Best and Worst States for Landlords in 2020

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An investor can purchase property anywhere in the United States, but some states are more landlord-friendly than others. Learn about the states that are the best and worst for landlords in 2020 and the factors we used to determine this.

Factors for Ranking the Best and Worst States for Landlords

The factors that we looked at to help determine the best and worst states for landlords are property taxes, property values, average rents, and landlord-tenant laws.

Property Taxes

Regardless of where a landlord buys a rental property, they'll have to pay yearly taxes on it. Even if the landlord owns the property outright with no mortgage, they must still pay property taxes based on the property’s value. Therefore, if you buy in a state with a high tax rate, you'll be putting more money toward property taxes than you would for the same valued property in a state with a lower property tax rate.

Property Values

We also considered the average property values in each state. While the actual value will fluctuate wildly statewide, looking at the average does give a general idea of affordability.

Average Rents

Another important thing to consider is how much you'll be able to collect in monthly rent. We looked at the average rent list price for each state for this report. However, keep in mind that average rents will vary widely across each state depending on location, the condition of the property, amenities, and size of the rental.

Landlord-Tenant Laws

The final factor that was considered when evaluating the best states for landlords was the specific landlord-tenant laws in each state. Rules that are of particular significance include ease of terminating a lease, security deposit rules, maintenance and repair issues, and accessing a tenant’s apartment.

3 Best States for Landlords in 2020

These states have low taxes, reasonable rents, and favorable landlord-tenant laws.

1. Louisiana

  • Property Taxes – Louisiana has an effective property tax rate of 0.53% and is tied with Colorado for the third-lowest in the nation. On a $205,000 property, you would pay $1,091 a year in property taxes.
  • Average Home Price – The average home in Louisiana is valued at $166,565.
  • Average Rent – The average listed rent for a one-bedroom property in Louisiana is $1,089.
  • Landlord Tenant Law:
    • Security Deposit Limit – No limit.
    • Security Deposit Return – Landlords have a full 30 days to return a tenant’s security deposit after move out.
    • Repairs – Tenant cannot withhold rent but can deduct costs for making essential repairs from the rent.
    • Lease Termination – A landlord only has to give five days’ notice to terminate a lease for nonpayment of rent or other violations.

2. West Virginia

  • Property Taxes – West Virginia has an effective tax rate of 0.59%, making it the state with the eighth-lowest property taxes in the country. On a $205,000 property, you would be paying yearly property taxes of $1,208.
  • Average Home Price – An average home in West Virginia is valued at $108,236.
  • Average Rent – The average listed rent for a one-bedroom apartment in West Virginia is $1,124.
  • Landlord Tenant Law:
    • Security Deposit Limit – No limit.
    • Security Deposit Return – The landlord has 65 days to return a security deposit.
    • Repairs – There are no specific laws allowing a tenant to repair and deduct rent or withhold rent for repairs.
    • Lease Termination – A landlord can file for eviction immediately without giving notice to tenants.

3. Arkansas

  • Property Taxes – Arkansas has an effective property tax rate of 0.63%, which is the tenth lowest in the country. On a $205,000 property, you would pay $1,290 in property taxes.
  • Average Home Price – The average home in Arkansas is valued at $128,101.
  • Average Rent – The average listed rent for a one-bedroom place in Arkansas is $683.
  • Landlord Tenant Law:
    • Security Deposit Limit – Landlords can't charge more than two months' rent.
    • Security Deposit Return – Landlords have 60 days to return a tenant’s security deposit.
    • Repairs – There are no specific laws allowing a tenant to withhold rent or repair and deduct.
    • Lease Termination – A landlord may be able to immediately terminate a lease if rent is five days late or has 14 days to terminate for other lease violations.

3 Worst States for Landlords in 2020

These states have high property taxes, high home prices, and strict landlord-tenant laws.

1. Vermont

  • Property Taxes – Vermont has the sixth-highest property taxes in the nation, with an effective tax rate of 1.88%. On a $205,000 property, you should expect to pay $3,853 in yearly property taxes.
  • Average Home Price – The average price for a home in Vermont is $254,234.
  • Average Rent – The average listed rent for a one-bedroom apartment in Vermont was $1,482.
  • Landlord Tenant Law:
    • Security Deposit Limit – No limit.
    • Security Deposit Return – Landlord only has 14 days after the tenant moves out to return the deposit.
    • Rent Increase – A landlord must give the tenant at least 30 days’ notice to increase the tenant’s rent.
    • Repairs – Vermont tenants are allowed to withhold rent until essential repairs are made. They also have the option to repair and deduct the cost of the repair from the rent.
    • Lease Termination – A landlord can file for an eviction 14 days after a tenant doesn't pay rent.

2. Nebraska

  • Property Taxes – Nebraska has an effective property tax rate of 1.77%, which is the eighth-highest in the nation. On a $205,000 property, you should expect to pay $3,634 in yearly property taxes.
  • Average Home Price – The average price for a home in Nebraska is $175,884.
  • Average Rent – The average listed rent for a one-bedroom rental in Nebraska is $940.
  • Landlord Tenant Law:
    • Security Deposit Limit – One month’s rent.
    • Security Deposit Return – Nebraska landlords have 14 days after tenant move out to return a security deposit.
    • Repairs – Tenants in Nebraska are allowed to withhold rent until essential repairs have been completed.
    • Lease Termination – Landlord can send tenant notice that lease violations must be fixed within 14 days of notice, but cannot terminate the lease until 30 days after notice.

3. Rhode Island

  • Property Taxes – Rhode Island has an effective tax rate of 1.66%, making it the state with the tenth-highest property taxes. On a $205,000 property you should expect to pay $3,407 in yearly property taxes.
  • Average Home Value – The average home in Rhode Island is $300,808.
  • Average Rent – The average listed rent for a one-bedroom place in Rhode Island is $1,724.
  • Landlord Tenant Law:
    • Security Deposit Limit – One month’s rent.
    • Security Deposit Return – A landlord only has 20 days after the tenant moves out to return a tenant’s security deposit.
    • Repairs – Rhodes Island tenants can repair and deduct and also have the option to withhold rent until essential repairs are made.
    • Lease Termination – A landlord has to wait until rent is 15 days’ past due and can then send a tenant notice that the lease will be terminated in five days if payment is not made.

Article Sources

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  2. Business Insider. "Here's the Typical Home Price in Every State—And What You Can Get for That Money." Accessed March 5, 2020.

  3. Apartment Guide. "Rental Nation 2020 Rent Report." Accessed March 5, 2020.

  4. WalletHub. "2020's Property Taxes by State." Accessed March 5, 2020.

  5. iProperty Management. "Louisiana Landlord Tenant Rights." March 5, 2020.

  6. Nolo. "Overview of Landlord-Tenant Laws in West Virginia." Accessed March 5, 2020.

  7. Nolo. "State Laws on Termination for Violation of Lease." Accessed March 5, 2020.

  8. Arkansas Attorney General's Office. "Landlord and Tenant Rights." March 5, 2020.

  9. Nolo. "Overview of Landlord-Tenant Laws in Vermont." Accessed March 5, 2020.

  10. Nolo. "Overview of Landlord-Tenant Laws in Nebraska." Accessed March 5, 2020.

  11. Nolo. "Overview of Landlord-Tenant Laws in Rhode Island." Accessed March 5, 2020.