What makes a state "landlord friendly"?

3 Replies

Aloha BP!

I've read this statement a few times but am unsure what it means. So what does a "landlord friendly" state mean? Are there tax advantages or less expenses to pay in those states than others? Would anyone have an example of such a state? Thank you all in advance. ALOHA!

@Justin Young

An easier question is what makes a state unfriendly to landlords

-Difficult eviction process. Imagine it taking 6+ months to evict a tenant that did not pay their rent

-Tenant rights that go so far beyond what is necessary that they put a landlord at extreme financial risk

-Rent control. I am against anything that does not allow the market to determine how much rent will be charged. Every year taxes increase, insurance increases, utilities increase. Yet landlords are forbidden from raising costs to cover these increases

- Special registrations, taxes, certifications, and licenses required that are nothing more than a money collection scheme by the local/state government

-The city/county/municipality charging the landlord for things that the tenants do, for example the city putting a lien on a property you own because the tenant did not pay the water bill

-Local requirements that force a landlord to take tenants that they do not want in their property. 

I can go on and on with this stuff. These cities are mostly in the more liberal parts of the country with higher real estate prices. My belief has always been that part of the cause for such extreme rent costs in these areas is because landlords have to deal with so much BS in order to still make a profit. They are forced to charge more.

I appreciate you chiming in @Anthony Gayden . I'll keep those in mind when looking into investing in a certain market.

Landlord friendly States enforce contracts such as leases fairly and the courts allow quick access with quick resolution (i.e. eviction) if necessary. Since the court process is quick the landlord incurs fewer expenses in prosecuting cases and tenants know they will have little recourse if they do not pay rent promptly. I do not invest there but I understand Texas is a landlord friendly State.

My home State of Michigan is not landlord friendly. In Michigan, court cases can be time consuming and expensive. Many local judges act as if they are advocates for tenants rather than arbiters of law. Many local communities have rental inspection ordinances that are enforced arbitrarily and resolved slowly. They increase the time of vacancies and add considerable expense.

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