The Top Landlord-Friendly
States in 2022

By Mark Lemmons  I  April 6, 2022

Owning rentals has been a popular way to make long-term income for years. Being a landlord can be a really great way to create financial freedom and flexibility. But to be successful, you have to choose where you invest in rental property wisely. Your rental’s success or failure depends largely on factors going on in the market , and that will vary from state to state. I have learned through personal real estate investments that “location, location, location” matters quite a bit.
Why Rental Location Matters

Landlord and tenant laws depend largely on the state and county. It’s important to understand the different factors at play and how they could affect your investment. Here are things that determine whether or not an area is landlord friendly.

  • Eviction procedures – States have different laws when it comes to the eviction process. If you are going to invest in a property in a certain state, you want to be sure that the state has a history of making the eviction process easy for landlords with tenants who are in breach of contract.
  • City laws – Some cities within states have differing laws on rental properties. It’s important to check not only the state laws but also the laws in each particular county. For example:
  • Landlord rights – State laws also determine rights for both the landlord and the tenant. Of course, it makes sense to have policies in place that protect both parties. But, some states favor tenants rights more than the landlord’s, making your investment more risky.
  • Rent control – Some states implement rent control in certain areas. This means that you may not be able to increase your rent, even when taxes and utility costs increase. These policies are designed to protect tenants from being taken advantage of, but sometimes, they prevent the property owner from making a reasonable return on investment. Be sure to consider rent control when choosing a location.
  • Registration and Licenses – Some states require landlords to obtain registration and licenses to operate their business. These can be great for training landlords on property management, but sometimes, they are incredibly costly and time consuming. You’ll want to take any of these state requirements into consideration.
  • Tax and Insurance – Local municipalities determine property taxes (and sometimes insurance rates). You want to do your research in this area as well. Costly property taxes and insurance can make or break a real estate investment, so choosing a state and county with a good rate is key.

Now that we understand the key factors contributing to a successful rental property investment, let’s look at the top 6 landlord-friendly states 2022.

1. Texas

This should come as no surprise. Texas has long been known for its real estate industry, and that isn’t changing anytime soon. The real estate market in Texas is vast and affordable. Texas tends to favor landlords and is less tolerant of lease violations. Landlords almost always get the upper hand if a lease is breached by the tenant. Texas makes it easy for you to get compensated and repossess the property if your tenant has violated your agreement.

2. Georgia

Georgia, like Texas, favors landlords when it comes to issues like unpaid rent. Georgia has no limits on rental fees or security deposits, allowing landlords to charge whatever they deem necessary. Their law also requires tenants to pay rent within 7 days of receiving an eviction notice. This is a fairly aggressive law, giving landlords the power to deal with any issues very quickly.

3. Kentucky

Next on our list is Kentucky. With lenient eviction laws, landlords have a lot of security in their investment. There are no laws around limiting late fees, so landlords can charge as much as they want for a late payment. Their property tax rate is also low, at only 0.86%. In addition, Kentucky allows landlords to give a 15 day notice for lease violations. If the issue is not resolved within 15 days, the landlord can lawfully evict the

4. Arizona

Arizona is another state that is very friendly to real estate investors. Their property tax is one of the lowest in the US at only 0.72%, making Arizona a great option for investing. They also have an aggressive eviction process, allowing landlords to issue 5 to 10 day notices (depending on the issue), and move forward with eviction if the issue is not resolved within that time.

5. Florida

Florida has one of the highest populations of renters in the country for a reason. Their laws regarding evictions and leases highly favor landlords. For example, they do not limit how much a landlord can charge for a security deposit. Like every other state on this list, they also do not implement rent control, and their average property tax rate is only 0.98%.

6. Alabama
Lastly, Alabama is a great state for rental properties. Similar to other states we’ve discussed, they have a no nonsense stance on evictions and lease violations. Landlords can make an eviction complaint against a tenant, and evict them in 7 days for unpaid rent, or 14 days for other lease breaches.

Understanding which states favor landlords is important if you are looking to purchase a rental property. For investors that don’t live in a landlord-friendly state, choosing a more strategic state can pay off in a larger return on investment and less hassle. If you have any questions about investing in rental properties out of state, don’t hesitate to reach out to me!

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