The Most Landlord Friendly States

54 Replies

We own rentals in CA, AZ, and CO.  We bought in CA first for a few reasons: it's where we live (so we can self-manage and work on it ourselves), we anticipated staying in CA for at least a while, and so we could get experience being landlords (my parents were landlords when I was growing up, but you learn so much more when YOU own the property!).

Since buying that rental, we have decided we will be leaving CA by 2020ish, and branched out to buy some rentals in AZ for a few reasons: only a 6 hour drive away, better ROI, lower prices, and landlord-friendly. We're strongly considering moving to CO when we leave CA, and just bought our CO rental late last year (part of the research I did on various states we considered moving to was how landlord-friendly they were).

So, as far as AZ and CO, my research and experience with those states is consistent with the assessment of them being landlord-friendly.  Doubt you'll ever see CA on that list.

Just curious. But can you give us a typical eviction timeline for each of the three states you're in?
CA:
AZ:
CO:

For Illinois, it is very county specific:
Cook - 5 months
Will - 2 months
Kankakee - 6 weeks

My understanding of texas is that you can get someone out in a month or less...... That cuts down on the risk quite a bit if you ask me. And the thing is that tenants all know the law so it makes it much more likely that they're going to pay because there's really no incentive for them not to.   

In cook county, there's a 5 month incentive not to pay. 

InTexas an the eviction process from start to finish is approximately 3 weeks.  Add another 7-10 days if they fail to leave after the eviction and have to be moved out via a Writ of Posession

Originally posted by @Mike H. :

Just curious. But can you give us a typical eviction timeline for each of the three states you're in?
CA:
AZ:
CO:

For Illinois, it is very county specific:
Cook - 5 months
Will - 2 months
Kankakee - 6 weeks

My understanding of texas is that you can get someone out in a month or less...... That cuts down on the risk quite a bit if you ask me. And the thing is that tenants all know the law so it makes it much more likely that they're going to pay because there's really no incentive for them not to.   

In cook county, there's a 5 month incentive not to pay. 

We haven't evicted in CO since we just bought a couple months ago, but I can give you our (limited) experience in CA and AZ:

Orange County CA: 3 months (the tenant at first tried to fight it, so that added some time.  We were using a lawyer, who obviously has no real incentive to hurry the eviction along since they get paid the same regardless)

Maricopa County AZ: 3-4 weeks (we've evicted a couple tenants; our PM handled it and obviously had more incentive to get them out quickly than a random eviction lawyer would)

From what our CO PM told us (and other PMs there said the same), evictions there (El Paso County) take about 4 weeks or so, maybe a little longer if things are backed up.

Another thing to consider is the cost to evict.  In OC CA, it was about $600 (lawyer + court costs), whereas in AZ and CO it's maybe a couple hundred or so.

As you can see, you've shown a good incentive NOT to buy in Illinois. :)  You can also see why we will not be buying any more rentals in CA.

I also know in TX that in our owner finance houses, we can get people out in 60 days. No squatting here. I love owner financing in TX :). No maintenance, easy to foreclose, an investor's dream. 

@Joe Pickett 

With your owner financing, are you literally the bank in that you are having to do a foreclosure? And you can get them out in 60 days?  

In Illinois, banks are having to wait up to 3 years for a foreclosure to go through. Its ridiculous.

@Kimberly T.  

Thats still pretty cheap. The Cook county eviction was 1k for the eviction. The tenant threw in a bankruptcy thing and I had to pay the attorney another 550. Worst part about cook county is that the landlord has to appear (or is very "encouraged" to appear). So not only am I paying an attorney a grand, I'm chewing up an entire half day of my time too. 

Oh, btw, the one eviction I had, I ended up going to court 3 times. PLUS, I got a ticket at the court house that day as well (my sticker had expired).  Just throwing salt in the wound.

In Kankakee, its about $600. In Will about the same.

But yes, I will never buy another property in cook county again. I have no idea why anybody would deal with that nonsense - other than the fact the numbers always seem pretty good. But given the risk, they're NOT as good as you think.

Still, I've only had one eviction so I've done ok there. But its just too big of a risk in my mind and I hate the stress of knowing I may have to deal with it. At some point, I'll be selling these houses and moving the equity into homes in better counties.....

Thanks for the update.....   I actually thought california would have been far more expensive for the eviction and far lengthier a process for an eviction. Maybe the courts aren't as liberal out there as I thought. :-)

Florida is pretty good. An eviction here generally takes 3-4 weeks from the date it's filed until the Sheriff is at the front door to remove the tenant.  If it's for non-payment and the tenant doesn't file an answer AND deposit funds with the court they don't even get a hearing.  Filing fee is $195, you have to pay a private process server to serve the summons and then the Sheriff gets $90 to execute the writ of possession.  On my last one the Sheriff's dept earned their $90, there were 6 adults still in the house and nobody had started packing.   They were eating breakfast and refused to come to the door initially even though they were looking right at him through the blinds.  They asked the Sheriff if he could come back tomorrow.....he instead called for backup and they kept them all off the property while my guys threw their belongings in the alley for them. 

Originally posted by @Mike H. :

@Joe Pickett 

With your owner financing, are you literally the bank in that you are having to do a foreclosure? And you can get them out in 60 days?  

In Illinois, banks are having to wait up to 3 years for a foreclosure to go through. Its ridiculous.

@Kimberly T.  

Thats still pretty cheap. The Cook county eviction was 1k for the eviction. The tenant threw in a bankruptcy thing and I had to pay the attorney another 550. Worst part about cook county is that the landlord has to appear (or is very "encouraged" to appear). So not only am I paying an attorney a grand, I'm chewing up an entire half day of my time too. 

Oh, btw, the one eviction I had, I ended up going to court 3 times. PLUS, I got a ticket at the court house that day as well (my sticker had expired).  Just throwing salt in the wound.

In Kankakee, its about $600. In Will about the same.

But yes, I will never buy another property in cook county again. I have no idea why anybody would deal with that nonsense - other than the fact the numbers always seem pretty good. But given the risk, they're NOT as good as you think.

Still, I've only had one eviction so I've done ok there. But its just too big of a risk in my mind and I hate the stress of knowing I may have to deal with it. At some point, I'll be selling these houses and moving the equity into homes in better counties.....

Thanks for the update.....   I actually thought california would have been far more expensive for the eviction and far lengthier a process for an eviction. Maybe the courts aren't as liberal out there as I thought. :-)

Mike, yes you are the bank so you foreclose if they do not pay after 30 days. 60-90 day process, resell the deal for 5k down again. We don't worry about foreclosures; they work out well as an investor (in TX). Other states, no, as you noted.

Originally posted by @Mike H.:

Thanks for the update.....   I actually thought california would have been far more expensive for the eviction and far lengthier a process for an eviction. Maybe the courts aren't as liberal out there as I thought. :-)

Well, it is highly dependent on the county your rental is in, and the tenant.  I know LA county is more expensive and takes longer (more liberal than OC).  I've also read not long ago that due to budget cuts, things are even more expensive and longer now than when we evicted over 2 years ago.  Yikes.

Evictions in Colorado are somewhat determined by the County that the property is located in. It also depends on the tenant. If the tenant fights and shows up in court then it takes longer. In Denver, if they don't pay and don't show up in court and don't move out I can have them on the street in about 3 weeks. The process goes like this notice on the 2nd, file on the 5th, court on the 13th, and sheriff there on the 23rd along with my crew to move their stuff to the curb. In reality, it takes a few days longer because of weekends or holidays or something. If you stay on top of things, you will likely have them out in a month unless they try and fight it. If they fight it, then all bets are off but unless it's someone really sharp or you have really messed up it should not stretch beyond 2 months.

Pima county, AZ, I can have a tenant out in approx 3 weeks, to include the constable showing up at the front door. The eviction lawyer that my company used costs only $275 to do the deal, and then another $150 if it requires getting the constable involved to forcibly remove.

@Yishi Garrard  

  Its not bad in Oregon you can get folks out in 30 to 40 days not problem as long as you follow the terms of your rental contract to the letter.

@Account Closed  

  on your owner finance deals are you actually transferring title and taking back a note and DT.. and if you have a default you have to do a foreclosure which I know is quick in Texas say 60 days.. but if the people won't leave after that you then have to do an eviction .. If you are transferring title to the folks how much =does the foreclosure cost.. has to be a couple grand I would think.. Also you are subject to them filing a bankruptcy and delaying your foreclosure for many months or years.. I know in many parts of the country a good attorney can keep a homeowner in the home for years for maybe 1k a in attorneys fees.

It would be good for you to expound on this process. as you don't want to give folks the impression they can sell a house transfer title and in the case of the folks not making a payment evict them like a tenant.. there is a new federal law FYI that calls for mandatory 90 notices before you can even start the foreclosure process are you aware of those ?

Originally posted by @Account Closed :

I also know in TX that in our owner finance houses, we can get people out in 60 days. No squatting here. I love owner financing in TX :). No maintenance, easy to foreclose, an investor's dream. 

 Joe, what kind of minimum down or LTVs do you require?  Are you selling the paper or actually collecting and servicing the loan?  

David Begley, Real Estate Agent in GA (#357208)

We get $5000 down from the owner finance homestead buyer. Our investors buy cash or with the cheapest money they can get, preferably 8% or less. 

I have never seen such a thing happen here jay and I am talking many hundreds of deals. Every foreclosure we ever did was done is 60-90 days. These foreclosures cost 500-1000 dollars. 

The investor services the loan. I service my own loans, my partner has said he does use a loan servicer as he owns several dozen of these free and clear. He also recommends that to his bigger investors. 

I would like to get my partner on BP; he would fit in well here, but he's not a RE forum guy. I did mention it to him.

My partner has a team of lawyers advising him on Dodd Frank and all regs. I'll ask him on your questions, it always helps me learn more.

Looking for landlord friendly?  Small Claims judge in Whitley County Indiana owns rentals...  Tough to find a more landlord friendly judge than a judge who is also a landlord.  

Jay, we are in the service business in what we do. That is, we are helping people get into houses who paid rent all their lives. We want them to refi when their credit improves, we want them to own a home, fix up the homes and make the neighborhoods nicer. We qualify people per the safe act very carefully. All our buyers have a job, down payment and verified income. They pay us or our investor, and if they don't, we do start the foreclosure process. 

We aren't interested in doing wrong to people, yes I would not want anyone to ever try to do anything underhanded or shady. The problems in RE happen when people get greedy and forget that we really are in business to help others, not just make a fast buck :)

@Account Closed  

I suspect it somewhere in the middle.. there are new federal laws regarding foreclosures. you can't just kick people out in 60 days anymore period end of story.. And foreclosure cost way more than 500.. I know I was and am a HML and have done well over 200 foreclosures in 12 states including yours... So in theory I agree with your buy and then seller finance ( you then have the new dodd frank qualified mortgage to think about) I think this scheme your touting is very good pre dodd frank but now a days. to think you just sell for 5k down and take it back in 30 or 60 days is wishful thinking at best... Of course you could be dealing with Hispanic's that won't fight you and just leave with a little bit of pressure. But its not the way the real world works these days.. so you want to be careful touting this as this is a national forum.. And I can tell you in other states your model would cause a great deal of pain for the seller if they did not follow the new Dodd Frank and foreclosure rules then eviction rules to the letter.

It works very well in Texas, that I can tell you, not in every state. I would not say do it in every state. But I would tell people to investigate doing it in business friendly states such as this one. Of course, if you don't follow Dodd Frank, you'll have problems. It causes us no problems at all. We follow the law to the letter. We foreclose in 60 days here, my partner just did one. I'm just telling you what i know he does. I'd love to get him on here, he's more knowledgeable than I on that end of it. 

I am not sure I like Texas, I have a 250K single family in a small town and local taxes are 7K a year.  I am thinking it's time to get out of Texas (or at least Del Rio TX).

My partner has said multiple times in the last week to me that he pays 500-1000 to foreclose these houses. I'm not arguing with you, I'm just telling you, this guy has done tons of these deals. 

property taxes here are high, that is true!

@Account Closed  

  agreed.. I just think you need to present what you do in a little clearer light than what you have been talking about.. owner finance has a great need in the community.. but your investors need to know the facts. and the facts are owner finance deals go south and they go south pretty frequently so you need to know how to deal with them.

And the owners of the houses are not tenants they are owners with owners rights. and the owners have the right to bankruptcy protection.. Safe act etc etc.  I have seen others do this scheme and really get some investors in to some tight spots.. IE the investor did not know the rules but they are the Beneficiaries of the mortgages therefore subject to the rules and penalties etc if something is not exactly perfect.

Like your partner I have done many probably over 100 owner finance deals in my day.. I just sold one last week.. So I hear you with the benefit.. Just think its best to be fully transparent than to make these claims that you just sell it get 5k down.. if they don't pay it only takes 60 days or less to get the house back and only cost 500 dollars to do so.. That is just not correct in todays real world.