One of the most important things to consider when investing in real estate is whether or not a state is landlord friendly. A landlord-friendly state has laws and regulations that allow investment property owners to manage their rentals effectively.
In this article, we will discuss the top five landlord-friendly states of 2023. Factors that will be considered are landlord-tenant laws, property taxes, and vacancy rates. Additionally, learn more about the benefits and drawbacks of each state so you can make informed decisions about whether or not you’d like to invest in those states.
How to Determine Landlord-Friendly States
There are several key factors to consider when you’re wondering what landlord-friendly states are right for you to invest in 2023. For example, you might be looking at the laws of the states, taxes, or the potential for filling your properties quickly.
Below, take a look at what you should know about determining which states are landlord-friendly and therefore the best for real estate investing in 2023.
- Landlord-tenant laws: Typically, states with laws that have the ability to evict tenants quickly, charge late fees, and withhold security deposits for damages are landlord-friendly.
- Property taxes: Generally, states with lower property taxes are more landlord-friendly as high property taxes can cut into any profits you earn as a landlord.
- Vacancy rates: Additionally, states with a large demand for rental properties are more landlord-friendly as they indicate low vacancy rates.
Top 5 Landlord-Friendly States to Invest in 2023
State #1: Texas
One of the most landlord-friend states in the country is Texas. The benefit of investing in rental properties in Texas is that the state has helpful landlord-tenant laws that enable landlords to quickly evict tenants, give them the ability to charge late fees, and have low property taxes. Not only does this make it efficient for landlords to manage their rentals, but it makes it more profitable as well.
However, one downside of investing in Texas is its high property crime rate. This can increase property damage and theft. But, one way you can mitigate some risk of potential theft and damage to your property is by adding security cameras to your rentals. Additionally, some areas of the state also have high vacancy rates. So, be sure to research the specific location you’re considering before investing.
State #2: Florida
Another state that could be considered landlord-friendly for 2023 is Florida. Similar to Texas, Florida also has landlord processes in place that enable landlords to evict tenants efficiently, the ability to charge late fees, and lower property taxes.
However, the natural disasters Florida experiences can be a drawback to investing there. Depending on the area you choose to invest in, you might have to worry about damage to your rental property or the cost of insurance.
State #3: Tennessee
Though its property taxes are slightly higher than in Florida and Texas, Tennessee is still a landlord-friendly state worth considering investing in for 2023. Generally, Tennessee’s landlord-tenant laws have conditions that make it easier to evict tenants if necessary. Additionally, Tennessee has low vacancy rates, indicating a high demand for rental properties.
However, one potential downside to investing in Tennessee is that it has a high sales tax rate. This can increase the cost of goods and services. Also, some areas of the state may experience higher volumes of property crimes, so investing in security systems if you choose to invest there might be worth your while.
Other Landlord-Friendly States Worth Considering
Other landlord-friendly states worth considering to invest in 2023:
- North Carolina
- South Carolina
Final Thoughts on Investing in Landlord-Friendly States
When examining the top landlord-friendly state to invest in 2023, consider the following three factors: landlord-tenant laws, property taxes, and vacancy rates. Each of these factors determines how favorable a state is towards landlords.
- Do they have laws that allow you to evict tenants if necessary? To charge late fees?
- Do they have lower property taxes?
- Do they have low vacancy rates?
When you ask yourself these questions, you’ll be able to determine if a state is landlord friendly!