Investing in real estate is a fantastic business to get into. For example, it’s a great option as a passive income stream. However, you can’t just go buy a property anywhere and expect it to be successful. A lot of factors play into the profitability of a rental, such as the location.
A desirable location can be described as one with low property taxes, an easy eviction process, fair landlord-tenant laws, and so on. Therefore, to maximize your profits you want to invest in a landlord-friendly state.
In this article, we’ll discuss the best states for landlords and what makes a state “landlord-friendly.”
As a landlord, you need to do a lot of research into the area you’re looking to buy in. After all, each state has different laws surrounding landlord-tenant relationships. You never know, one state could tend to favor tenants and have strict laws in place when it comes to evictions, repairs, and lease terminations.
So, you’ll want to conduct thorough research to find the best state to invest your hard-earned money in. Make sure you look out for the following while searching for a landlord-friendly state:
Sometimes there are instances where a landlord has to evict a problematic tenant. For example, they may be damaging your property, pay their rent late, have unapproved roommates or pets living with them, etc.
However, this can be rather difficult if you reside in a state with strict lease termination laws. Such as, if you live in Nebraska you have to give your tenant 2 weeks to address the problem and then you have to wait 30 days after that to terminate the lease.
Therefore, the eviction process can be very long and you may even require legal assistance to proceed.
Paying property taxes is inevitable, but the amount does vary from state to state. The amount you pay in property taxes is largely dependent on the state you live in and the number of units you have.
So, purchasing a property in a state with high property taxes like Rhode Island, New York, California, and New Jersey may not work in your favor.
Rent control is when a city or locality restricts how much landlords can increase their rent. For instance, in New York City they have a limit on how much you can charge for rent in an effort to keep current tenants in their homes.
Such rental laws can hurt landlords and their ability to generate enough income to cover the property’s maintenance and expenses.
Based on the criteria mentioned earlier, here’s a list of some of the best states for landlords:
It’s important to invest in a landlord-friendly state so you can reap the maximum benefits. Ensure you do your research and find a location that fits your needs.