6 of the Most Landlord-Friendly States for Investors

It’s no secret—real estate is such a great investment for investors turned landlords. Specifically, investing in rental properties can be one of the most lucrative ventures you could ever make. 

Why? Over 44 million households are actually considered renters in the United States. This means you can capitalize on them as a real estate investor. Look at the average lengths of leases, varying from state to state, below: 

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However, as an investor, it pays to be highly selective and decisive in your rental property investment. This begs one of the most critical questions: What states are some of the most landlord-friendly?

Read on to find out the answers to this crucial question and make an informed real estate decision. 

Key Factors That Make a Landlord-Friendly State

As a global or local investor, selecting the right state can impact your rental property investment. This can help boost your return on investment (ROI). However, this can also impact your property management and landlord-tenant relationships.

There are key considerations to make when deciding which state to invest in. Take it from Matthew Channell, Owner of TSW Training. He has his fair share of investing in a handful of rental properties. However, he recommends considering states that favor landlords in their real estate investments.

Channell says, “Choosing the correct state for your rental property is more than simply the location; it’s also about the laws, taxes, and tenant regulations that can make or break your ROI. Positive eviction rules, low property taxes, and high rental demand are game changers. A landlord-friendly state equals more efficient management and higher returns.”

Channell cites the eight key factors that make a landlord-friendly state:

• Favorable laws and regulations: As a landlord, you prefer a state whose legalities favor you. For instance, you abhor the squatters’ rights and don’t want to deal with those who camp out on your property without permission. States with landlord-friendly rules make it easier to boot them out fast, keeping your headaches to a minimum. 

• Affordable real estate: Some states offer low-cost real estate properties that you can invest in, whether through outright purchase or mortgage. Of course, snagging a property without breaking the bank is a huge win. Affordable markets mean you can invest smarter and stretch your dollar further.

• High rental demand: Nothing beats renting out properties in in-demand locations, whether residential areas, schools, or commercial centers. If people flock to an area, you’ll never have to worry about finding tenants. High demand keeps your place occupied and cash rolling in. Look at the U.S. regions with low vacancy rates:

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• Low property taxes: Nobody likes hefty taxes eating into their profits. Low property taxes not only pad your wallet but can also ease the rent burden for tenants. For instance, consider the potential impact of tax refunds on rent payments, allowing you to get returns on your investment.

• Less rent control: Some states have stringent legal and regulatory requirements as if you have zero-to-minimal control over your rental properties. Meanwhile, states without strict rent control let you call the shots. You can adjust rents when the market’s hot instead of being stuck with outdated rates.

• Efficient eviction process: Eviction is one of the most crucial aspects of rental property management, but it can be such a headache. Kicking out a bad tenant shouldn’t feel like a marathon. Unlike California eviction laws, landlord-friendly states let you handle it swiftly and without drama.

• Fast economic growth: The economy in your chosen location could impact your real estate investment and its ROI potential. Booming economies mean more people moving in and looking for homes. It’s like hitting the jackpot for landlords—more renters, demand, and cash. 

For instance, the rising interest in tiny homes for sale in Virginia reflects how economic growth and lifestyle trends can create lucrative opportunities for investors seeking innovative housing solutions.

• Landlord lease protection: Understand the importance of knowing the state lease laws to see if you’re legally protected as a landlord. Your lease is your safety net, so make sure the state’s laws have your back. Knowing the ins and outs of those rules keeps you covered if a tenant decides to pull a fast one.

The Most Landlord-Friendly States for Investors

Most U.S. landlords own just a few properties compared to businesses with larger shares of units. In fact, individual investors own more than 72% of single-unit rental properties. 

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Regardless, it’s wise to consider the key factors above and select a state in which to invest. That way, you can make the most of your real estate investments.

But what are six of the most landlord-friendly states for investors? Here are some:

1. Texas: Favorable laws and tax-free perks

Texas is among the best states for property investors looking to become landlords. With landlord-friendly laws and no state income tax, it’s a great place to maximize profits.

Gavin Yi, Founder and CEO of Yijin Hardware, says, “Texas is a goldmine for investors. With no state income tax and flexible rental rules, it’s a great spot for growing profits. If you want to build your portfolio without the headaches, Texas is hard to beat.”

Here’s why:

• No rent control: You can set and adjust rental prices freely.
• No limits on security deposits: You decide the deposit amount and fees.
• Three-day eviction notice: Evictions for non-payment are quick.
• No entry notice: No need to give notice before entering your property.
• Flexible repair rules: You have more control over who handles repairs.

Texas makes it easier to be a landlord and see strong returns.

2. Florida: High demand and pro-landlord policies

Toni Farrell, Marketing Manager at Coastal Motorhomes & Caravans, recommends Florida for its high rental demand and landlord-friendly policies.

Farrell says, “Florida’s rental market is a goldmine for landlords. With no rent control, low property taxes, and a fast eviction process, it’s a great mix of stability and profit potential for investors.

Thanks to its strong demand and low taxes, Florida is a top state for rental property investments. These factors make it an ideal choice for landlords looking for steady returns. Here’s why:

• No rent control: You have the freedom to set and adjust rental prices.
• No security deposit caps: You can charge whatever security deposit you need.
• Quick eviction notice: Evictions can start within three days for lease violations.
• Low property tax rate: Florida’s property tax rate is a relatively low 0.98%.
• No statewide rent control: Managing properties is simpler with fewer restrictions.

Florida offers a smooth path for landlords looking to grow their rental income.

3. Georgia: Low costs and high ROI potential

Georgia is another excellent place for landlords. It is well-known for its low property taxes and flexible landlord-tenant rules. These factors make it an excellent choice for real estate investors seeking to grow equity and generate high returns.

Here’s why Georgia stands out:

• No rent control: You can set and adjust rent prices without limits.
• No security deposit caps: You can ask for a deposit based on the property’s needs.
• Low property tax rate: Georgia’s taxes are below the national average, so you save more.
• Verbal eviction notice: You can issue a verbal eviction notice the day after rent is missed.
• No advance entry notice: You can enter the property as needed with fewer restrictions.

Take it from Matt Wouldes, Founder of Land & Sea NZ. Wouldes says, “Georgia’s low taxes, quick eviction process, and high ROI make it a top pick for landlords. With flexible landlord-tenant laws, it’s a great place to build long-term equity and see solid returns.”

4. Indiana: Affordability and landlord-centric laws

Indiana is known for its affordable housing, low property taxes, and landlord-friendly policies. These qualities make it easier to maintain and keep rental properties lucrative, establishing it as one of the most landlord-friendly states.

Here’s why Indiana works for landlords:

• No security deposit limit: You can collect deposits based on what your property needs.
• 45-day deposit return period: You have plenty of time for inspections and deducting any costs if needed.
• 10-day eviction notice: You can quickly handle lease violations with a fast eviction process.
• Low property tax rate: Enjoy lower expenses with a tax rate of just 0.87%, lower than the national average.
• No rent control laws: You can set rental prices without government restrictions.

Learn from Stephen Boatman, Principal at Flat Fee Financial. Boatman says, “Indiana’s policies, like quick evictions and no limits on security deposits, make it easy for property owners to protect their investments and keep their rental business running smoothly.”

5. Arizona: Rapid growth and minimal regulations

Arizona’s landlord-tenant laws make it a top choice for real estate investors. With rapid growth and low property taxes, it’s a great state for rental investments and definitely deserves a spot on any landlord’s list.

Greg Arnold, General Manager at Kitchen Mania, believes Arizona is ideal for rental property investments due to high growth and less regulations.

Arnold says, “Arizona’s light regulations, fast eviction process, and low property taxes make it a dream for landlords. The state’s landlord-friendly policies create plenty of opportunities for success, whether you’re experienced or just starting in your investments.”

Here’s why Arizona is best for landlords:

• Low property tax rate: Arizona’s tax rate is just 0.62%, one of the lowest in the country.
• Fast eviction process: Evictions for unpaid rent can begin in as little as five days.
• 1.5 months’ rent security deposit: You can charge up to 1.5 months’ rent for the deposit.
• No rent control: You have the flexibility to set and adjust rental prices freely.
• Tenants can’t withhold rent: Tenants can’t withhold payment for any reason.

6. North Carolina: Economic growth and balanced policies

Alistair Flett, Managing Director at Pronto Hire, sees North Carolina as a top choice for landlords. He praises its economic growth and balanced policies, which make it ideal for rental property investments.

Flett says, “North Carolina creates the perfect environment for landlords with its low taxes, strong economic growth, and flexible policies. It’s a state where landlords can manage their properties effectively while benefiting from a booming economy and growing job market.”

North Carolina is a standout for landlords, with low property taxes, strong economic growth, and flexible landlord-tenant legislation. The state’s expanding job market makes it even more appealing to investors in rental properties.

Here’s why you should opt for North Carolina:

• No rent control: You can freely negotiate and adjust rental prices.
• Low property tax rate: Enjoy a property tax rate of just 0.78%, below the national average.
• 10-day eviction notice: You can issue a notice to vacate for non-payment and a zero-day notice for lease violations.
• Unconditional quit notice: You can end a tenancy immediately if the lease is violated.

With its balanced policies and economic growth, North Carolina is a great state for rental property investors.

Final Note

In real estate investment, rental property is one of the most profitable. But as an investor, capitalize on some of the states outlined above. Likewise, consider the key factors that make a landlord-friendly state—from favorable laws and regulations to high rental demand to fast economic growth. With these, you can maximize the ROI potential of your rental property!

Investing in one of the most landlord-friendly states for rental properties? Pick one of the states mentioned above. RentRedi can provide you with robust property management software to help you manage your rental units and valued tenants…all in one place. Contact us today to see how we can help!