You may dream about owning investment properties and becoming a landlord, but the state you live in may not be the best place to own property. This is due to each state having different tenant-landlord laws, taxes and insurance rates.
Luckily for you, Foremost® Insurance has you covered. After reading this article, we hope you’ll have a better sense of what topics to research before you make your decision.
So, what makes a state landlord friendly?
- Low crime rates.
As a landlord, you can decrease your chances of facing unnecessary problems if you invest in an area with low crime rates and take steps to decrease the risk of burglary on any of your investment properties. If you do experience a burglary, the resulting liability and responsibilities can fall on you. Do your research and know what to expect before you invest in an area.
- Low property taxes.
Many landlords overlook the cost of property taxes and don’t factor in this expense. Property taxes are controlled by local governments, and you’ll pay significantly less in some states than others. You can research what property’s owner pays in taxes by accessing the county’s tax assessor or municipality website.
- Rent control laws.
Rent control laws regulate the amount landlords can increase rent for tenants each year. While this law is meant to protect tenants, there are many reasons a landlord may want to raise the price of rent, such as inflation or increases in taxes. Always be sure to research these laws before purchasing a property to avoid any hardships in the long run.
- Fast eviction process.
Ideally, you’ll never have to evict a tenant. If you do end up in this situation, however, you’ll likely want to get through it as quickly as possible. Some states have a more direct eviction process than others. There are also states that have varying requirements which depend on the reason for the eviction, such as failure to pay rent, noise complaints or any signs of illegal activity.
- Insurance rates.
Some states and municipalities have lower insurance prices on average. Before purchasing a home, be sure to get an insurance quote to make sure your budget can cover the expense.
- Landlord and tenant laws.
Every state has laws that apply to both landlords and tenants, and these laws vary. Be sure to perform due diligence on a state’s regulations before purchasing an investment home.
Now that you know what to look for to see if a state is landlord-friendly, you might want to check out these states, which are often considered some of the most landlord-friendly: