Best and Worst States for Landlords in 2020

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Investors can purchase property anywhere in the United States, but some states are more landlord-friendly than others. A good investment in rental property involves multiple factors such as costs, taxes, and state laws on leases and the handling of tenant-landlord disputes.

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 landlords buy rental properties, they'll have to pay yearly taxes on them. Landlords pay property taxes bases on a property's value even if they own a property outright with no mortgage. 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.

We've used median tax rates for states, but it's important to be familiar with local tax rates and all tax laws in each state. Rates will vary from municipality to municipality, and some states may charge slightly higher rates for rental or other nonhomestead properties.

Property Values

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

Median Rents

Another important thing to consider is how much you'll be able to collect in monthly rent. We looked at the median rent for each state for this report. However, keep in mind that rents will vary widely across each state depending on location, the condition of the property, amenities, and the 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 a median property tax rate of 0.18% and is the lowest in the nation. A property with a taxable value of $100,000 would be paying yearly property taxes of $180.
  • Median Home Price: The median home value in Louisiana is $147,600.
  • Median Rent: The median rent for a property in Louisiana is $1,110.
  • 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: Tenants cannot withhold rent but can deduct costs from the rent for making essential repairs.
  • Lease Termination: A landlord has to give only five days’ notice to terminate a lease for nonpayment of rent or other violations.

2. West Virginia

  • Property Taxes: West Virginia has a median property tax rate of 0.49%, making it the state with the sixth-lowest property taxes in the country. A property with a taxable value of $100,000 would be paying yearly property taxes of $490.
  • Median Home Price: The median home value in West Virginia is $99,000, the lowest in the nation.
  • Median Rent: The median rent for a property in West Virginia is $866, also the lowest in the nation.
  • 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 a median property tax rate of 0.52%, which is the eighth-lowest in the country. A property with a taxable value of $100,000 would be paying yearly property taxes of $520.
  • Median Home Price: The median home value in Arkansas is $129,500.
  • Median Rent: The median rent for a property in Arkansas is $875.
  • 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 terminate a lease for any reason with notice equivalent to one rental period.

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 ninth-highest median property tax rate in the nation at 1.59%. A property with a taxable value of $100,000 would be paying yearly property taxes of $1,590.
  • Median Home Price: The median home value in Vermont is $210,600.
  • Median Rent: The median rent for a property in Vermont is $1,668.
  • Security Deposit Limit: No limit.
  • Security Deposit Return: Landlords have only 14 days after the tenant moves out to return the deposit.
  • Rent Increase: Landlords must give at least 30 days’ notice to increase rent.
  • Repairs: Vermont tenants are allowed to withhold rent until essential repairs are made. They also have the option to make repairs and deduct the cost from the rent.
  • Lease Termination: A landlord can file for eviction 14 days after a tenant doesn't pay rent.

2. Nebraska

  • Property Taxes: Nebraska has a median property tax rate of 1.76%, ranking fourth in the nation. A property with a taxable value of $100,000 would be paying yearly property taxes of $1,760.
  • Median Home Price: The median home value in Nebraska is $169,900.
  • Median Rent: The median rent for a property in Nebraska is $1,062.
  • Security Deposit Limit: One month’s rent.
  • Security Deposit Return: Nebraska landlords have 14 days after a tenant moves out to return a security deposit.
  • Repairs: Tenants in Nebraska are allowed to withhold rent until essential repairs have been completed.
  • Lease Termination: Landlords can notify tenants that lease violations must be fixed within 14 days of notice, but they cannot terminate the lease until 30 days after notice.

3. Rhode Island

  • Property Taxes: Rhode Island has a median tax rate of 1.35%, ranking it 12th in the nation. A property with a taxable value of $100,000 would be paying yearly property taxes of $1,350.
  • Median Home Value: The median home value in Rhode Island is $284,200.
  • Median Rent: The average rent for a property in Rhode Island is $1,443.
  • 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: Tenants have 20 days to become compliant with a lease violation before the lease can be terminated.

Article Sources

  1. USA.gov. "State and Local Taxes." Accessed Nov. 9, 2020.

  2. Experian. "California Leads Nation in Rent Costs." Accessed Nov. 9, 2020.

  3. Tax-Rates.org. "Property Taxes by State." Accessed Nov. 9, 2020.

  4. Experian. "Median Home Values by State." Accessed Nov. 9, 2020.

  5. iProperty Management. "Louisiana Landlord Tenant Rights." Accessed Nov. 9, 2020.

  6. Nolo. "Overview of Landlord-Tenant Laws in West Virginia." Accessed Nov. 9, 2020.

  7. Nolo. "State Laws on Termination for Violation of Lease." Accessed Nov. 9, 2020.

  8. Arkansas Attorney General's Office. "Landlord and Tenant Rights." Accessed Nov. 9, 2020.

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

  10. Nolo. "Overview of Landlord-Tenant Laws in Nebraska." Accessed Nov. 9, 2020.

  11. Nolo. "Overview of Landlord-Tenant Laws in Rhode Island." Accessed Nov. 9, 2020.