The Best States for Landlords in 2022: Make the Most of Your Rental Properties

Buying and managing rental properties can be a lucrative venture, but location plays a crucial role in determining your success. If you're considering investing in rental properties outside of your own backyard, it's essential to know the best states for landlords to ensure a rewarding investment experience.

Location Matters: The Most Landlord-Friendly States in 2022

Being a successful landlord is about more than just owning property. It's about knowing where to invest your money. Each state has its own rules and regulations when it comes to rental properties, and some states have a more favorable environment for landlords than others.

So, what makes a state friendly to landlords? Let's take a closer look.

1. Favorable Eviction Procedures

In landlord-friendly states, eviction procedures are designed to make it easier for property owners to deal with difficult tenants. These states have streamlined processes that allow landlords to remove tenants quickly and efficiently when necessary.

2. Landlord Rights Are Upheld

Certain states can be more tenant-friendly, which can put landlords at a disadvantage, especially when dealing with problematic tenants. Landlord-friendly states prioritize upholding the rights of property owners and provide them with the necessary legal protection.

3. Better Rent Control

Rent control laws are intended to protect tenants from excessive rent increases. However, in some states, these laws can limit landlords' ability to adjust rental prices, even under reasonable circumstances. Landlord-friendly states strike a balance by allowing property owners to make a decent living while still protecting tenants' rights.

4. Hassle-Free Registration and Licensing

Dealing with paperwork and acquiring licenses can be a cumbersome process for landlords. Landlord-friendly states understand this and strive to make registration and licensing requirements as seamless as possible, or even eliminate them altogether.

5. Favorable Tax and Insurance Rates

High tax rates can significantly impact a landlord's profitability. Landlord-friendly states offer lower tax rates, allowing property owners to maximize their investment returns. Additionally, some states also regulate landlord insurance rates, making it more financially viable for landlords.

10 of the Best States for Landlords in 2022

Based on these criteria, here are the top 10 landlord-friendly states for 2022:

1. Alabama: Low property tax rates and flexible eviction procedures make Alabama an attractive choice for landlords.
2. Arizona: With low property tax rates and landlord-friendly laws on leases and evictions, Arizona offers great opportunities for rental property investors.
3. Colorado: Landlords in Colorado benefit from favorable rent laws and eviction regulations, making asset protection easier.
4. Florida: High return rates and no rent control or prohibitions on late fees make Florida a favorite among investors.
5. Georgia: Georgia boasts a low property tax rate and highly flexible eviction rules, allowing landlords to address non-payments swiftly.
6. Illinois: Recognized for its large tenant pool and established security deposit rules, Illinois offers lucrative opportunities for landlords.
7. Indiana: Reasonable rental rates, low tax rates, and a zero-tolerance policy for non-paying renters make Indiana a landlord-friendly state.
8. North Carolina: With low property taxes, a growing economy, and no eviction laws, North Carolina is a popular choice for landlords.
9. Texas: Texas provides affordable markets, increasing rental property demand, and strong landlord rights for property owners.
10. West Virginia: Low property taxes, affordable housing costs, and a healthy inventory make West Virginia an attractive option for landlords.

Buying Out-of-State Properties: The Key Steps

Investing in out-of-state rental properties comes with its own set of challenges. Here are some essential steps to consider:

Step 1: Build a Reliable Team

Buying rental properties across state lines requires collaboration and teamwork. Surround yourself with real estate agents, contractors, property management teams, insurance agents, and other professionals who can assist you throughout the process.

Step 2: Conduct Thorough Research

Before investing in an unfamiliar market, perform extensive research on the location's rental regulations, tax laws, market trends, and more. Utilize technology platforms like Mashvisor to gather accurate data and make confident investment decisions.

Step 3: Hire a Property Management Team

A reliable property management team helps handle tenant concerns, reduce turnover, ensure timely rent payments, and minimize legal issues. Investing in their services may be an extra expense, but it brings numerous benefits in the long run.

Step 4: Consider Familiar Locations

If possible, invest in areas with which you're already familiar. This familiarity can give you an advantage and help ease any anxieties associated with investing in an unknown market.

Step 5: Visit and Inspect the Property

Never purchase a property without personally visiting and inspecting it. Online information and photos may not accurately represent the property's condition, so physical inspections are crucial.

Step 6: Get Pre-approved

Meet with local lenders to understand mortgage types, interest rates, and financial requirements. Getting pre-approved saves time during the closing process and allows you to act swiftly when the right property comes along.

Conclusion

Knowing the best states for landlords can significantly enhance your chances of success in out-of-state rental property investments. While buying properties outside your home state poses risks, investing in landlord-friendly states can make your experience more rewarding. Remember to do your due diligence, build a reliable team, and use technology resources like Mashvisor to guide your investment decisions. Happy investing!