are able to set their own late fees without any regulations by the state. Landlords are also free to set the price of their security deposit and have a full 60 days to return it once the tenant moves out.


Landlords in Arizona are able to raise rents with a 30-day notice as long as it doesn’t violate the terms of an existing lease. If a tenant fails to pay rent, the landlord can give them a five-day notice to resolve the issue. If there is a breach in the rental agreement – a new roommate who isn’t on the lease, for example – landlords can give tenants a ten-day notice to comply. In both cases, if the issue isn’t resolved at the end of the notice period, the landlord can begin eviction proceedings. In serious situations, such as a crime being committed on the premises, the landlord can issue an unconditional ten-day notice to vacate the premises.


Thankfully, evictions are a rare occurrence and should only be implemented as a last resort. In the event that it does become necessary, you want to make sure that as a landlord the laws of your state are on your side.


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