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  • Writer's pictureKerwin Donis

What Does Landlord Friendly Mean?

The state you invest in has a major influence on how successful you are. This is due to the fact that property owners are treated very differently in some states compared to others.

What does “landlord-friendly" mean? In the real estate industry, this is a state that has policies that are in favor of the person who owns the property. In “resident-friendly” states, the resident is favored over the landlord. Now, it’s important to note that just because a state is landlord-friendly, it doesn’t mean residents live in bad conditions or are being mistreated. It simply means that the state government allows the property owner to make decisions as it relates to how they operate their properties, and the market is suitable for investment.

Below, we’re diving into the factors of what makes a state ideal for investors, and ranking the top 8 most landlord-friendly states of 2023.


What Do You Mean Landlord-Friendly?


A state is considered landlord-friendly if they meet most of this criteria. It isn’t just limited to government policies.

Economic Health: A state with a strong economy is essential for real estate investors. Landlords and owners rely on a strong business ecosystem, healthy unemployment rate, strong population growth, and high gross domestic product to provide their properties with a consistent flow of residents. Without the residents, they don’t make any cash flow from their property!

Real Estate Taxes: Property owners pay taxes on their property in every state, but the rates vary. California property taxes are much higher than they are in North Carolina, for example. These operating expenses eat into the profits made on a given property, so landlords need to account for these costs.

Rent Control: This one’s sort of a hot buzzword. Rent control is defined by Investopedia as “is a government program that places a limit on the amount that a landlord can demand for leasing a home or renewing a lease.” Rent control is often in the news as either a really good thing or a really bad thing. Either way, it has an impact on a property owner’s ability to increase rents at their property, and thus, increase their property’s value (if it’s a commercial property). As a result, their profit potential is capped. This is why investors must understand the local rent control policies before making a property investment.

Eviction Guidelines: If a resident is not paying, or is causing damage to the property, there may come a time when the owner needs to evict them. This process of removing a resident is easier in some states than others. In certain states, the process can require multiple notices, high fees, and expensive lawyers to push the eviction through. In multifamily, “value-add” business plans often involve replacing non-performing residents with residents who will pay, and also renovation units before filling them with new residents in order to justify higher rents. But the process of evicting current residents who aren’t performing can be more time consuming and expensive than investors anticipated.

Security Deposits: When a landlord rents out a unit to a resident, they typically ask that the resident pay a security deposit. This money acts as a sort of insurance in the event that the resident damages or loses property once they move out. Some states have caps on how much a landlord can charge in security deposits.

Landlord-Resident Laws: These policies outline the legal relationship between landlords and their residents. It encompasses a variety of things, including how much notice a resident must have before a landlord enters their unit, or before they end their lease.

Understanding these factors in any state you might invest in is key to mitigating risk and maximizing profitability in real estate. It will also save you money and headaches.

Next up, here are the 8 U.S. States that are the most landlord-friendly.


1. Alabama

  • Median Property Tax Rate: 0.43% (2nd Lowest in U.S.)

  • No rent control

  • Security Deposits: Up to 1 month’s rent (with exceptions)

  • No late fee restrictions

  • Residents have 7 days after missing a payment before the landlord can file to evict

  • Must provide 2 day’s notice before entering a resident’s unit

2. Colorado

  • 2nd strongest state economy in the U.S. and 1st in overall employment

  • Median Property Tax Rate: 0.52%

  • No rent control

  • No security deposit caps or late fee restrictions

  • Residents have 10 days to pay rent once it’s late before owner can file an eviction

  • No notice is required before entering a resident’s unit

3. Georgia

  • 25th state economy in the U.S. and 9th for business environment

  • Median Property Tax Rate: 0.95%

  • No rent control

  • No security deposit or late fee restrictions

  • Evictions can be filed as soon as rental payment is missed

  • No notice is required before entering a resident’s unit

4. Arizona

  • 4th in the U.S. for population growth and GDP growth

  • Median Property Tax Rate: 0.60%

  • No rent control

  • Security deposit capped at 1.5x the monthly rent

  • Evictions can be filed 5 days after rental payment is missed (for $35 fee)

  • 2 days notice is required before entering a resident’s unit

5. Texas

  • 9th state economy in the U.S.

  • Median Property Tax Rate: 1.90%

  • No rent control

  • No security deposit or late fee restrictions

  • Evictions can be filed 10 days after rental payment is missed ($25 fee)

  • No notice is required before entering a resident’s unit

6. Florida

  • Recently ranked the fastest growing state, 8th state economy

  • Median Property Tax Rate: 0.89%

  • No rent control

  • No security deposit or late fee restrictions

  • Evictions can be filed 3 days after rental payment is missed ($180 fee), residents can appeal for up to 30 days after filing

  • 15 day notice required before terminating a lease

  • 12-hour notice is required before entering a resident’s unit for non-emergencies

7. Indiana

  • Colleges: Purdue and Notre Dame

  • Median Property Tax Rate: 0.83%

  • No rent control

  • No security deposit or late fee restrictions

  • Evictions can be filed 10 days after rental payment is missed

  • “Reasonable” notice is required before entering a resident’s unit

8. North Carolina

  • Median Property Tax Rate: 0.80%

  • No rent control

  • Security deposit capped at 2 months rent (except for month-to month leases, which is 1.5x monthly rent)

  • Evictions can be filed 10 days after rental payment is missed

  • 7 days notice required to amend/terminate lease

  • 24 hour notice is required before entering a resident’s unit

Where you invest matters, so make sure to do research and dig into the market before placing your money there.


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