Best States for Landlords in 2019

And the 3 Least Landlord Friendly...

Family in front of a house
•••

Ariel Skelley/DigitalVision/Getty Images

A property investor can purchase property anywhere in the United States. Each state will have its own set of general laws, as well as specific landlord-tenant laws. However, some states are more landlord friendly than others. Learn the five states that are the most favorable for landlords in 2019, three that are the least landlord friendly and the factors that went into the ranking.

Factors for Ranking the Best and Worst States for Landlords

The two main aspects of being a landlord are owning property and managing tenants. Therefore, laws that affected property were examined, as well as the laws that affected how a landlord manages their tenants.

Property Taxes

Regardless of where a landlord buys a rental property, he or she will have to pay yearly taxes on it. Even if the landlord owns the property outright with no mortgage, he or she must still pay property taxes based on the property’s value. Therefore, if you buy in a state with a high tax rate, you will be putting more money toward property taxes than you would for the same property in a state with a lower property tax rate. Property tax rates were found at WalletHub.

Property Values

The average property values in the state were also considered. While this value will fluctuate wildly statewide, it does give a general idea of affordability. The data was based on Zillow Home Values as of December 2018.

Average Rents

As a landlord, one of the most important things to look at is how much you will be able to collect in monthly rent. Average rents for the state were looked at, which again will vary widely across the state depending on location, the condition of the property, amenities, and size of the rental. The data used was the Zillow average rent list price for a one bedroom apartment as of December 2018.

Landlord-Tenant Laws

The final factor that was considered when evaluating the best states for landlords were the specific landlord-tenant laws in the 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.

5 Best States for Landlords in 2019

Low taxes, reasonable rents, and favorable landlord-tenant laws.

1. Louisiana

  • Property Taxes – Louisiana has an effective property tax rate of 0.51%, which is the 3rd lowest in the nation. On a $150,000 property, you would pay $765 a year in property taxes.
  • Average Home Price – The average home in Louisiana is valued at $147,500. You would be paying $752.25 in yearly property taxes.
  • Average Rent – The average listed rent for a one bedroom property in Louisiana is $1,200.
  • 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.
    • Notice for Nonpayment or Lease Violation – 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 8th lowest property taxes in the country. On a $150,000 property, you would be paying yearly property taxes of $885.
    • Average Home Price – An average home in West Virginia is valued at $97,800, which would amount to $577.02 in property taxes.
    • Average Rent – The average listed rent for a one bedroom in West Virginia is $950.
    • Landlord Tenant Law:
      • Security Deposit LimitNo limit
      • Security Deposit Return – The landlord has 60 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.
      • Termination for Nonpayment and Lease Violations – A lease could be terminated within five to ten days of landlord filing notice with the court.

      3. Arkansas

      • Property Taxes – Arkansas has an effective property tax rate of 0.63%, which is the 10th lowest in the country. On a $150,000 property, you would pay $945 in property taxes.
      • Average Home Price – The average home in Arkansas is valued at $125,200, which would amount to $788.76 in property taxes.
      • Average Rent – The average listed rent for a one bedroom in Arkansas is $1,000.
      • Landlord Tenant Law:
        • 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.
        • Abandoned Property – Landlords are allowed to dispose of any property left behind by a tenant.

        4. Wyoming

        • Property Taxes – Wyoming has an effective property tax rate of 0.61%, which is the 9th lowest in the country. On a $150,000 property, you would be paying $915 in yearly property taxes.
        • State Income Tax – Wyoming has no state income tax.
        • Average Home Price – The average price of a home in Wyoming is $225,400, which would amount to $1374.94 in yearly property taxes.
        • Average Rent – The average rent for a one bedroom property in Wyoming is $1,150.
        • Landlord Tenant Law:
          • Security Deposit Limit – No Limit
          • Security Deposit Return – Landlord has 30 days to return a tenant’s security deposit.
          • Repairs – Tenants cannot repair and deduct, but they can withhold rent if essential repairs have not been made.
          • Landlord Entry – Landlord can enter a tenant’s apartment without notice if a tenant is three days’ past due on their rent.
          • Lease Termination – Landlord can terminate a lease three days after nonpayment of rent or other lease violations.

          5. Colorado

          • Property Taxes – Colorado has an effective property tax rate of 0.57%, which is the 6th lowest in the country. On a $150,000 property, you would be paying $855 in yearly property taxes.
          • Average Home Price – The average home price in Colorado is $374,100, which would amount to $2,132.37 in property taxes.
          • Average Rent – The average listed rent for a one bedroom in Colorado is $1,895.
          • Landlord Tenant Law:
            • Security Deposit Limit – No Limit
            • Security Deposit Return – Landlords generally have up to 30 days to return a tenant’s security, unless the lease states the landlord has up to 60 days to return it.
            • Rent Increase – Landlords only have to provide 21 days’ notice to increase a month to month tenant’s rent.
            • Repairs – Tenants cannot repair and deduct, but they may be able to withhold rent for repairs.
            • Lease Termination – A landlord is able to terminate a lease with three days’ notice for nonpayment or other lease violations.

            3 Worst States for Landlords in 2019

            High property taxes, high home prices, and strict landlord-tenant laws.

            1. Vermont

            • Property Taxes – Vermont has the 8th highest property taxes in the nation, with an effective tax rate of 1.78%. On a $150,000 property, you should expect to pay $2,670 in yearly property taxes.
            • Average Home Price – The average price for a home in Vermont was $202,700. You would be paying approximately $3,608.06 in property taxes for an average home in Vermont.
            • Average Rent – The average listed rent for a one bedroom in Vermont was $1700.
            • Landlord Tenant Law:
              • 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 60 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.
              • Landlord Entry – Landlords must give at least 48 hours’ notice before entering a tenant’s apartment.
              • Abandoned Property – Tenants have 60 days after receiving a landlord’s notice to recover abandoned property.

              2. Nebraska

              • Property Taxes – Nebraska has an effective property tax rate of 1.83%, which is the 7th highest in the nation. On a $150,000 property, you should expect to pay $2,745 in yearly property taxes.
              • Average Home Price – The average price for a home in Vermont is $162,900. At a 1.83% tax rate, you would be paying $2981.07 in property taxes.
              • Average Rent – The average listed rent for a one-bedroom rental in Nebraska is $1200.
              • 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 Violations – 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 1.65%, making it the state with 10th highest property taxes. On a $150,000, you should expect to pay $2,475 in yearly property taxes.
                • Average Home Value – The average home in Rhode Island is $279,800, which would have you paying $4616.70 in yearly property taxes.
                • Average Rent – The average listed rent for a one bedroom in Rhode Island is $1,412.
                • 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.
                  • Landlord Entry – Landlords must give 48 hours’ notice before entering the apartment.
                  • Termination Notice – 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.